Gulf’s mixed takaful rules hurting margins, ratings -agency

According to the rating agency A.M. Best, inconsistent regulation across the Gulf's takaful industry affects profit margins and credit ratings, while providing an arbitrage opportunity. The lack of coordination among regulators causes difficulties for takaful operators, increasing therefore their funding costs by as much as 1 percentage point. Some companies take advantage of the variation in rules - booking business in one country while selling policies elsewhere. Jurisdictions with specific takaful rules include the United Arab Emirates, Bahrain, the Dubai International Financial Centre and the Qatar Financial Centre. Some others, such as Kuwait, do not have specific regulations.

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