Legal & Regulatory Framework in Takaful Business by Mortuza

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TAKAFUL AS AN ALTERNATE SYSTEM OF

CONVENTIONAL INSURANCE IS BASED ON THE

CONCEPT OF BROTHERHOOD SOLIDARITY &

TRUSTEESHIP. 

               TAKAFUL

BROTHERHOOD   SOLIDARITY   TRUSTEESHIP


TAKAFUL IS BASICALLY A CONTRACT OF

COOPERATION BETWEEN AN INDIVIDUAL OR

ORGANIZATION & THE POOL OF PARTICIPANTS.

THERE ARE SEVERAL FORMS OF CONTRACT THAT

GOVERN RELATIONSHIP BETWEEN THE

PARTICIPANTS AND THE OPERATORS.


HOW TAKAFUL SCHEME OPERATES ? 

             REGULATOR

     BOARD                   S.S.B

              OPERATOR

 BROTHERHOOD SOLIDARITY FUND  TRUSTEESHIP

             PARTICIPANTS


 RISK SHARING PROGRAMME FOR THE WELL BEING OF 

THE COMMUNITY

 SHARIAH GUIDELINES MUST BE FOLLOWED IN 

TAKAFUL OPERATION

 TAKAFUL OPERATORS BE REWARDED FOR THE 

 SERVICES THEY RENDER

 THERE ARE SEVERAL MODELS OF TAKAFUL 

OPERATION WITHIN SHARIAH FRAME WORK.


 TWO SEPARATE FUNDS NEED TO BE ESTBLISHED

 ASSETS NEED TO BE INVESTED AS PER SHARIAH 

 FRAME WORK

 DISTRIBUTION OF SURPLUS NEED TO BE SPECIFIED

 CAPITAL ADEQUACY NEED TO BE ASSESSED TO 

 MEASURE ABILITY FOR PROVIDING INTEREST FREE

 LOAN

 GUIDELINES BE FRAMED FOR WINDOW OPERATORS


 FITNESS AND RESPONSIBILITIES OF SHARIAH 

  MEMBERS NEED TO BE DEFINED

 GUIDE LINES NEED TO BE PROVIDED FOR SHARIAH 

 AUDIT.

 DISCLOSURES TO PARTICIPANTS IS FORMIDABLE 

 PART OF TAKAFUL CONTRACT. THIS NEEDS SPECIFIC

 STANDARD GUIDELINES.

 PARAMETERS AND MODUS OPERANDI OF DIFFERENT 

MODELS NEED TO BE DETERMINED.


 TO ENSURE FAIRNESS AND TRANSPARENCY OF 

TAKAFUL OPERATIONS.

 TO ENSURE PARTICIPANTS LEGITIMATE INTERESTS.

 TO PROTECT OPERATORS FROM MISMANAGEMENT 

 AND INSOLVENCY.

 TO ENSURE THAT PEOPLES CONFIDENCE ON TAKAFUL 

IS NOT SHAKEN.

 TO ENSURE STABILITY AND ORDERLY GROWTH OF 

TAKAFUL MARKET AND THE ECONOMY.



GOVERNMENT         ACT & RULES

 REGULATOR        REGULATIONS

MARKET PLAYERS BALANCED COMPETITION

INTERMEDIARIES LICENSING & TRAINING 

 PARTICIPANTS  CONSUMER PROTICTION


1. WHO SHOULD REGULATE?

2. WHO SHOULD BE PERMITTED TO OPERATE?

3. WHAT APPROACH SHOULD GOVERN SOLVENCY 

  REGULATION?

4. WHAT STEPS NEED TO BE TAKEN WHEN 

  OPERATORS ARE IN FINANCIAL DIFFICULTY?

5. WHAT PROTECTIONS TO BE AFFORDED TO 

  PARTICIPANTS OF INSOLVENT OPERATORS?


1. REGULATE PROMOTE & ENSURE GROWTH.

2. PROMOTE & DEVELOP PROFESSIONARISM .

3. REGULATE INVESTMENT OF FUNDS & FIX 

  MARGIN OF SOLVENCY.

4. PROTECT INTERSTS OF POLICY HOLDERS AND 

  OTHER STAKEHOLDERS.

5. MONITOR PERFORMANCE OF RETAKAFUL 

  OPERATORS.


6. ENSURE STANDARDS OF ACCOUNTING & 

  TRANSPARENCY OF BALANCE SHEETS.

7. PRESCRIBE CEILING FOR MANAGEMENT 

  EXPENSES & SALE COST.

8. SET PROCEDURE FOR GRANTING REGISTRATION, 

  CONVERSION, MERGER ACQUISITION & WINDOW

  OPERATORS.

9. ADOPT CAPITAL ADEQUECY PRINCIPLES.

10. DETERMINE ITS ROLE IN RELATION TO 

   SHARIAH COMPLIANCE.



                   CORPORATE OFFICE

Raj Bhaban (6th Floor), Dilkusha C/A, Dhaka-1000, Bangladesh.

Tel : 88-02-9554538, 7160074, 9560889. Fax : 88-02-9564390

E-mail : [email protected], Web : www.primeislamilifebd.com

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