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The Central Bank of the UAE has required all licensed takaful operators to create a Takaful Insurance Fund possessing its own legal personality and independent financial liability under regulations that entered into force on September 14, 2026. This framework replaces the 2022 version and specifies that the fund must function according to the Central Bank Law along with standards from both the Central Bank and the Higher Sharia Authority. Assets and liabilities of the fund are to be fully segregated from those of the establishing company.
A Pinsent Masons legal briefing published September 29, 2026, identified the independent fund requirement as one of the most significant updates, noting that the structure moves beyond a simple ring-fenced account inside the company. The change strengthens segregation of policyholder funds from the operator’s own balance sheet. The rules cover takaful insurers, re-takaful companies, foreign branches and conventional insurers running takaful windows.[[1]](https://www.pinsentmasons.com/out-law/news/uae-central-bank-overhauls-takaful-insurance-framework)
Conventional insurers seeking to offer takaful products must first obtain Central Bank approval to operate a dedicated window, according to the published rulebook. Each window requires its own Sharia governance framework, an internal Sharia supervision committee and a designated head whose responsibilities are confined to that line of business. Accounts for the window, including its fund, must be maintained separately from the parent company’s records.
Central Bank of the UAE figures show that takaful gross written contributions totaled AED 6.4 billion in 2025, an 18.5 percent rise from the prior year and equivalent to 8.5 percent of the national insurance market. The segment grew an additional 16 percent in the first quarter of 2026 while the overall insurance industry posted premiums of 75.2 billion AED for the full year of 2025. Ten takaful operators held licenses at the end of 2025 within a market that included 58 total insurance entities.[[2]](https://openkoda.com/takaful-market-size/)
The updated regulation clarifies permissible operational models, restricting combinations such as wakala with mudaraba unless the Central Bank and Higher Sharia Authority grant specific approval. Firms previously relying on such models may need to adjust their structures to achieve compliance. Internal Sharia supervision committees now face expanded responsibilities, including preparation of an annual Sharia report and ongoing oversight of all takaful-related activities.
Provisions addressing solvency requirements, surplus distribution, qard hasan financing and participant investment accounts form additional layers of the framework, the Central Bank rulebook states. Fit and proper criteria apply to committee members while a board of trustees oversees each Takaful Insurance Fund. Disclosure obligations have been tightened to promote greater transparency across the sector.
The regulations consist of 32 articles ranging from definitions and scope to rules on re-takaful, zakat funds and transfers of participant accounts, according to the official CBUAE documentation released in September 2026. Operators are reviewing existing arrangements to align with the independent fund model and associated governance enhancements following the mid-month implementation date.
