Islamic Finance 7b


Published on

Published in: Economy & Finance, Business
1 Like
  • Be the first to comment

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Islamic Finance 7b

  1. 1. Management of Banking and Takaful Institutions Lecturer: Mr. Abdullaah Jalil 06/02/09 2006 (C) Abdullaah MBA4013 Semester I, Session 2006/2007 Lecture 10: Takaful Industry Structure: Supervision, Function and Role
  2. 2. 06/02/09 2006 (C) Abdullaah
  3. 3. Lecture Outlines <ul><li>Takaful Act 1985 </li></ul><ul><li>Risk Management Instrument </li></ul><ul><li>Shariah-based Insurance </li></ul><ul><li>Takaful Products </li></ul>06/02/09 2006 (C) Abdullaah
  4. 4. Introduction <ul><li>Insurance is a risk-sharing arrangement. In this arrangement between two parties, one party (the insurer) agrees to indemnify another party (the insured) against certain losses specified by a contract (the policy). </li></ul><ul><li>Insurance is an economic device by which individuals and organizations can transfer pure risks (that is, uncertainty about financial losses) to others. Thus, economic units may now choose the risks that they would like to bear and that they are comfortable with. </li></ul>06/02/09 2006 (C) Abdullaah
  5. 5. <ul><li>The unwanted” risks may be transferred to others in exchange for a fee or a premium. Pure risks are different from speculative risks. With pure risk the outcome can only be a loss or no loss; there is no possibility for gain. </li></ul><ul><li>In contrast, speculative risk means that uncertainty about an event could result in either a gain or a loss. Pure risks arise from events over which one has little or no control. </li></ul>06/02/09 2006 (C) Abdullaah
  6. 6. Types of Insurance 06/02/09 2006 (C) Abdullaah Controversial Halal Insurance Social Insurance (ijtimai’) Mutual Insurance (tabaduli) Commercial Insurance (tijari) Pension System Social Security System Public Health System
  7. 7. Islamic Scholars’ Standpoint towards Commercial Insurance 06/02/09 2006 (C) Abdullaah Impermissible (Majority) Sheikh Muhammad Bakhit al-Muthi’I; Sheikh Allamah Ahmad Ibrahim al-Husayni; Sheikh Abdurrahaman Qara’ah; Sheikh Abu Zahrah; Sheikh Abdullah al-Qalqayli; Dr. Siddiq Dharit; Islamic Fiqh Academy Permissible Sheikh Abdul Wahhab Khallaf; Sheikh Ali al-Khafif; Sheikh Abdurrahman Isa; Sheikh Mustafa al-Zarqa’. General: Permissible Life: Impermissible Sheikh Muhammad Hasan al-Hajwi; Sheikh Abdullah Ibn Zayd Ali Mahmud; No fatwa (Tawaqquf) Sheikh Muhammad al-Madani
  8. 8. Islamic Standpoint towards Commercial Insurance 06/02/09 2006 (C) Abdullaah Sale of Debt with Debt Qimar & Maysir Gharar & Jahalah Riba Conventional Insurance
  9. 9. Introduction <ul><li>Takaful is derived from an Arabic word which means mutual guarantee, whereby a group of participants agree to mutually guarantee among themselves against a defined loss. </li></ul><ul><li>This simple concept of takaful is the foundation of the takaful business, which is the present Shariah-compliant insurance. </li></ul>06/02/09 2006 (C) Abdullaah
  10. 10. Categories of Takaful (Management) 06/02/09 2006 (C) Abdullaah Cooperative / Mutual Takaful Tijari/ Commercial Cooperative or mutual takaful whereby the participants themselves manage and accountable for the takaful scheme; Takaful Tijari or commercial takaful whereby management of takaful scheme is undertaken by separate entity specifically appointed for this purpose known as takaful operator.
  11. 11. Categories of Takaful (Products) 06/02/09 2006 (C) Abdullaah Family takaful General takaful that provides a combination of long-term savings and protection for participants and their dependents arising from death, disability or survival. focuses on a short-term protection of properties and liabilities against any loss or damage.
  12. 12. Takaful: Underlying Concepts 06/02/09 2006 (C) Abdullaah
  13. 13. Three Concepts of Takaful 06/02/09 2006 (C) Abdullaah
  14. 14. Tabarru-Based Takaful 06/02/09 2006 (C) Abdullaah
  15. 15. Mudarabah-Based Takaful 06/02/09 2006 (C) Abdullaah
  16. 16. Wakalah-Based 06/02/09 2006 (C) Abdullaah
  17. 17. Chart 1: Operation Flowchart of the Family Takaful Plan. 06/02/09 2006 (C) Abdullaah
  18. 18. Chart 2: General Takaful Operation Flowchart 06/02/09 2006 (C) Abdullaah
  19. 19. Takaful vs Insurance 06/02/09 2006 (C) Abdullaah
  20. 20. Takaful vice versa Islamic Insurance 06/02/09 2006 (C) Abdullaah
  21. 21. Takaful Act 1984 06/02/09 2006 (C) Abdullaah
  22. 22. 06/02/09 2006 (C) Abdullaah
  23. 23. 06/02/09 2006 (C) Abdullaah
  24. 24. 06/02/09 2006 (C) Abdullaah
  25. 25. 06/02/09 2006 (C) Abdullaah
  26. 26. 06/02/09 2006 (C) Abdullaah
  27. 27. 06/02/09 2006 (C) Abdullaah
  28. 28. 06/02/09 2006 (C) Abdullaah
  29. 29. 06/02/09 2006 (C) Abdullaah
  30. 30. 06/02/09 2006 (C) Abdullaah شكرا جزيلا على حضوركم وحسن استماعكم إلى هذه المحاضرة المتواضعة Q & A Session These slides only cover the main issues of the topic. The students are required to refer to the recommended references for more details.