Inside the 2025 Ugandan Takaful and Retakaful Regulations: The public Takeaways

🧑‍🧑‍🧒‍🧒Takaful is defined as a "shari'ah compliant system of mutual support that provides financial security to a group of members in case of defined emergencies and hazards, via contributions that are considered as donations". (AAOFI)

🇺🇬The 20-page 2025 Takaful and Retakaful Regulations issued by the Insurance Regulatory Authority of Uganda (IRA) mark a major advancement in Takaful (Islamic insurance). The regulations reinforces the mutual cooperation and shared responsibility by strengthening governance structures, enhancing transparency, and priotising consumer protection. As a reflection, the regulations build public trust, promote ethical practices, and safeguard policyholder interests. Beyond ensuring strong shariah compliance, the regulations also enhances resilience, accountability, and sustainable growth within the takaful industry.

✍🏾Public Takeaways

📝Only Licensed & Approved Operators

📌Takaful and retakaful can only be offered by operators or windows licensed/approved by the Insurance Regulatory Authority of Uganda.

📌Illegal operators face penalties, this protect the public from scams.

📝Clear Shari’ah Compliance Assurance

📌All products must comply with Shari’ah principles.

📌Each operator/window must have a Shari’ah Committee to supervise compliance.

📝Independent Shari’ah Oversight

📌Each takaful operator must ensure that Shari’ah Committees are qualified, independent, and not controlled by management.

📌They issue binding opinions, review products before launch, and submit annual reports to the regulator.

📝Full Disclosure to Consumers

Consumers must be told:

📌The operator is licensed/approved for takaful.

📌Business is conducted under Shari’ah principles.

📌Who sits on the Shari’ah Committee and how compliance reviews are done.

📝Protected & Segregated Takaful Funds

📌Contributions go into dedicated takaful funds, separate from shareholders’ money.

📌Funds cannot be misused or cross-lent between products protecting participants’ money.

📝Fair Sharing of Surplus & Deficit

📌Rules require a written, regulator approved agreement explaining how surplus or deficit is shared between participants and shareholders no hidden terms.

 📝Prudent & Halal Investments Only

📌Investments must be approved by the regulator and Shari’ah-compliant no interest-based or prohibited activities.

📝Strong Governance & Capital Adequacy

📌Operators must meet capital and prudential standards, ensuring they can pay claims.

📌Governance aligns with national insurance laws, adapted for takaful.

📝Continuous Internal & Regulatory Review

📌Mandatory independent internal Shari’ah reviews plus regulator oversight enhance ongoing compliance and accountability.

🔍Reference: The Insurance (Takaful and Retakaful) Regulations - 2025

The writer is Ssonko Muhammedi, PhD scholar (Islamic Banking and Finance) UniSHAMS University - Malaysia | Lecturer: Islamic Call University Call College | Training and Research Assistant - HOZWU

Contacts: +256754656089 | Email: ssonko65@gmail.com