UAE Introduces Distinct Regulations for Takaful Insurance

The UAE Insurance Authority Board recently promulgated Resolution No. 4 of 2010 concerning Takaful Insurance (the Takaful Regulations) which, for the first time in the UAE, provides regulations for Islamic Insurers (Takaful operators) distinct from the regulations governing conventional insurers.

The Takaful Regulations are broad ranging; providing details both as to structure and powers of the UAE Insurance Authority, and the day-to-day operations of Takaful operators. The Takaful Regulations provide guidance as to the structure of the Takaful policies to be issued and expressly prohibit conventional insurers from offering Takaful products via an Islamic window. There are also significant corporate governance requirements imposed upon Takaful operators in relation to ensuring the Shari'a compliance of their operations.