Takaful exchange

The rapid growth of the Takaful sector means there are constantly changing issues and challenges facing the industry. The ICMIF takaful exchange is designed to facilitate the sharing of knowledge and opinions across the takaful sector in an effort to increase awareness of takaful principles and practices, encourage open and infomal debate and increase understanding of different viewpoints. ICMIF will send out questions on a regular basis for comments, the answers received will then be made available on the web site, visitors also have the opportunity of sending in questions or request for information.
1 With whom does ultimate responsibility to comply with Islamic Shariah rules lie? Management/the Shariah board or shareholders?
2 Should shareholders put Shariah compliance processes in place? Is this more important if management or key personnel is non-Muslim?
3 As a Takaful/Retakaful operator do you publish the activities (Fatwas, rulings and guidelines) of the Shariah Board?
4 Do you undertake a Shariah Review? if so can you provide details on how extensive and often it is?
5 Should the Shariah board have a say in the moral functioning and activities of the organization to reflect the principles of Takaful?
6 In conventional insurance if there is a deficit, the shareholders provide an injection. In Takaful if there is a deficit the operator provides a qard hassan loan. As a loan it is an asset of the operator's fund, however in the Takaful fund it is accounted
7 In some cases the Takaful operator pays out more in commissions to the direct agent than it has from the received from the retakaful operator (and retakaful is a high percentage of the risk). Is it fair that other participants pays for this deficit?
8 For long tailed coverage, is it proper corporate governance for the operator to share in this surplus? When if the reserves are later increased causing losses, the operator will not share in these losses.
9 Should management/shareholders and Shariah board be more accountable? could this be done via an annual participants meeting?
10 Should policyholders have a say in the election of the Shariah Board? or should it be just a shareholder decision?
11 Is there a need to have a "participants' advocate" independent of the Takaful operator?
12 Calculating surplus on an underwriting year basis will result in distribution some time (2 to 3 years) after the end of that underwriting year. Is this generally accepted among current takaful providers?
13 Where there is a number of product lines, is it essential that the surplus is calculated for each product which could leave the company in deficit but paying surpluses on individual lines?
14 Regarding the distribution of surplus, which of the following is the 'best' method of undertaking such distribution and has the administration of the suplus distribution been problematical at all?
15 Is it acceptable under the principles of takaful for rating to differentiate for the respective risk involved, taking into account moral and physical hazards as with conventional insurance, as each member would be paying a tabarru relevant to their risk
16 Whether Tabarru amount is to be deducted from maturity benefit?
17 How the death benefit amount is arrived at in case of Term, Endowment and Anticipated Endowment policies?
18 What terms and conditions need to be followed for revival of lapsed policy and whether any charge/penalty can be imposed to policy holders for the unpaid period?
19 Whether, discrimination between male and female is permissible while underwriting life policy?
20 What should be the formula for calculation of surrender and paid up value?
21 Whether flat rate contributions and the flat rate Tabarru can be made applicable when duly approved by Actuary?
22 Is there available a central resource (print or virtual media) collating and publishing Islamic edicts (fatwa) on business practices (muamalah)? And one that preferably has academic discussion together with the edicts?
23 Why Shariah compliant business enterprises do not seem to do as well as conventional enterprises. Is a Scholarstic review and re- interpretation of permissable Muamalah practices required?
24 What is the 'source' of the obligation of corporations to pay zakat and its basis of calculation. Note corporations may have different mix of Muslim interest.

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