The Muslim Public Affairs Centre (MPAC) Nigeria has called on the National Insurance Commission (NAICOM) to reverse its recent directive banning coinsurance arrangements between Takaful operators and conventional insurance companies.
In a statement released on Tuesday, MPAC’s Executive Chairman, Disu Kamor, said the August 19 directive could seriously undermine the development of ethical insurance and hinder efforts to boost financial inclusion in Nigeria.
The NAICOM policy, which prohibits any form of collaboration between Islamic (Takaful) and conventional insurers, has sparked criticism from stakeholders who warn it could further isolate the growing but still fragile Takaful industry.
“Instead of enabling partnerships that could promote market growth, NAICOM’s ban threatens to isolate Takaful and entrench its peripheral status,” Kamor stated.
MPAC highlighted international examples where similar partnerships have been instrumental in developing inclusive insurance ecosystems. Countries such as Malaysia, Saudi Arabia, the UAE, Indonesia, and Pakistan were cited as successful models where collaboration between Islamic and conventional insurers has driven innovation, expanded access, and boosted market penetration.
“In Malaysia, the Takaful industry thrived in its early stages by working with conventional insurers. That model of phased integration is something Nigeria can learn from,” Kamor said.
The organization warned that the ban’s biggest impact would be on consumersespecially Muslims and ethically conscious individuals—who may prefer Takaful insurance products but rely on the broader infrastructure and networks of conventional insurance providers for access.
With Nigeria’s insurance penetration still below 2% of GDP, MPAC argued that restricting coinsurance arrangements could limit access to insurance for underserved communities and slow the industry’s growth.
The group outlined several potential benefits of allowing Takaful-conventional coinsurance partnerships, which include, expanded access to insurance products, increased consumer choice and satisfaction, enhanced product innovation and competition, and resource-sharing and knowledge transfer across the industry.
While acknowledging NAICOM’s responsibility to maintain the integrity of the Takaful system, MPAC called for a shift from prohibition to regulation. The organization urged the development of a clear and transparent regulatory framework that upholds Shariah compliance, ensures strong risk management, and protects consumers.
MPAC also referenced the regulatory approach of the Central Bank of Nigeria (CBN), which permits collaboration between Islamic and conventional banks. This model, the group noted, has successfully supported the growth of Islamic banking without compromising regulatory standards.
To foster a more inclusive insurance sector, MPAC recommended shariah-compliant guidelines for coinsurance arrangements,robust risk management and oversight systems,full transparency and disclosure in all agreements, and continuous monitoring and auditing to ensure compliance
The group concluded by appealing to NAICOM to revisit the August 19 policy, warning that its continuation could stall progress toward broader financial inclusion and the expansion of Nigeria’s insurance industry.
“This directive has far-reaching implications not just for Takaful but for the national goal of building a more inclusive and resilient financial system,” Kamor said.