Regulatory Alerts2026-07-26
Added · Updated
Guidelines on Retakaful Arrangements 2026
Takaful and retakaful operators in Somalia must establish board-approved retakaful strategies, conduct ongoing due diligence on counterparties, and maintain effective internal controls and risk management frameworks. Operators are required to select retakaful providers with a minimum financial rating of B and document specific administrative details for each arrangement, including maximum liabilities and commission structures. Fronting arrangements are prohibited for specific business classes unless explicitly approved in writing by the Bank, and placing facultative cover outside Somalia requires prior regulatory permission. Compliance with Shariah principles is mandatory, including the use of conventional reinsurance only under exceptional necessity (dharura) as determined by the Shariah board.