The Insurance Regulatory of Uganda (IRA) has released the long-awaited Takaful and Retakaful regulations, marking a significant milestone in the country’s efforts to broaden insurance access by offering an alternative to conventional insurance.
During the official dissemination of the newly gazetted regulations, the IRA Chief Executive Officer, Alhaj Dr. Kaddunabbi Ibrahim Lubega, said the framework establishes the basis for operating Takaful insurance under principles of mutual assistance, transparency, and Shariah compliance.
“For too long, many Ugandans have been excluded from insurance due to ethical or religious reservations about conventional schemes. These new regulations introduce a credible, regulated alternative rooted in mutual solidarity, ethical finance, and community support,” Dr. Kaddunabbi said, adding that, this development has the potential to widen and deepen insurance uptake.
The regulations set comprehensive standards for licensing, governance, capital adequacy, market conduct, and consumer protection. According to Alhaj Dr. Kaddunabbi, they are designed to balance strong safeguards with a framework flexible enough to encourage innovation.
“The new regime guarantees policyholder protection, financial stability, and greater market confidence,” he added.
Dr. Abdul Hafiz Walusimbi, a Shariah Consultant noted that the regulations open doors to new market opportunities, particularly for communities that have previously shunned conventional insurance. “Takaful introduces true financial inclusion for individuals who either lacked or reluctantly engaged with traditional systems,” he said, adding that, “Its introduction is likely to drive sector growth and improve insurance penetration, currently below 1 percent”.
Open to everyone
Addressing misconceptions about the product, IRA Director Legal, Ms. Francesca Kakooza, emphasized that Takaful is not exclusive to Muslims.
“Takaful is for everyone. No one will be denied entry into a Takaful pool based on religion,” she said.
Regardless of how unique this insurance is, Ms. Kakooza said consumer protection is still critical for IRA and the entire financial services sector.,
“We are giving a safety net to the consumer but we also need to ensure that their rights are protected during the process. Let us always given them the right information, whether it’s takaful or conventional insurance,” she said.
With the regulations now in force, the Authority plans to intensify industry training, strengthen supervision of Takaful operations, and roll out public awareness campaigns to accelerate adoption.
Takaful is still in its early stages across most African markets. While there is growth – sometimes double-digit growth year-on-year in specific markets, the total volume remains modest. However, growing regulatory interest and rising demand among Muslim populations suggest significant potential for expansion.
