Somaliland’s efforts to trade with the rest of the world will suffer as a result of a lack of insurance.

[Deeq A.]

In Somaliland, deaths and injuries caused by traffic accidents are borne by the individuals involved, with the assistance of clans that have taken the place of insurance companies. This is due to the fact that there are no insurance companies and people are unaware of their importance.

Some may wonder why, if our clan system is working well we need to an insurance, others wonder whether insurance is permissible under Islamic law.

Regardless, many people believe that establishing insurance companies will reduce or eliminate tribalism and reliance on the clan system.

Several companies have dared to offer insurance services to the Somaliland community, but the service they offer is known as Takaful, or voluntary insurance. It’s similar to the clan’s system of establishing a fund deposit to pay off whatever is owed. A group of people or workers, for example, could establish a fund to compensate for the damage done to an individual, a member, or those whose vehicle was damaged.

Takaful is a type of Islamic insurance in which members contribute money to a pool system in order to protect each other from loss or damage. Takaful insurance is based on Sharia, or Islamic religious law, which explains how individuals are responsible for cooperating and protecting one another.

According to the chairman of the Somaliland National Insurance Agency, uninsured vehicles will be prohibited on Somaliland’s roads beginning in mid-2021. issuing an order requiring motor vehicle insurance, with the goal of insuring damage caused by the vehicle or doing business with.” similar orders to various motorists across the country requiring insurance companies to cover all types of vehicles

The chairman’s attempts were unsuccessful. When he attempted to impose decrees on motor insurance, he was met with strong opposition from motorists who filed a lawsuit in the House of Representatives. On the same day, the president issued a statement announcing the establishment of the National Insurance Board, which did not exist at the time.

The Insurance Agency Act (Act No. 92/2020), which established the Somaliland National Insurance Agency, does not require motorists to obtain insurance, and there is no good insurance law in place as of yet.

The Insurance Companies bill is currently being debated in the House of Representatives, where they are debating issues such as, do we need vehicle insurance? Is the insurance in accordance with Islamic Sharia? Is insurance compulsory for motorists, or is it optional, and so on.

Insurance is not only important for car damages, but it is also very beneficial to anyone looking to protect their assets and property from financial risk and losses: it will help pay for medical emergencies, hospitalization, the contraction of any illnesses and treatment, and future medical care, as well as turn accumulated capital into productive investments. Insurance also allows for loss mitigation, financial stability, and the promotion of trade and commerce.

Somaliland is a major player in the world, with a strategic location that is critical to the global economy and security. Somaliland also has a good reputation for preventing the spread of Al Qaeda-linked international terrorism from Somalia. It has also eliminated pirates from its seas, as a result, now is the time for the rest of the world to trade with Somaliland, as well as for Somaliland to deal with them. However, Somaliland’s lack of insurance would be a big obstacle to trading with the rest of the world.

Then there’s the issue of better regulation and creating an environment in which foreign companies can offer better insurance. Laws such as insurance and investment law, on the other hand, are critical to a country’s external relations. Without insurance, a location is considered a dangerous place where money and people cannot be trusted. Furthermore, it will have a negative impact on government credibility.

Yousef Timocadde
yousefnxl@aol.com

 

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