96
2. Need for Re-Takaful Companies to cater to the need of the Takaful industry: There
is only one reinsurance company in the country. Therefore, there is a need for Re-
Takaful companies in the country due to the Shari'ah issues raised about the
reinsurance company and the 5% tax if any Takaful company opt for Re-Takaful outside
the country.
Recommendations and Transferring Knowledge
There have been notable efforts by the regulators of the insurance industry in Saudi Arabia
starting from 2004 by issuing the Cooperative Insurance Companies Control Law and up to date.
However, there is a need to address the challenges faced by the industry. In this regard, we
recommend the following:
1. Enhance the existing regulations to address the Shari'ah concerns relating to the
cooperative insurance model and make a clear distinction between the policyholders
and the shareholders’ funds.
2. The need for Shari'ah governance framework for the Islamic financial services industry
as a whole and Takaful industry specifically.
3. The need for strong Re-Takaful companies.
4. Increase awareness among the policyholders to differentiate between the Takaful and
conventional insurance.
5. Enhance the proficiency of the Shari'ah committees in the Takaful companies through
training programmes.
6. The need for the training and academic programmes on Takaful in academic
institutions.