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Sharia compliant insurance is here

NAIROBI, Kenya Jan 25 – A fully fledged Shariah compliant insurance company has been launched into the local market.

The company Takaful Insurance of Africa (TIA) has said it will introduce Shariah compliant insurance products into the market and in the region.

TIA Chief Executive Officer Hassan Bashir said following the issuance of a licence by the Insurance Regulatory Authority this month, the company will now be able to offer schemes where policy holders contribute to their own account where they may be entitled to dividends.

"The risk fund fully belongs to the members. Therefore TIA is committed to transparency with integrity and accountability. Creating long-term partnerships with those groups of people is one of our aims. If the pool is owned by shareholders, generally, shareholders collect dividends. If the pool is owned by the insured, the pool remains with the insurer, and at that point when the pool is healthy enough to give back. It doesn\’t give back to the shareholders. It gives back to the members," Mr Bashir said.

He said that besides having international strategic investors, the company\’s shareholders are Kenyans. He said that in line with the IRA the company has started off with a Sh600 million capital base.

"The regulator was pushing the industry to go beyond the Sh300 millions limit for the period ending 31st of December 2010. So we have started at a good point with a Sh600 million capital base. The capital is coming from Kenyans. The company is fully owned by Kenyans," he added.

In last year\’s Budget Speech Finance Minister, Uhuru Kenyatta said an amendment will be introduced to the Banking Act to accommodate unique concepts of Shariah compliant products

Takaful illustrates the act of a group of people who mutually guarantee each other against certain loss or damages that may be inflicted on anyone in the group. Takaful is backed by Kenya Re.

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