In the Sultanate of Oman, Islamic insurance is reserved for dedicated takaful companies, governed by a law promulgated by royal decree on 6 March 2016 and supervised by the Financial Services Authority; Al Madina Takaful and Takaful Oman share the segment.
The Financial Services Authority since 2024
Created in March 2024, the Financial Services Authority took over insurance supervision previously carried out by the Capital Market Authority, which was dissolved. It also regulates capital markets and the accounting profession, with a mission to develop the Omani financial sector.
A takaful law adopted in two stages
Oman's State Council approved the takaful law in February 2015, and it was then promulgated by royal decree on 6 March 2016. The official register lists decree No. 11/16 on that date, although its exact title has not been verified.
No Islamic window allowed
In Oman, only dedicated takaful operators are allowed to offer insurance products that comply with sharia. A conventional insurer therefore has no way of opening an Islamic window, a rule that is also found in the Kuwaiti takaful system.
Demanding licensing conditions
Omani law requires takaful companies to hold minimum capital of 10 million rials and to be listed on the Muscat stock exchange. Licences are granted for five renewable years, which obliges operators to demonstrate their compliance on a regular basis.
A sharia committee of at least three members
Every Omani operator must have an internal sharia committee of at least three members, responsible for overseeing products and investments. How these bodies work is explained in more detail in the role of the sharia committee.
Al Madina Takaful, the country's first company
Founded on 15 May 2006, Al Madina Takaful is presented as Oman's first takaful company. It converted to takaful after receiving a CMA licence in 2014 and is listed on the Muscat stock exchange under the code AMAT.
A category A health licence
Al Madina Takaful has obtained a category A health insurance licence from the FSA under Oman's new regulatory framework. For policyholders, this licence opens access to sharia-compliant health contracts issued by a fully dedicated operator.
Takaful Oman, the second player
Takaful Oman is the country's second takaful operator and is also listed on the Muscat Stock Exchange. Together with Al Madina Takaful, it makes up the entire local Islamic offering, which limits comparison but makes licence checks easier.
A market share still in the minority
By mid-2024, Oman had sixteen insurers, fourteen conventional and two takaful. Conventional insurers held around 86% of gross direct premiums, and the two Islamic operators accounted for 7.3% of general insurance in 2024.
Contributions up 25%
Combined gross contributions of the two Omani takaful companies rose from 55 to 68 million rials between the third quarter of 2023 and the third quarter of 2024. The sector as a whole collected 476.8 million rials in premiums in 2024.
Local re-takaful since 2024
In February 2024, Oman Re obtained a re-takaful licence. Local operators can thus cede part of their risks to an Islamic reinsurer based in the country, a topic covered in detail in takaful reinsurance.
A historical benchmark to read with caution
In 2015, before the law was promulgated, takaful represented 9% of Omani gross direct premiums, or 38.77 million rials. This figure and the 2024 one rest on different bases and should not be compared directly.
Steps to get takaful cover in Oman
- Check that the operator is licensed by the Financial Services Authority and that its five-year licence is current.
- Request a quote from Al Madina Takaful and Takaful Oman, the Sultanate's only dedicated Islamic operators.
- Read up on the management model, wakala or mudaraba, and ask for the rulings of the Omani company's sharia committee.
- Compare the contribution, management fees and surplus distribution rule set out in the general terms.
- For health cover, confirm the operator's health licence category and the healthcare network covered.
- Report a claim in writing with supporting documents and keep the acknowledgement of receipt.
Breaking down the price of an Omani takaful policy
| Price component | Destination | What changes it |
|---|---|---|
| Tabarru contribution | Participants' common fund | Cover chosen and level of risk |
| Wakala fee | Remuneration of the takaful company | The operator's fee scale |
| Mudaraba share | Remuneration on investments | Compliant financial results |
| Re-takaful cession | Protection of the fund against large risks | Agreements with Oman Re or other reinsurers |
| Distributable surplus | Possible return to participants | Claims experience and contract clause |
File to prepare in the Sultanate
- Omani resident card or passport
- Proof of address in the Sultanate
- Vehicle registration card for motor takaful
- Title deed or lease for the home
- Medical questionnaire for a health or family contract
- Murabaha or ijara contract if Islamic financing is covered
Common misconceptions about Omani takaful
- Looking for an Islamic range at an Omani conventional insurer, when the law reserves these products for dedicated takaful operators.
- Forgetting that insurance supervision moved from the Capital Market Authority to the Financial Services Authority in 2024.
- Comparing the 9% share of 2015 with the 7.3% share of 2024 without noticing they rest on different bases.
- Signing without consulting the rulings of the sharia committee, which is mandatory and has at least three members.
- Settling for a surplus promise without a calculation method written into the Omani policy.
Quick answers on Islamic insurance in Oman
How many takaful companies operate in Oman?
Two: Al Madina Takaful and Takaful Oman, both listed on the Muscat Stock Exchange. By mid-2024 they operated alongside fourteen conventional insurers, which cannot offer Islamic products because the law reserves this segment for dedicated operators.
Which regulator oversees Omani insurance?
The Financial Services Authority, created in March 2024, which replaced the Capital Market Authority in supervising insurance. It also regulates capital markets and the accounting profession and issues licences, including the category A health licence.
What conditions does Omani law impose on takaful operators?
Minimum capital of 10 million rials, a listing on the Muscat stock exchange, a renewable five-year licence and an internal sharia committee of at least three members, under the takaful law promulgated by royal decree in March 2016.
Is there an Omani takaful reinsurer?
Yes, Oman Re obtained a re-takaful licence in February 2024. Local takaful companies therefore have a compliant reinsurance option within the country, which strengthens the market's capacity to cover large risks.