Application of Takaful Operational Guidelines 2013 and Insurance Act 2003 in Nigeria: Matters Arising and the Way Forward

The Nigerian insurance industry has a history of lack of penetration and patronage in some parts of the country. The persistent insurance gap has prospered in financially excluding and underserving the majority of the populace. In 2013, National Insurance Commission (NAICOM), the statutory body responsible for the regulation and supervision of insurance business in Nigeria introduced the Takaful (Islamic Insurance) Operational Guidelines which is adjudged as an avenue for increasing insurance penetration being a Shari‘ah compliant product thereby bridging the endemic insurance gap. However, some provisions of the Takaful Operational Guidelines are in conflicts with certain provisions of the Insurance Act which left a vacuum in simultaneous application of the laws, a situation that affects the operation of Takaful sector in the country. This paper analyses some grey areas of conflicts in the Takaful Operational Guidelines and the Insurance Act 2004 with a view to resolving and harmonizing the legal frameworks. The study adopted a qualitative methodology of legal research which involved analysis of existing literature and interviews. The study concludes that the Operational Guidelines 2013 issued by NAICOM for smooth operation of Takaful business and the Insurance Act 2003 are inadequate as they left certain regulatory gaps that need to be filled in. Thus, the study recommends, amongst other things, that a comprehensive and robust Takaful Act to be enacted; and a review of the operational guidelines to safeguard the nascent Takaful industry with a clear delineation of authority between the Takaful guidelines and the Insurance Act.