The prospests and challenges of Islamic insurance (Takaful) in Nigeria : a comparative legal analysis with the Malaysia system of Takaful

Abstract

The Nigerian insurance industries have introduced takaful (Islamic insurance) into its insurance market. This initiative is based on the apparent prospects for takaful operation in the country. The indicators of the prospects include the large Muslims population in the country who will prefer takaful to conventional insurance policies. Other indicators are the application of Islamic personal and criminal laws which are the branches of Islamic law in some of states of the country. However, the new takaful operation is being confronted with some problems. The main problem that is faced by the Nigerian takaful industry is the lack of a unified and reliable legal framework. Other problems are the lack of technical-know-how of the takaful operation and religious intolerance. This study addresses the problems that confront the Nigerian takaful operations. The study is a library based research. It relies on the available literatures on the subject of takaful, which are in both printed and electronic forms. The researcher at the course of the study discovered that, the Malaysian takaful industry is the most developed in the world. The industry developed through the country’s takaful legal framework. The framework is embodied in the takaful Act, 1984. The law is viable as it helps the country to develop its takaful operations rapidly. The researcher therefore, suggests the adoption of the Malaysian takaful framework as a model for the development of the Nigeria takaful framework. The researcher concluded that if Nigeria should adopt the Malaysian takaful framework, it will help to overcome the problems faced by the Nigerian takaful operations and it will accelerate the development of the industry, in the country, to the world standard.