Insurance laws Somalia
Somalia's insurance sector is undergoing significant reforms aimed at establishing a comprehensive legal and regulatory framework. Recent legislative developments have laid the groundwork for a more structured and transparent insurance industry.
📜 Recent Legislative Developments
Insurance Companies Bill:Passed by the Somali Parliament on March 12, 2025, this bill provides a legal foundation for the establishment and operation of insurance companies within Somalia It aims to regulate the insurance market, ensuring fair practices and consumer protectio
Financial Institutions Bill:Also approved on March 12, 2025, this bill addresses the broader financial sector, including banking and other financial services seeks to enhance the stability and integrity of financial institutions, aligning with international standards and combating financial crimes such as money laundering and terrorist financing
🏛️ Regulatory Authorities
Central Bank of Somalia The Central Bank oversees the financial sector, including insurance companie. It is responsible for licensing, supervision, and ensuring compliance with financial regulation. The bank employs both on-site and off-site examination methodologies to assess the health of financial institution.
National Insurance Authority (Somaliland) In the autonomous region of Somaliland, the National Insurance Authority, established under Law No. 92/2020, regulates the insurance industr. It ensures the operational sustainability of insurance companies and safeguards consumer interest
🛡️ Consumer Protectio
Consumer protection in Somalia's insurance sector is evolvig Insurers are required to provide clear and transparent information about policy terms, coverage, and exclusios Policyholders have the right to fair treatment and access to dispute resolution mechaniss However, challenges remain in enforcement and public awarenes
📈 Market Landscape
*Takaful Insurance: Conventional insurance is not practiced in Somalia due to non-compliance with Shariah principe Instead, Takaful, a form of Islamic insurance, is prevaln.The first Takaful company, First Somali Takaful and Re-Takaful (FISO Insurance), was established in 21.As of 2023, nine Takaful operators are registered with the Central Bank of Somaia
*Licensing of Insurance Brokers: In 2013, AAIB Insurance became the first licensed insurance broker in Somalia, receiving a special permit from the Ministry of Commerce and Indusr. This milestone marked the beginning of formal insurance brokerage services in the counry.
Somalia's insurance industry is transitioning from an informal to a regulated setr. =Recent legislative efforts have established a legal framework for insurance companies, and regulatory bodies are being strengthened to oversee the induty.While Takaful remains the dominant model, the evolving legal and regulatory landscape aims to promote transparency, consumer protection, and industry growth.
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