Retakāful operation in Malaysian practice: issue and solutions

Retakāful is an important financial tool through which takāful operators pay an agreed amount from takāful fund to the retakāful operators in order to get protection against loss or unexpected risk. Retakāful is an alternative for takāful operators to reinsure their risk. Some of the concepts and practices in reinsurance are relevant and acceptable in the practice of retakāful. This study attempts to discuss and examine retakāful operation as implemented by retakāful operators in Malaysia. Three retakāful operators in Malaysia had been selected by the researcher in order to get a clearer understanding of the implementation of retakāful operation models which are ACR Retakāful SEA Berhad, MNRB Retakāful Berhad and Munich Re Retakāful Berhad. In addition, this study attempts to analyse the fiqhī issues in retakāful operation

Ownership of Takaful Benefit in Family Takaful in Malaysian Takaful Practice

The paper aims to identify the issues on the ownership of takaful benefit in family takaful in Malaysian takaful practice. The study only focuses on the family takaful plan because it is related to death. The question might be raise in this study in determining the money paid by the takaful operator on the death of the participant before the policy matures belong to the participant’s estate or not. It is important to identify this issue distinctly as to ensure the five norm of maqasid al- Shari’ah which are religion, life, family, intellect and property is well preserved and protected. This study adopts qualitative approach with SharÊÑah advisors, Shari'ah officers and a takaful expert in Kuala Lumpur and Selangor area. Data collection employs semi-structured interviews with a fairly open framework which allow for focused, conversational and two-way communication. The results revealed that, no doubt to say the property (maal) can be treated as takaful benefit. With regards to the issue of ownership, takaful benefit is owned by the participant in two ways; firstly from Participant Investment Fund (PIF), while secondly from Participant Risk Fund (PRF). The paper offered a clear picture on the understanding of ownership and tak?ful benefit in its definition, classifications, relation between ownership of tak?ful benefit and opinion towards the application of takaful in Malaysia. Therefore, at the same time, provide some recommendations for standardizing the nomination practice in the takaful industry

Awareness of flood victims in the east-coast region of Malaysia towards the takaful flood policy: a crosstabulation analysis based on demographic variables / Marhanum Che Mohd Salleh and Nan Noorhidayu Megat Laksana

This study is conducted to; first, investigate the level of awareness among flood victims in Malaysia towards takaful policy. Second, to examine differences of demographic background (age, marital status, occupation, education background, and income level) among the victims towards awareness on the takaful. Overall, a total of 536 flood victims located at east-coast area of Malaysia have participated in the survey. Based on descriptive and crosstabulation analyses, majority of the victims were uncertain about the takaful. In terms of background differences, the younger generation were more aware compared to the elders, single victims were more aware than the married, and those who were in high level of education (diploma, degree, and phd holders) were more aware on the existence of takaful. and the needs to have takaful protection. The findings of this study provide important suggestion to offer an affordable micro-takaful policy for future financial protection for the lower income and most vulnerable flood victims in the country. On top of that, various efforts should be done to increase the level of awareness among the Malaysian on the importance of participating in the takaful policy

A STUDY ON BAY'TAWARRUQ (MONETIZATION) FROM THE PERSPECTIVE OF NATIONAL BANK MALAYSIA AND AAOIFI STANDARDS: MALAYSIAN PRACTICE

(IFSA) on 2013, Islamic financial industry has shown its commitments towards the financial industry and its stakeholders through the development ofa distinctive products based on the various Sharr'ah contracts such as Islamic hire purchase for vehicle and machine based on the concept ofal-lidrah Thumma al-Bay' (a contract ofleasing ending with sale), islamic personal financing based on the concept ofBay' al-I'nah (sell and buy back with arrangement). Islamic house financing based on the concept of Mushdrakah Mutanaqi;ah (diminishing joint ventwes) and others. On 289 July 2005, the Shart'ah Advisory Council of National Bank Malaysia (SAC BNM) had resolved that financing and deposit product based on the concept oi Tu*a*rq is permissible. This resolution then has become an alternative way gr the Islamic financial institutions to overcome ttre tiquidity issue without relying on the controversial contract ofBay' al-'-Inah anymore. Tawarruq is a process where a person buys a commodity with deferred price, subsequently sells it on spot palanent, usually with lower price to another party other than the first seller, with intention to obtain cash/liquidity. Thus, this study aims to discuss the iole of National Bank Malaysia and Accounting and Auditing of Islamic Financial Institutions (AAOIFD Standard regarding the concept of Tawam.rq in Malaysia. With regard to the methodology, this study will use both qualitative and quantitative methods. ifo*"rr"r, the qualitative method will become the main method for this study. The instrument of qualitative method is an interview session with the main stakeholders involved in the development of Tawarruq Standard. This study will contribute from the theoretical and practical perspective of Tawamrq operation a:rd application in Malaysia, argument and deliberation ofTawarruq not only from classical lslamic perspective, but also from modern application and discussion

A Study on Monetization (Tawatuq) from the perspective of Bank Negara Malaysia and AAOIFI Standards: Malaysian Practice

Through the commencement of Islamic Banking Act (IBA) on 1983, until the enactment of Islamic Financial Services Act (IFSA) on 2013, Islamic financial industry has shown its commitments towards the financial industry arld its stakeholders through the development of a distinctive products based on the various Islamic contracts such as Islamic hire purchase for vehicle and machine based on the concept of a contract of leasing ending with sale (al-Ijdrah Thumma al-Bay ), Islamic personal financing based on the concept of sell and buy back with arrangement (Bay' al-I'nah),Islamic house financing based on the concept of diminishing joint ventures (Musharakoh Mutandqi;ah) and others. On 28ft July 2005, the SharT'ah Advisory Council of National Bank Malaysia (SAC BNM) had resolved that financing and deposit product based on the concept of monetization (tawaruuq) is permissible. This resolution then has become ut alteraative way for the Islamic financial institutions to overcome the liquidity issue without relying on the controversial contract of sell and buy back with arrangement (Bay' al-'Inah) anymore. Monetization (tawarruq) is a process where a person buys a commodity with defened price, subsequently sells it on spot payment, usually with lower price to another party other than the first seller, with intention to obtain cash/liquidity. Thus, this study aims to discuss the role of National Bank Malaysia and Accounting and Auditing of Islamic Financial Institutions (AAOIFD Standard regarding the concept of monetization (tawarruq) in Malaysia. With regard to the methodology, this study will use both qualitative and quantitative methods. However, the qualitative method will become the main method for this study. The instrument of qualitative method is an interview session with the main stakeholders involved in the development of monetization (tawarruq) Standard. This study will contribute from the theoretical and practical perspective of monetization (tawarruq) operution an! application in Malaysia, argument and deliberation of monetization (tawarruq) not only from classical Islamic perspective, but also from modern application and discussion

HIBAH IN TAKAFUL BENEFIT: ISSUES AND SOLUTIONS

This paper examined the validity of executing hibah in Participant Investment Fund (PIF), upon occulrence of certain event such as participant's death, whether it should take effect after participant dies or during the lifetime of the participant. This paper will also conduct an empirical study related to the issues in order to examine the theoretical aspects relevant to the practice of mkaful industry. Besides, this study only focuses on the family takdful plut because it is related to death. For this research, the researcher adopted semi-structured interviews because this type of interview is able to collect both qualitative and quantitative data. The researcher has conducted interview session with I 7 Shar|'ah advisors, ll SharT'ah officers and 3 takaful experts at eleven talatful operators in Malaysia. With regards to the issue of hibah, all takaful operators in Malaysia already applied hibah distribution and a nominee can be considered either as an executor or a beneficiary in nomination. Even though there are some Shart'aft scholars disagreed with the implementation of hibah ruqba, the researcher found that hibah ruqba is relevant to be applied in nomination. In addition, the main contribution of this study is, to facilitate or monitor the application of hibah ruqba by all mkaful operators in Malaysia

Examining the Feasibility of Waqf (Islamic endowment)-based Islamic Insurance Product from the Malaysian Legal Perspective

Compare to other countries, control power over the Islamic endowment fund (Waqf) in Malaysia is basically put under one statutory body for each state called State Islamic Religious Council. The worse scenario is, there is no standard shared among these councils in terms of managing the Waqf fund (asset) where each state council had their own enactment to govern the management of the fund. In this context, this study tries to discuss the feasibility of Waqf (Islamic Endowment)-based Islamic insurance product to be practiced in Malaysia considering the opinion from the state Islamic religious council and legal experts in the industry. Adopting qualitative methodology, focus group discussion with the council representatives and legal experts have been conducted to achieve the research objective. Overall, it is found that all respondents have agreed with the proposed Waqf-based Islamic insurance product as it has special values that may inculcate the culture of brotherhood in society as this concept encourages people to give something to others without receiving any return especially in financial matters. Hence, a part of their agreement, the councils has stated their concern on Waqf enactments which were different among the states in Malaysia and based on discussion with the legal experts, they have proposed to adopt agency principle in order to cater the issue of control over the waqf fund. This study contributes in discussing the feasibility of the Waqf principle (endowment) to be introduced in the Islamic insurance products from the legal perspective

Awareness of flood victims in the East-Coast region of Malaysia towards the takaful flood policy: a crosstabulation analysis based on demographic variables

This study was conducted to; first, investigate the level of awareness among flood victims in Malaysia towards the takaful policy. Second, to examine differences of demographic background (age, marital status, occupation, education background, and income level) among the victims towards awareness on the takaful. Overall, a total of 536 flood victims located at the east-coast area of Malaysia participated in the survey. Based on the descriptive and crosstabulation analyses, most of the victims were uncertain about the takaful. In terms of background differences, the younger generation were more aware compared to the elders, single victims were more aware than the married, and those with a high level of education (diploma, degree, and PhD holders) were more aware of the existence of takaful and the need to have takaful protection. The findings of this study provide important suggestion to offer an affordable micro-takaful policy for future financial protection for the lower income and most vulnerable flood victims in the country. Various efforts should be done to increase the level of awareness among Malaysians on the importance of participating in the takaful policy

Examining the Feasibility of Waqf (Islamic Endowment)-based Takaful Model from the Malaysian Legal Perspective: اختبار جدوى نموذج التكافل المستند إلى الوقف في ضوء القانون الماليزي

In 2004, the State Islamic Religious Council (SIRC) in Malaysia stated their concern on jurisdiction pertaining to control of state waqf assets, which were different among the states in Malaysia. Based on discussions with the legal experts, they have proposed the adoption of the agency principle in order to cater to the issue of control over the waqf fund. This study discusses the feasibility of waqf (Islamic endowment)-based takāful products to be practiced in Malaysia by considering the opinions of SIRC and legal experts in the industry. In order to achieve the research objective, this research adopts a qualitative methodology and focus group discussions with the SIRC representatives and legal experts. Overall, it is found that all respondents have agreed with the proposed waqf-based takāful model as it has special values that may inculcate the culture of brotherhood in society as this concept encourages people to give something to others without receiving any financial return. This study contributes to the discussion of the feasibility of waqf (endowment) principle to be introduced in the takāful products from the legal perspective

Examining the feasibility of waqf (Islamic endowment)-based takāful model from the Malaysian legal perspective

In 2004, the State Islamic Religious Council (SIRC) in Malaysia stated their concern on jurisdiction pertaining to control of state waqf assets, which were different among the states in Malaysia. Based on discussions with the legal experts, they have proposed the adoption of the agency principle in order to cater to the issue of control over the waqf fund. This study discusses the feasibility of waqf (Islamic endowment)-based takāful products to be practiced in Malaysia by considering the opinions of SIRC and legal experts in the industry. In order to achieve the research objective, this research adopts a qualitative methodology and focus group discussions with the SIRC representatives and legal experts. Overall, it is found that all respondents have agreed with the proposed waqf-based takāful model as it has special values that may inculcate the culture of brotherhood in society as this concept encourages people to give something to others without receiving any financial return. This study contributes to the discussion of the feasibility of waqf (endowment) principle to be introduced in the takāful products from the legal perspective