Abstract: This paper aims to bring to attention of the future challenge of Islamic insurance (Takaful) in Malaysia. Malaysian takaful industry has experienced rapid growth and transformation since it was first introduced 20 years ago. From an industry that has only one takaful operator with limited basic products, it is now growing to be a viable industry that has been integrated into the mainstream the financial system. This had been achieved through the intensive efforts of the Bank and takaful operators in developing the industry dynamic, resilient and efficient.
Keywords: Takaful, Future Challenger, Islamic Insurance, Etiqa Takaful Berhad.
Title: Future Challenges of Islamic Insurance (Takaful) in Malaysia
Author: Shahrul Akmal Shah Minan, Sharulnizam Jaafar, Shamsul Anuar Mohamed, Nadhir Zamziba
ISSN 2349-7807
International Journal of Recent Research in Commerce Economics and Management (IJRRCEM)
Paper Publications
Unit Trust of India (UTI) was created by the UTI Act passed by the Indian Parliament in 1964. Its main functions are to encourage savings, sell units to investors, convert small savings into industrial finance, and provide investors an opportunity to benefit from India's industrialization. UTI was established in four phases from 1964 to the present, seeing the entry of public sector funds in 1987, private sector funds in 1993, and its bifurcation into two separate entities in 2003.
This document provides a history of the insurance sector in India. It discusses key milestones such as the establishment of the first insurance companies in the 18th and 19th centuries. The sector was nationalized in 1956 and 1972. Reforms began in 1991 with the Malhotra Committee report, leading to the passage of the Insurance Regulatory and Development Authority Act in 1999, which opened the sector to private companies. Today there are 29 insurance companies operating, with both public and private sector players competing in the growing market. However, public sector companies still dominate with over 70% market share.
The document provides an introduction and overview of the mutual fund industry in India. It discusses that mutual funds allow small investors access to a well-diversified portfolio through a single investment. The mutual fund industry in India began with the establishment of UTI in 1964 and has since grown significantly. It discusses the four phases of growth of the industry, from UTI's initial monopoly to the entry of public sector and private sector funds. It provides statistics on the growth of assets under management over time and discusses the key regulations and structure of the industry.
A Project Report on - FINANCIAL PERFORMANCE OF LIC AND PRIVATE SECTOR LIFE...Karteek Chedadeepu
FINANCIAL PERFORMANCE OF LIC AND PRIVATE SECTOR LIFE INSURANCE COMPANIES IN INDIA
- A COMPARATIVE ANALYSIS USING CARAMEL MODEL..
This is my project report. I did my project on the financial performance of private and public sector of Life insurance companies India by using CARAMEL model.
MYANMAR BUSINESS CONGLOMERATE COMPANY AND RETAIL COMPANY LIST 2017MYO AUNG Myanmar
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Analysis of Islamic Financial System in the Global Market: And Entry in Indiaiosrjce
The document provides an analysis of the Islamic financial system in the global market and its potential entry into India. Some key points:
- Islamic finance has grown rapidly in recent years and become systematically important in Asia and the Middle East, while global issuance of sukuk (Islamic bonds) is expanding internationally.
- The IMF states the sector could facilitate financial inclusion and access to financing for small/medium enterprises and infrastructure projects, helping spur economic development.
- However, countries need to adapt regulatory frameworks to Islamic finance specifics and develop Islamic markets/instruments to realize its potential and safeguard stability.
The document discusses foreign direct investment (FDI) in India's insurance sector. It provides background on the history and development of insurance in India. Key points:
- Currently, FDI in insurance is capped at 26% but the government proposes raising this to 49% to increase capital in the growing private insurance sector.
- Since opening to private companies in 2000, the insurance sector has seen significant growth, though public sector companies still dominate.
- Private life insurers have increased their market share over time through innovative products, but public insurer LIC still has the largest share at around 65%.
- Raising the FDI limit is expected to further boost capital availability and competition in insurance, supporting the
Kurnia Asia Berhad was incorporated in Malaysia in 2001 and is the holding company for Kurnia Insurans (Malaysia) Berhad, the largest general insurer in Malaysia. Kurnia Insurans was incorporated in 1978 and has grown to become one of the most successful general insurers in the country, offering products like motor, medical, personal accident, and home insurance. Kurnia Asia aims to be a leading financial services group in ASEAN through its vision, mission, and values of knowledge, unity, nobility, resourcefulness, innovativeness, and ability.
Unit Trust of India (UTI) was created by the UTI Act passed by the Indian Parliament in 1964. Its main functions are to encourage savings, sell units to investors, convert small savings into industrial finance, and provide investors an opportunity to benefit from India's industrialization. UTI was established in four phases from 1964 to the present, seeing the entry of public sector funds in 1987, private sector funds in 1993, and its bifurcation into two separate entities in 2003.
This document provides a history of the insurance sector in India. It discusses key milestones such as the establishment of the first insurance companies in the 18th and 19th centuries. The sector was nationalized in 1956 and 1972. Reforms began in 1991 with the Malhotra Committee report, leading to the passage of the Insurance Regulatory and Development Authority Act in 1999, which opened the sector to private companies. Today there are 29 insurance companies operating, with both public and private sector players competing in the growing market. However, public sector companies still dominate with over 70% market share.
The document provides an introduction and overview of the mutual fund industry in India. It discusses that mutual funds allow small investors access to a well-diversified portfolio through a single investment. The mutual fund industry in India began with the establishment of UTI in 1964 and has since grown significantly. It discusses the four phases of growth of the industry, from UTI's initial monopoly to the entry of public sector and private sector funds. It provides statistics on the growth of assets under management over time and discusses the key regulations and structure of the industry.
A Project Report on - FINANCIAL PERFORMANCE OF LIC AND PRIVATE SECTOR LIFE...Karteek Chedadeepu
FINANCIAL PERFORMANCE OF LIC AND PRIVATE SECTOR LIFE INSURANCE COMPANIES IN INDIA
- A COMPARATIVE ANALYSIS USING CARAMEL MODEL..
This is my project report. I did my project on the financial performance of private and public sector of Life insurance companies India by using CARAMEL model.
MYANMAR BUSINESS CONGLOMERATE COMPANY AND RETAIL COMPANY LIST 2017MYO AUNG Myanmar
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Analysis of Islamic Financial System in the Global Market: And Entry in Indiaiosrjce
The document provides an analysis of the Islamic financial system in the global market and its potential entry into India. Some key points:
- Islamic finance has grown rapidly in recent years and become systematically important in Asia and the Middle East, while global issuance of sukuk (Islamic bonds) is expanding internationally.
- The IMF states the sector could facilitate financial inclusion and access to financing for small/medium enterprises and infrastructure projects, helping spur economic development.
- However, countries need to adapt regulatory frameworks to Islamic finance specifics and develop Islamic markets/instruments to realize its potential and safeguard stability.
The document discusses foreign direct investment (FDI) in India's insurance sector. It provides background on the history and development of insurance in India. Key points:
- Currently, FDI in insurance is capped at 26% but the government proposes raising this to 49% to increase capital in the growing private insurance sector.
- Since opening to private companies in 2000, the insurance sector has seen significant growth, though public sector companies still dominate.
- Private life insurers have increased their market share over time through innovative products, but public insurer LIC still has the largest share at around 65%.
- Raising the FDI limit is expected to further boost capital availability and competition in insurance, supporting the
Kurnia Asia Berhad was incorporated in Malaysia in 2001 and is the holding company for Kurnia Insurans (Malaysia) Berhad, the largest general insurer in Malaysia. Kurnia Insurans was incorporated in 1978 and has grown to become one of the most successful general insurers in the country, offering products like motor, medical, personal accident, and home insurance. Kurnia Asia aims to be a leading financial services group in ASEAN through its vision, mission, and values of knowledge, unity, nobility, resourcefulness, innovativeness, and ability.
Privatisation of life insurance sector in indiaiicecollege
This project is related to life insurance business in India. This study is mainly related to privatization of life insurance sector. LIC was monopoly in insurance sector till 2000.
The decision by IRDA to grant licences to private pledgers in life and non-life sector is expected to increase the insurance business in India. This is bound to board to force existing player to become more competitive thus the buyer can now expect better deals form its insurance agents.
The Securities and Exchange Board of India (SEBI) leads major investor education initiatives in India through the Investor Education and Protection Fund (IEPF). The IEPF promotes awareness through websites providing information on various investment topics, seminars, publications, and media campaigns. It also funds projects related to investor education and protection. SEBI works with the Ministry of Education to incorporate investor education into secondary school curriculums. The IEPF sponsors three websites and daily investor awareness seminars in major cities to educate investors on opportunities and responsibilities in the financial markets. It also produces and distributes various publications on investing.
Evolution of Entrepreneurship in PakistanRizwan Qamar
This document discusses top business families in Pakistan and provides details about some of the most influential families. It notes that economic development in Pakistan is a recent post-colonial phenomenon and entrepreneurship has led to both wealth creation and accumulation of wealth through unproductive means. Some of the top business groups mentioned include Saigal, Dewan, and Habib groups. The era of Ayub Khan in the 1950s gave incentives to local businessmen and led to the emergence of twenty-two families that came to dominate the economy. Nationalization under Bhutto impacted these families negatively but policies under Sharif and Musharraf benefited private businesses.
Mutual funds provide several key advantages for investors:
1) Portfolio diversification allows investors to hold a varied portfolio with a small amount of money.
2) Professional management means better returns than managing investments alone due to research and skills.
3) Risk is reduced through diversification as potential losses are shared among all investors in the fund.
A Study of DSA Network Expansion and Product Promotion Strategy of General...Anish Singh
A summer project of the insurance sector. that you rarely found.
In this project, u will get promotion strategy, how u sell the insurance and their ways. how to pitch agents and made for your company. thank you
UTI was formed in 1963 to mobilize retail savings and invest those savings in the capital market for the benefit of small investors. It was established with initial capital contributions from the Reserve Bank of India, public sector banks, LIC and other financial institutions. UTI's objectives were to encourage savings, provide an opportunity for investors to participate in India's industrial growth, and channelize savings into industrial finance. As an intermediary without share capital, UTI operates on principles of no profit/loss and serves unit holders across India by selling units, covering small savings, and providing liquidity to investors.
The Indian garment industry is an important sector that employs millions of people and accounts for a significant portion of India's GDP and exports. It has grown substantially over the years at 30% annually and is now one of the largest exporters of garments globally, though it faces competition from countries like Bangladesh and China. The industry relies on India's advantages like availability of raw materials and cheap labor but also faces challenges around technology, skills, and government policies.
The Present Situation of Insurance in India and Developments in Private Insur...Praveen Gupta
The last decade has been a slowly unfolding, occasionally frustrating but eventful period for the Indian insurance industry. The dominant theme throughout the 1990s was the liberalization agenda.
Internship Report on EFU life Assurance LtdArshad Abbasi
This document provides background information on EFU Life Assurance Ltd., including its history and operations. It discusses that EFU was the first insurance company in India owned by Muslims and after independence moved to Pakistan. In 1992, when Pakistan opened up the life insurance sector to private companies, EFU was reorganized as EFU Life Assurance Ltd., becoming the first private life insurance company in Pakistan. The document also outlines some key terms related to insurance.
The document discusses corporate culture in the insurance industry of Bangladesh. It provides background on insurance and the insurance market in Bangladesh. It describes the products and services offered by insurance companies, as well as problems faced by the industry such as centralization, poor economic conditions, and lack of qualified officials. The document concludes by outlining prospects for industry growth through expanding to new sectors and increasing awareness, while also suggesting actions like improving marketing, training personnel, and establishing more rural branches.
EFU Life Insurance is a leading private life insurance company in Pakistan. During the internship, the author worked in EFU's assurance department and learned about the functions performed across different departments. This included maintaining records, agreeing insurance contracts with customers, and selling life insurance products through various bank partnerships. The internship provided valuable experience in customer service, form filling, and insurance product sales and renewals.
This document provides an overview of mutual funds in India, including:
1. The history and evolution of mutual funds in India from the 1960s to present day, including the entry of public sector and private sector funds.
2. The types of mutual funds including aggressive, growth, balanced, and conservative funds.
3. How a mutual fund is organized and its basic workings, including net asset value and unit pricing.
4. The merits of investing in mutual funds such as diversification and professional management.
Success means achieving ultimate objectives, not every battle. The document discusses challenges in retaining and improving productivity of commission-based salespeople in the insurance industry. It analyzes factors affecting their productivity and whether companies should focus more on commission-based or full-time employees. The research found salespeople focus more on quantity over quality and long-term relationships. It suggests reducing training fees and implementing customer-centric policies to boost motivation and retention.
This document discusses the evolution of entrepreneurship and top business families in Pakistan. It traces the development of entrepreneurship from the 1950s during Ayub Khan's rule, which led to the rise of prominent business families. Some key business families mentioned include the Mansha, Habib, Saigal, Dewan, and Hashwani families. It also discusses some prominent women entrepreneurs like Uzma Gul, Ayesha Zeenat, and Robina Jamil who have started successful businesses in Pakistan despite challenges. The document outlines the history of entrepreneurship and policies in Pakistan that have impacted the business landscape.
Mian Muhammad Mansha is the richest man in Pakistan and chairman of the large conglomerate Nishat Group. He was born into a wealthy family in Lahore and began his career in Faisalabad founding Nishat Textiles. Over time, he expanded his business interests to include cement production, banking, automotive leasing, and infrastructure projects. Mansha has plans to use funds from his businesses to acquire banks in Indonesia and the Middle East and pursue major construction projects in Pakistan. He is one of the most influential people in the country due to his success and sits on the boards of 46 companies.
The document provides an introduction to financial markets in India and Marwadi Financial Services. It discusses the evolution of India's organized financial sector since 1960 to include banks, insurance companies, and mutual funds. It then introduces Marwadi Financial Services, a stock and commodity broking firm with over 33 branches and 300 employees that has been serving customers for over a decade. The document outlines Marwadi's services and provides an overview of its mission, vision, and growth over the years to become one of India's leading retail broking houses.
- Mutual funds pool money from many investors and invest it in stocks, bonds, and other securities. Each shareholder participates proportionally in the gains or losses of the fund.
- The modern mutual fund industry began in the United States in the 1920s and expanded significantly after regulations were put in place in the 1930s following the stock market crash.
- The Indian mutual fund industry began in 1963 with the formation of the Unit Trust of India. It has since grown to include public and private sector funds with regulation by SEBI.
The document discusses recent developments in the Indian real estate sector:
- Private equity funds are once again raising investments in Indian real estate, but this time seeking more control over projects.
- The real estate market has matured since 2005 and now faces more international competition for investment.
- The Modi government has restored confidence in India among international investors. Commercial office space leasing in major cities is growing.
Mian Muhammad Mansha is the richest man in Pakistan and chairman of the large conglomerate Nishat Group. He started his career in Faisalabad and founded Nishat Textiles, later expanding into other industries like cement and banking. Mansha has a net worth of $2.5 billion and is the highest individual taxpayer in Pakistan, having paid $100 billion in taxes. He has ambitious plans to acquire banks in other countries and invest in infrastructure projects in Pakistan like power plants and ports. Mansha sits on the boards of 46 companies and has received prestigious awards for his contributions as one of Pakistan's most influential industrialists.
Fundamental of Islamic Banking - Framework of Islamic Financial SystemMahyuddin Khalid
This document provides an overview of the development of Islamic banking and finance in Malaysia. It discusses the historical milestones and stages of development of Islamic banking, takaful (Islamic insurance), the Islamic capital market, and the roles of the Shariah Advisory Council and Labuan International Offshore Financial Centre in developing the Islamic financial system. The framework established in Malaysia has served as a model for the development of comprehensive Islamic financial systems internationally.
The takaful market has become more diverse with a tremendous increase in the
number of takaful operators worldwide. In overall, the growth of takaful has been
consistently increasing since 2010. Nevertheless, there is a slight difference between
family takaful and general takaful growth, unfavorably the family takaful. Thus, this
research is carried out to examine the significant factors influencing the choice of
family takaful among its participants. For that purpose, one takaful operator has been
sampled out. The findings relate to three contributing factors to the demand of family
takaful products; benefits, product features and quality services. Based on the
findings, takaful operator should focus in improving the takaful agents’ knowledge
Privatisation of life insurance sector in indiaiicecollege
This project is related to life insurance business in India. This study is mainly related to privatization of life insurance sector. LIC was monopoly in insurance sector till 2000.
The decision by IRDA to grant licences to private pledgers in life and non-life sector is expected to increase the insurance business in India. This is bound to board to force existing player to become more competitive thus the buyer can now expect better deals form its insurance agents.
The Securities and Exchange Board of India (SEBI) leads major investor education initiatives in India through the Investor Education and Protection Fund (IEPF). The IEPF promotes awareness through websites providing information on various investment topics, seminars, publications, and media campaigns. It also funds projects related to investor education and protection. SEBI works with the Ministry of Education to incorporate investor education into secondary school curriculums. The IEPF sponsors three websites and daily investor awareness seminars in major cities to educate investors on opportunities and responsibilities in the financial markets. It also produces and distributes various publications on investing.
Evolution of Entrepreneurship in PakistanRizwan Qamar
This document discusses top business families in Pakistan and provides details about some of the most influential families. It notes that economic development in Pakistan is a recent post-colonial phenomenon and entrepreneurship has led to both wealth creation and accumulation of wealth through unproductive means. Some of the top business groups mentioned include Saigal, Dewan, and Habib groups. The era of Ayub Khan in the 1950s gave incentives to local businessmen and led to the emergence of twenty-two families that came to dominate the economy. Nationalization under Bhutto impacted these families negatively but policies under Sharif and Musharraf benefited private businesses.
Mutual funds provide several key advantages for investors:
1) Portfolio diversification allows investors to hold a varied portfolio with a small amount of money.
2) Professional management means better returns than managing investments alone due to research and skills.
3) Risk is reduced through diversification as potential losses are shared among all investors in the fund.
A Study of DSA Network Expansion and Product Promotion Strategy of General...Anish Singh
A summer project of the insurance sector. that you rarely found.
In this project, u will get promotion strategy, how u sell the insurance and their ways. how to pitch agents and made for your company. thank you
UTI was formed in 1963 to mobilize retail savings and invest those savings in the capital market for the benefit of small investors. It was established with initial capital contributions from the Reserve Bank of India, public sector banks, LIC and other financial institutions. UTI's objectives were to encourage savings, provide an opportunity for investors to participate in India's industrial growth, and channelize savings into industrial finance. As an intermediary without share capital, UTI operates on principles of no profit/loss and serves unit holders across India by selling units, covering small savings, and providing liquidity to investors.
The Indian garment industry is an important sector that employs millions of people and accounts for a significant portion of India's GDP and exports. It has grown substantially over the years at 30% annually and is now one of the largest exporters of garments globally, though it faces competition from countries like Bangladesh and China. The industry relies on India's advantages like availability of raw materials and cheap labor but also faces challenges around technology, skills, and government policies.
The Present Situation of Insurance in India and Developments in Private Insur...Praveen Gupta
The last decade has been a slowly unfolding, occasionally frustrating but eventful period for the Indian insurance industry. The dominant theme throughout the 1990s was the liberalization agenda.
Internship Report on EFU life Assurance LtdArshad Abbasi
This document provides background information on EFU Life Assurance Ltd., including its history and operations. It discusses that EFU was the first insurance company in India owned by Muslims and after independence moved to Pakistan. In 1992, when Pakistan opened up the life insurance sector to private companies, EFU was reorganized as EFU Life Assurance Ltd., becoming the first private life insurance company in Pakistan. The document also outlines some key terms related to insurance.
The document discusses corporate culture in the insurance industry of Bangladesh. It provides background on insurance and the insurance market in Bangladesh. It describes the products and services offered by insurance companies, as well as problems faced by the industry such as centralization, poor economic conditions, and lack of qualified officials. The document concludes by outlining prospects for industry growth through expanding to new sectors and increasing awareness, while also suggesting actions like improving marketing, training personnel, and establishing more rural branches.
EFU Life Insurance is a leading private life insurance company in Pakistan. During the internship, the author worked in EFU's assurance department and learned about the functions performed across different departments. This included maintaining records, agreeing insurance contracts with customers, and selling life insurance products through various bank partnerships. The internship provided valuable experience in customer service, form filling, and insurance product sales and renewals.
This document provides an overview of mutual funds in India, including:
1. The history and evolution of mutual funds in India from the 1960s to present day, including the entry of public sector and private sector funds.
2. The types of mutual funds including aggressive, growth, balanced, and conservative funds.
3. How a mutual fund is organized and its basic workings, including net asset value and unit pricing.
4. The merits of investing in mutual funds such as diversification and professional management.
Success means achieving ultimate objectives, not every battle. The document discusses challenges in retaining and improving productivity of commission-based salespeople in the insurance industry. It analyzes factors affecting their productivity and whether companies should focus more on commission-based or full-time employees. The research found salespeople focus more on quantity over quality and long-term relationships. It suggests reducing training fees and implementing customer-centric policies to boost motivation and retention.
This document discusses the evolution of entrepreneurship and top business families in Pakistan. It traces the development of entrepreneurship from the 1950s during Ayub Khan's rule, which led to the rise of prominent business families. Some key business families mentioned include the Mansha, Habib, Saigal, Dewan, and Hashwani families. It also discusses some prominent women entrepreneurs like Uzma Gul, Ayesha Zeenat, and Robina Jamil who have started successful businesses in Pakistan despite challenges. The document outlines the history of entrepreneurship and policies in Pakistan that have impacted the business landscape.
Mian Muhammad Mansha is the richest man in Pakistan and chairman of the large conglomerate Nishat Group. He was born into a wealthy family in Lahore and began his career in Faisalabad founding Nishat Textiles. Over time, he expanded his business interests to include cement production, banking, automotive leasing, and infrastructure projects. Mansha has plans to use funds from his businesses to acquire banks in Indonesia and the Middle East and pursue major construction projects in Pakistan. He is one of the most influential people in the country due to his success and sits on the boards of 46 companies.
The document provides an introduction to financial markets in India and Marwadi Financial Services. It discusses the evolution of India's organized financial sector since 1960 to include banks, insurance companies, and mutual funds. It then introduces Marwadi Financial Services, a stock and commodity broking firm with over 33 branches and 300 employees that has been serving customers for over a decade. The document outlines Marwadi's services and provides an overview of its mission, vision, and growth over the years to become one of India's leading retail broking houses.
- Mutual funds pool money from many investors and invest it in stocks, bonds, and other securities. Each shareholder participates proportionally in the gains or losses of the fund.
- The modern mutual fund industry began in the United States in the 1920s and expanded significantly after regulations were put in place in the 1930s following the stock market crash.
- The Indian mutual fund industry began in 1963 with the formation of the Unit Trust of India. It has since grown to include public and private sector funds with regulation by SEBI.
The document discusses recent developments in the Indian real estate sector:
- Private equity funds are once again raising investments in Indian real estate, but this time seeking more control over projects.
- The real estate market has matured since 2005 and now faces more international competition for investment.
- The Modi government has restored confidence in India among international investors. Commercial office space leasing in major cities is growing.
Mian Muhammad Mansha is the richest man in Pakistan and chairman of the large conglomerate Nishat Group. He started his career in Faisalabad and founded Nishat Textiles, later expanding into other industries like cement and banking. Mansha has a net worth of $2.5 billion and is the highest individual taxpayer in Pakistan, having paid $100 billion in taxes. He has ambitious plans to acquire banks in other countries and invest in infrastructure projects in Pakistan like power plants and ports. Mansha sits on the boards of 46 companies and has received prestigious awards for his contributions as one of Pakistan's most influential industrialists.
Fundamental of Islamic Banking - Framework of Islamic Financial SystemMahyuddin Khalid
This document provides an overview of the development of Islamic banking and finance in Malaysia. It discusses the historical milestones and stages of development of Islamic banking, takaful (Islamic insurance), the Islamic capital market, and the roles of the Shariah Advisory Council and Labuan International Offshore Financial Centre in developing the Islamic financial system. The framework established in Malaysia has served as a model for the development of comprehensive Islamic financial systems internationally.
The takaful market has become more diverse with a tremendous increase in the
number of takaful operators worldwide. In overall, the growth of takaful has been
consistently increasing since 2010. Nevertheless, there is a slight difference between
family takaful and general takaful growth, unfavorably the family takaful. Thus, this
research is carried out to examine the significant factors influencing the choice of
family takaful among its participants. For that purpose, one takaful operator has been
sampled out. The findings relate to three contributing factors to the demand of family
takaful products; benefits, product features and quality services. Based on the
findings, takaful operator should focus in improving the takaful agents’ knowledge
Is islamic insurance substitute to conventional insuranceAli jili'ow
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Do you believe that Islamic insurance could be substitute to conventional insurance?
This document discusses the legal issues and challenges facing the takaful (Islamic insurance) industry in Malaysia. It provides background on the history and development of takaful in Malaysia, which began in the 1980s to provide Shariah-compliant alternatives to conventional insurance. The document outlines some of the main challenges facing the industry, including its regulatory framework, shortage of Shariah-compliant assets, and issues around the application of Islamic law versus civil law in judicial proceedings involving takaful cases. It notes that takaful cases are typically heard in civil courts rather than Shariah courts in Malaysia.
Framework of islamic financial system 2003amerkomeng
Islamic banking first began in Malaysia in 1983 with the establishment of the first Islamic bank. Since then, Islamic banking has grown significantly. By 2002, total Islamic banking assets made up 8.9% of total banking assets in Malaysia. Many conventional banks also began offering Islamic banking products and services. Regulations and oversight from Bank Negara Malaysia have helped develop and expand the Islamic banking sector to become a key part of Malaysia's dual banking system.
11.islamic banking a study of the relevant operating modes in current financi...Alexander Decker
This document summarizes the history and operating modes of Islamic banking. It discusses:
1) Islamic banking emerged in the 1960s/70s as an alternative to interest-based banking guided by Islamic principles. Currently there are over 300 Islamic banks worldwide.
2) The main operating modes of Islamic banking include profit and loss sharing (mudarabah), equity partnerships (musharakah), and fixed-return contracts like murabaha (cost-plus sale).
3) Murabaha contract allows banks to purchase goods for clients and sell them at a markup, functioning as a financing mechanism while avoiding interest. It has become widely used in practice.
Islamic banking a study of the relevant operating modes in current financial ...Alexander Decker
This document summarizes the history and operating modes of Islamic banking. It discusses:
1) Islamic banking emerged in the 1960s/70s as an alternative to interest-based banking guided by Islamic principles. Currently there are over 300 Islamic banks worldwide.
2) The main operating modes of Islamic banking include profit and loss sharing (mudarabah), equity partnerships (musharakah), and fixed-return contracts like murabaha (cost-plus sale).
3) Murabaha contract allows banks to purchase goods for clients and sell them at a markup, functioning as a financing mechanism while avoiding interest. It has become widely used in practice.
11.islamic banking a study of the relevant operating modes in current financi...Alexander Decker
This document summarizes the history and development of Islamic banking. It discusses how Islamic banking emerged in the 1970s as an alternative to interest-based banking that is compliant with Sharia law. The document outlines the objectives of Islamic banking such as facilitating trade and investment in a manner that shares profits and losses. It also discusses the early scholars who proposed the concept of Islamic banking and the first Islamic banks that were established in the 1970s and 1980s in several Muslim-majority countries and regions. International organizations like the Islamic Development Bank and conferences have further advanced the study and practice of Islamic banking globally.
MALAYSIA INTERNATIONAL ISLAMIC FINANCIAL CENTRENATASHYA AYUNIE
The MIFC Executive Committee oversees the implementation of Malaysia's Islamic financial initiatives. Chaired by the Governor of Bank Negara Malaysia, the committee comprises officials from government agencies and regulators who work to promote Malaysia as a global Islamic finance center. The MIFC initiative was launched in 2006 and is supported by key Malaysian financial authorities and private sector partners to develop Islamic banking, takaful, sukuk issuance, and professional services in the country.
Securities Commission and Capital Market Malaysiataha2003
The document summarizes the history and development of securities regulation and capital markets in Malaysia. It discusses the following key points:
1) The Securities Commission (SC) was officially established in 1993 to oversee securities regulation, streamlining laws that were previously governed by other agencies.
2) Capital markets provide a marketplace for buying and selling stocks, bonds, and other debt instruments, supplying significant funds for economic development.
3) Malaysia's capital markets and Islamic capital market have grown substantially, with the ICM reaching $466 billion in assets in 2013, driven by regulatory reforms and economic growth.
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This document discusses the development of Islamic banking laws in Malaysia over time. It begins with the establishment of the first Islamic bank, Bank Islam Malaysia Berhad (BIMB) in 1983 under the Islamic Bank Act. This helped launch the Islamic banking industry in Malaysia. The banking system has grown to include Islamic windows within conventional banks and new foreign Islamic banks. The laws and regulations governing Islamic banking have also evolved, with the goal of establishing Malaysia as a leading international Islamic financial center.
Al Barakah Multi-purpose Co-operative Society Limited (Al Barakah MCSL) in Mauritius was established in 1998 to provide Islamic financial services to the local Muslim community as an alternative to conventional interest-based institutions. Run as a cooperative in accordance with Islamic finance principles and Mauritian law, Al Barakah MCSL offers financing products based on murabahah and other Shariah-compliant contracts as well as savings, social, and educational services. Over 10 years of operation, Al Barakah MCSL has helped establish Islamic finance in Mauritius and demonstrated the potential for cooperatives to integrate Shariah principles while meeting community needs.
Running head ISLAMIC BANKING AND FINANCE 1ISLAMIC BANKING AND.docxwlynn1
Running head: ISLAMIC BANKING AND FINANCE 1
ISLAMIC BANKING AND FINANCE 22
Islamic Banking and Finance
Tuleen Basrawi
1310186
BNFN 4302
Instructor: Mr. Masood Aijazi
Thursday, December 6, 2018
Abstract
Everybody values own properties and life. This value inspires protection from loss and to avoid risks by all ways and measures. The examples of events which people are vulnerable to are theft, accidents, deaths, hurricanes, and fire. Insurance was therefore, invented to indemnify a member from a loss. Insurance is a not a new concept per se. The ancient Arabic trade caravans would contribute funds to help a member from loss due to robberies or any disaster on their way to Asia. The Chinese are also great insurance icons. 5000 years ago, Chinese families tied together houses to prevent drowning and to share risks as their houses were on floating water. In ancient Rome, the survivors of a military member who died were compensated by being offered some money as assistance. The other pioneers of insurance are Rhodes who formed the first law on loss in relation to cargo transportation via sea, the Phoenicians, and Lombardians. Insurance is therefore, a tool that helps to control such risks. Modern insurance is traced to 1977 when academicians from Saudi Arabia tried to resolve takaful as cooperative insurance, leading to the formation of the first insurance company in 1979. Generally, Islam allows risk management concept. However, it enhances risk management under certain conditions such as not making profit at others expenses. The initiatives to solve risk problem in ways that comply with sharia have led to Takaful emergence. In this perceptive, the purpose of this research paper is to tackle the concept of Takaful insurance. It is an interesting topic worth studying in that its formation reflects Islam religion. Islamic banking and finance will first be looked into before narrowing down to takaful insurance. Islamic banking sets the foundation for Takaful insurance.
Table of Contents
Abstract 2
Introduction 4
Islamic banking and finance overview 4
Takaful definition 5
Takaful principles 7
Takaful insurance model 8
Takaful features 9
Takaful and conventional insurance 9
Variations between Takaful and conventional insurance 10
Takaful development 11
Takaful milestones 12
Takaful models 12
Mudarabah model 12
Wakalah model 13
Wakalah / Mudarabah hybrid 15
wakalah with Waqf 17
Takaful products 18
Family Takaful 18
Family takaful types 19
General Takaful 19
Retakaful and reinsurance 20
Conclusion and recommendations 21
References 23
Introduction
It is obvious that human activities are prone to loss risk from unexpected circumstances. Insurance has been there for several years back to indemnify the individuals from losses. Insurance concept has been exercised in different places for several years. During those days, trade caravans who encountered risks were the same as those faced presently in trading activities were there. T.
This document discusses the history and development of Takaful (Islamic insurance) globally and in Pakistan. It provides the following key points:
1. Takaful first emerged in the 1970s as an alternative to conventional insurance that is compliant with Islamic principles. The first Takaful company was established in Sudan in 1979.
2. Takaful gained regulatory recognition and support in the late 1980s and 1990s in countries like Malaysia. Pakistan introduced regulations for Takaful in the 2000s and the first Takaful operators launched there in 2004-2007.
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This document provides an overview of the mutual funds industry in India. It discusses the development of mutual funds in India since 1964 when the Unit Trust of India (UTI) was established. It covers the various phases of growth of the industry, including the entry of public sector funds in 1987-1993, private funds in 1993-1996, increased regulation by SEBI in 1996-1999, and continued consolidation and growth from 1999 onwards. It also provides definitions of key terms like mutual fund and discusses the typical organization structure of mutual funds including sponsors, trustees, asset management companies (AMCs), custodians etc. Overall, the document traces the history and evolution of mutual funds in India over the past several decades.
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Future Challenges of Islamic Insurance (Takaful) in Malaysia
1. ISSN 2349-7807
International Journal of Recent Research in Commerce Economics and Management (IJRRCEM)
Vol. 4, Issue 2, pp: (87-91), Month: April - June 2017, Available at: www.paperpublications.org
Page | 87
Paper Publications
Future Challenges of Islamic Insurance
(Takaful) in Malaysia
1
Shahrul Akmal Shah Minan, 2
Sharulnizam Jaafar, 3
Shamsul Anuar Mohamed,
4
Nadhir Zamziba
B.Sc, MBA1
, B.Sc, MBA2
, B.Sc. Acc, MBA3
, B.Acc, MBA4
Faculty of Management and Information Technology, Sultan Azlan Shah University, Kuala Kangsar, Perak, Malaysia
Abstract: This paper aims to bring to attention of the future challenge of Islamic insurance (Takaful) in Malaysia.
Malaysian takaful industry has experienced rapid growth and transformation since it was first introduced 20 years
ago. From an industry that has only one takaful operator with limited basic products, it is now growing to be a
viable industry that has been integrated into the mainstream the financial system. This had been achieved through
the intensive efforts of the Bank and takaful operators in developing the industry dynamic, resilient and efficient.
Keywords: Takaful, Future Challenger, Islamic Insurance, Etiqa Takaful Berhad.
1. INTRODUCTION
Insurance has existed for many centuries. Some historians trace the origin of insurance to 215 CE, when the Roman
government was required by military supplies to accept all risks arising from enemy attacks, storms, and other natural
disaster for supplies carried on their ships (Omar Fisher, 2009). In other words, there is a need for human to prepare for
the loss. The modern insurance can be traced its beginning on the 1600’s, when British merchants and ship owners began
to meet a coffeehouse near Lombard Street in London. The coffeehouse was called Llyod’s, there they made an
agreement to mutually share in the profits and losses of sea voyages (Omar Fisher, 2009). However, there is a need for
muslim to join and insured themselves in islamic way. As the result, emerged the first Islamic insurance in Sudan in 1979.
Islamic insurance or takaful is a concept of mutual cooperation to guarantee mutual protection of the members (Mortuza
Ali, 2006). Takaful is derived from the Arabic word “kafalah”, which is a pact that guarantees individuals in a group
against loss or damage sustained by anyone of them (Mohamad Salihudin Ahmad, ICMIF). The development of takaful in
modern times was initially undertaken in Sudan in 1979 and Malaysia in 1984. As the result of the 1985 fiqh Academy,
ruling declaring that conventional insurance was haram (forbidden), while insurance based on cooperative principles,
sharia compliance, and charitable donations are acceptable. The birth of takaful industry in Malaysia was shown by
Takaful Act 1984 in November 1984.
Takaful Definitions: The word Takaful is derived from the Arabic verb "kafala" which simply means to take care of one's
need. Therefore, the pact between at least two parties agreeing to jointly guarantee one another in the event of a loss, as a
consequent of being afflicted by a calamity defines the term "Takaful". Likewise, the joint-guarantee as embedded in the
concept of Takaful can be translated into practical operation in the form of business or commercial transaction within the
"t'ijari" or private sector as one of the Islamic financial players in a market economy.
First World Fatwa Council was convened in Cairo, Egypt in 1960 alone to discuss regarding Insurance / Conventional.
The unanimous decision is ILLEGAL for being involved with three elements, namely: -
2. ISSN 2349-7807
International Journal of Recent Research in Commerce Economics and Management (IJRRCEM)
Vol. 4, Issue 2, pp: (87-91), Month: April - June 2017, Available at: www.paperpublications.org
Page | 88
Paper Publications
i. Gharar.
ii. Maisir.
iii. Riba.
Second World Fatwa Council convenes again in Mecca, Saudi Arabia in 1965 and the results remain the same. On June
16, 1972, The World Fatwa Council of the 5th, was convened in Kuala Lumpur to discuss the same issue. STILL LIFE
INSURANCE formula is very.
The Malaysian government is trying to implement Islamic values in the administration and important affairs of Muslims.
Therefore, the government has been increasing Islamic instruments such as Bank Islam and Bank Muamalat (Islamic
Banking), Islamic pawn and the most important is Islamic insurance (Takaful).
Then, the Malaysian Government has established the Takaful Act 1984, in which the National Bank ordered the Bank to
create a company known as Takaful with Syarikat Takaful Malaysia Sdn Bhd in 1984 by using system tables / counters.
The goal of the government to all Muslims sheltering under Takaful lacklustre. Therefore, there is the urge to create
another Takaful system 'wakallah' @ Representative. YPEIM come to meet with Bank Islam but Islamic Bank own
Takaful Company. Then YPEIM submit this proposal to the Tabung Haji, also not interested. Similarly, the Bank
(Malaysia). Therefore, YPEIM approached a wholly owned Bumiputera company which Saham Nasional Berhad (PNB)
to obtain initial capital of 35 million to qualify for the establishment of the National Bank Takaful. PNB interested then
directs its subsidiary, MNI Holdings to manufacture such capital.
On October 15, 1993, MNI Takaful Sdn Bhd has triggered a capital partnership YPEIM MNI 80% and 20%. On
December 8, 1998, MNI Takaful Sdn Bhd was renamed the Takaful Nasional Sdn Bhd with the management and
administration of the new. On 15 November 2007, Takaful Nasional Sdn Bhd has changed its name to Etiqa Takaful with
new management and administration (Maybank).
Takaful Nasional Sdn Berhad - a provider of products and services Takaful Malaysia's premier, was established on June 7,
1993 as MNI Takaful with an authorized capital of RM50 million and paid up capital of RM25 juta. Establishment this is
the result of cooperation between Malaysia National Insurance Berhad (MNIB) and the Malaysian Islamic Economic
Development Foundation and in 1998, in a rebranding effort, MNI Takaful has turned to the Takaful Nasional Sdn Bhd
(TN) until now.
On December 15, 2005, MNI and TN was taken over by the Group and is currently a member of the group Mayban Fortis
Holdings Berhad.Presently 1999, the results of which are shown outstanding performance and great support from our
customers, the authorized capital of the TN has increased to RM500 million and paid-up capital to RM35 million. In
2004, in a move to become more competitive, paid-up capital of the Company was increased to RM100 million.
2. TAKAFUL IN MALAYSIA : AN OVERVIEW
In June 15, 1972, an announcement on exploration and studies made on the conventional insurance contract where the
National Fatwa Council of Malaysia in its fifth conference has decided that life insurance as run by the insurance
companies that exist at the time was a muamalah fasid (broken / illegal) and not in accordance with the principle /
principles of Islam in terms akadnya because it contains elements gharar (uncertainty), gambling (gambling) and riba
(interest).
The scholars have agreed Takaful as a substitute for conventional insurance. Basic 'Tabarru be the core build Takaful axis.
The first Takaful operator in Malaysia was established in 1984. In line with the parliament passed Act 312, which was
named Act 1984.
Since the establishment of the first takaful company until now, the takaful industry has grown rapidly. According to
records of the Central Bank of Malaysia, there are 8 companies in 2016, including the Takaful Operator.
3. ISSN 2349-7807
International Journal of Recent Research in Commerce Economics and Management (IJRRCEM)
Vol. 4, Issue 2, pp: (87-91), Month: April - June 2017, Available at: www.paperpublications.org
Page | 89
Paper Publications
No. Name
1 Etiqa Takaful Berhad
2 HSBC Amanah Takaful (Malaysia) Berhad
3 Hong Leong MSIG Takaful Berhad
4 Prudential BSN Takaful Berhad
5 Sun Life Malaysia Takaful Berhad
6 Syarikat Takaful Malaysia Berhad
7 Takaful Ikhlas Berhad
8 Zurich Takaful Malaysia Berhad
In developing the takaful industry in Malaysia, Bank Negara Malaysia has adopted gradual approach which is divided into
three phases:
• Phase I (1984-1992) began with the drafting of regulatory laws that specifically Act 1984 and the establishment of the
first takaful operator in 1984. The main focus during this period was the provision of basic infrastructure for the industry.
Act still this use has been enacted to regulate the operation of takaful business and requires takaful operators registered. It
also provides for the establishment of the Committee for ensure that the takaful operator's business operations comply
with Shariah principles at all time.
• Phase II (1993-2000) the introduction of competition with the entry of another takaful operator. This period also saw
increased cooperation among operators Takaful in the region, including the establishment of the ASEAN Takaful Group
in 1995 and the establishment of the ASEAN International (L) Ltd. in 1997. This has facilitated setting retakaful
(reinsurance) among takaful operators in Malaysia and in region, namely Brunei, Indonesia and Singapore.
• Phase III (2001-2010) began with the introduction of the Financial Sector Masterplan (FSMP) in 2001 with the
objective, among others, to improve and strengthen the ability of takaful the legal framework, Shariah and regulatory. Part
FSMP related Islamic banking and takaful is a roadmap towards realizing Malaysia to become an international center for
Islamic finance. So far, this period has seen increased levels of growth and competition with the licenses of the three
operators new. To further promote the development of the takaful industry, Malaysian Takaful Association (PTM), an
association of takaful operators was established in 2002. PTM aims to improve the uniformity of industry self-regulatory
and market practices promoting cooperation on a higher level among takaful operators in order develop takaful industry.
Operating on a commercial basis takaful conducted in Malaysia had contributed significantly to the success of the
industry. This approach emphasizes the provision of return affordable to participants, takaful operators and shareholders.
It differs from the concept takaful cooperation in several other countries is carried out solely by the takaful scheme for
social purposes.
In addition, the role of government and its continued support in developing the industry Takaful is an important factor to
promote the growth of the Malaysian takaful industry. Kingdom has been able to create a conducive environment and
charting a clear course for the development of this industry.
3. IMPORTANT COMPONENTS OF THE ISLAMIC FINANCIAL SYSTEM
In developing the Islamic financial system, Malaysia take a comprehensive approach by providing equal emphasis on all
the core components of The overall Islamic financial system, Islamic banking namely, takaful and Islamic capital and
money markets. Development core components regularly create synergies, thereby provide a conducive environment for
system Islamic finance is mobilizing resources efficiently and provide financing for productive economic activity.
This allows takaful operators to keep pace with the conventional companies in providing competitive products, approved
by Shariah. Comprehensive structure also enhances the durability and robustness of the system Islamic finance to
withstand financial shocks and contribute towards improving the overall stability of the Islamic financial system in
Malaysia.
4. ISSN 2349-7807
International Journal of Recent Research in Commerce Economics and Management (IJRRCEM)
Vol. 4, Issue 2, pp: (87-91), Month: April - June 2017, Available at: www.paperpublications.org
Page | 90
Paper Publications
4. THE CATALYST TAKAFUL GLOBALLY
Globally, the Malaysian takaful operator has taken additional measures to promote and support the development of the
global takaful. Success encourages domestic and acceptance area of control takaful model has facilitated Malaysian
takaful operators start collaboration across sea through equity participation and management as well sharing of technical
knowledge and expertise.
In line with the spirit of international cooperation, Malaysia signed a Memorandum of Understanding (MoU) with Bank
Islamic Development to encourage investment among countries of the Organization of Islamic Conference (OIC),
including the development of takaful and retakaful. Below This MoU, Malaysia has agreed to lead an initiative to promote
the establishment and development of takaful and takaful industry re-takaful among OIC member countries.
Malaysia also took the initiative to help the group of Eight Developing Islamic Countries (D-8) to set up a company
takaful in member countries. To this end, Malaysia organized several seminars and workshops on takaful as part of efforts
to share experiences and expertise with member countries. To improve global takaful infrastructure, ASEAN International
(L) Ltd. has been identified as one of the means to add retakaful arrangements among takaful operators in member
countries.
5. CONCLUSION AND SUGGESTION
Despite the significant growth in the takaful industry in Malaysia, there still many challenges faced by takaful company,
as Malaysia Takaful Association (MTA) chairman Encik Zainudin Ishak explains to Islamic Finance news the takaful
market’s current and future outlooks, along with some of the challenges in the unique segment faces in Malaysia.
The family takaful business in Malaysia is coming from the urban market and middle income group, but looking at the
Muslim demography, the main market segment is the rural areas. Therefore, one challenge for MTA is to develop and
enhance micro takaful to provide for the needs of the rural market. Another challenge faced by the industry of takaful is
the lack of knowledgeable and qualified people in the industry. Even though the educational structure in Malaysia has
supportedthe development of Islamic finance, the challenge now is to persuade those who has thecapability to join the
takaful industry. The re-takaful industry needs a number of takaful operators to operate effectively. In Malaysia case,
several operators do not include the re-takaful members although there some major operators have joined to become
member. Here is the challenges for the industry to be overcome; convincing these few Malaysian operators which are still
using the conventional capacity. At last, product features innovations are also seen to be the future challenges for the
takaful industry. To attract more customers, especially non-Muslim customers, the takaful industry has to come up with
innovative product features which based on shariah principle.
Finally, Introducing takaful system is as an alternative to the conventional insurance. Asconventional insurance contradict
the shariah due to elements of Gharar (excessive uncertainty), Riba (interest), and Maysir (gambling). Clearly, the
application of the takaful system has avoided those elements and provide a transparency as well as fair contract.
As an industry, Malaysia has more experience in developing the takaful. One advantage that make takaful industry
Malaysia to grow successfully is the involvement of the Bank Negara Malaysia (the central bank of Malaysia) to provide
a separate regulatory body, exclusively responsible for the regulation and monitoring the takaful industry. It remarkable
grow has reach a 30 per cent growth during the past few years. However, there still many challenges in the future for the
takaful industry to grow nationally and internationally. And future research focused on those challenges would help for
the best performance of Islamic insurance.
REFERENCES
[1] Ahmad M. S. (2007). Takaful in SouthEast Asia: The growing pains and challenges? KualaLumpur, Malaysia:
ICMIF Takaful.
[2] Ali, K. M. M. (2006). Basis And Models of Takaful: The need for Ijtihad. ICMIF Takaful.
[3] Ali, K. M. M. Introduction to Islamic Insurance. Dhaka.
[4] Ali, K. M. M. Present Scenario and Future Potentials of Takaful.
5. ISSN 2349-7807
International Journal of Recent Research in Commerce Economics and Management (IJRRCEM)
Vol. 4, Issue 2, pp: (87-91), Month: April - June 2017, Available at: www.paperpublications.org
Page | 91
Paper Publications
[5] Aziz, F. A., & Lian, T. K. (2006). NTUC Income’s Experience in Developing Takaful Insurance.Kuala Lumpur,
Malaysia: ICMIF Takaful.
[6] Bakarudin, I. (2007). Establishing A Robust Legal and Regulatory Framework For Takaful.Financial Regulators
Forum in Islamic Finance, 29 March.
[7] Billah, M. M., & Patel, S. (2003). An Opportunity for ICMIF members to provide Islamicinsurance (Takaful)
products. Kuala Lumpur, Malaysia: ICMIF Takaful.
[8] Dingwall, S., & Griffiths, F. (2006). The United Kingdom: Regulatory approach to takaful.Kuala Lumpur, Malaysia:
ICMIF Takaful.
[9] Fisher, O. (2009). Historical Review, Importance, and an Introduction to insurable Risk. In A.R.Yousri Ahmed
(Ed).Principles of Takaful.Manama, Kingdom of Bahrain: BIBF, 11-26.
[10] http://www.bnm.gov.my/
[11] http://www.malaysiantakaful.com.my/