The central bank of Somalia has officially commenced the licensing of Islamic insurance operators, ending the decades of unregulated activity in the sector.

The CBS has issued the first-ever Takaful licenses to four domestic companies, signaling a major shift towards a formal Shari’ah-compliant economy.

The four companies issued with the license of operations are First Somali Takaful Insurance LTD, Amanah Insurance LTD, Baraka Takafal Insurance LTD, and Salmer Insurance.

The new move brings the regulation of players and insurance of the sector under the direct oversight of the CBS, ensuring that risk-based supervisory standards are applied uniformly across the industry.

Somali began the process back in May 2025 with the enactment of the Islamic insurance (Takaful) law. Unlike traditional insurance, Takaful operates on the principle of mutual assistance (Ta’awun) and voluntary contribution (Tabarru), where policyholders contribute to a pool used to indemnify participants against losses.

The new regulatory framework ensures these operations remain strictly aligned with Shariah principles while meeting the international risk management benchmarks.

The new regulations will provide a regulated environment and provide the stability needed for both domestic and foreign investors to commit capital to Somali projects.

This will also allow small business owners and farmers to protect their livelihood, fostering a more resilient economy in Somalia.

Somali now intends to have a formal oversight business environment free from fraud and handle claims fairly.

The Central Bank of Somalia has reaffirmed its commitment to promoting an inclusive and stable financial system as these four companies begin formal operations.