GCC Takaful Regulation Lags Market Growth, Creating Uneven Playing Field

LONDON, January 2013 – While the Takaful industry has been developing rapidly in the countries of the Gulf Cooperation Council (GCC), the development of Takaful regulation varies significantly country by country. As a result, the levels of policyholder protection differ from one state to another, which has created opportunities for Takaful operators to pursue regulatory arbitrage, according to a new report from A.M. Best Co. This special report maps the provisions for Takaful regulation in the GCC and identifies the implications for policyholder protection and its impact on A.M. Best ratings.

There is significant debate as to the right level of regulation. Market participants in some of the more demanding regimes consider the regulations to be stifling their companies. A.M. Best believes the solution is not less regulation but more consistent application of regulation throughout the region, which has the potential to provide sufficient policyholder protection, and thus safeguard the long-term viability of the Takaful industry.

To access a complimentary copy of this report, please click the following link:
A.M. Best Special Report: Takaful Life and Non-Life

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