Kenya freezes new Takaful licenses

Kenya has blocked the licensing of new Takaful companies until a suitable law to manage them is completed. This gives Kenya’s existing Takaful firms the opportunity to grow unrestrained by new competition. But the regulator’s strategy risks losing its position as the leading IF hub in East Africa to neighbors Tanzania and Uganda, who have put no such restrictions on new local and foreign firms entering their markets.
At present Kenya’s insurance law does not admit Takaful as a standalone product, although the law empowers the IRA to launch ad hoc regulations authorizing individual operators on a case-by-case basis to sell Takaful products. The insurance law also does not permit companies to invest in offshore assets, locking out Kenyan Takaful entities from established capital markets in the Middle East and Asia.