Technical Aspects of Takaful By Azman Ismail

  Business Operatio

Proposal for Enhance

                          Azma

      HIJRAH Strategic Advisor

                   Tel : 603-42

                   Fax : 603-42

       Email : azman.hijrah@em

               azmanwong@ya

             Shariah

  Surplus              Legal I

Reserving Acco

     Pricing           Shariah

             Retakaful

Takaful Practitioners technically

“incompetent” when it comes to sha

issues.

Reflect the state mentioned by Abd

Qadir Audah

The need for practitioners to be

‘technically’ competent in both shari

insurance knowledge

Application/Proposal Forms

Policy/Certificate Wordings

Accounting of Premiums/Contributio

Claims & Retakaful (Additional

discussions on accounting and reta

Surplus distribution – shariah issue

Employ more shariah graduates

Expose practitioners to usul fiqh, qa

fiqhiyah & fiqh muamalah

Shariah scholars given allowance to

at least once a week

Not all countries have legal infrastru

Those countries that have legal

infrastructure – conflicts between

legislations

Gap between legislators, supervisor

players

Legal infrastructure for Muslim coun

acts of parliament, decrees, DG

guidelines,

Committee for legal reforms – to es

and enhance takaful position

Common ombudsman – e.g. IFSB e

Contribution

Claims/Reserves

Surplus

Cash/Accrual Issues

Late payment issues

Agency/collection issues

Contribution Warranty Issues

Unearned/Unexpired risks

IBNR (including IBNYR, IBNER)

Valuation Reserves

Accounting Standards – AAOIFI ba

Standard Contractual Model

Financial Models

Lacking In Takaful

Parallel To Conventional Audit

Areas of Audit

Combine shariah & technical perso

conduct regular audit

Develop audit standards & instrume

Make it compulsory on operators

Training for shariah auditors

Retakaful Programming

{Shariah Considerations

 zHolding company is conventional insurance

 zCo-takaful – among operator & with conven

{Retention

 zBetween shariah & business considerations

{Structure

Retakaful Pool Beyond Geographic

Groupings

Strong Technical Retakaful Operato

Strategic Partnership With Reinsure

Transfer of Appropriate Technology

“Scientific” approach

General takaful – actuarial input

Pricing factors

“Image”

Compilation & coordination of data

operators

Conventional reserving methods for

general insurance

{May elect to choose most suitable base

 shariah considerations

Conventional reserving methods for

insurance

{Most may be suitable from shariah angl

{Based on legal maxims

Pure Mudharabah Model

Modified Mudharabah Model

Basic Wakalah Model

Wakalah-Jualah Model