Takaful guidline

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MANAGEMENT OF TAKAFUL FUND OPERATIONS

Takaful Product Design and Pricing

pooling of contribution by participants for the purpose of meeting claims arising from a pre-agreed event, sufficient amount of contributions must be allocated to the takaful funds

shall ensure adequate tabarru‟ allocation into the PRF to cover risks and obligations associated with the takaful contract

shall exercise diligence in product design and ensure that the products offered include adequate takaful coverage and, are suitable and appropriate to the targeted market segment.

prudence must be maintained to avoid under pricing and balanced with due care to avoid participants from being charged excessively

Retakaful

Retakaful arrangement must be consistent with the interests of the takaful funds

Shall not accept inward reinsurance from insurance or reinsurance where risk and agreement bound to Shariah Compliance

Shall not cede out risks to insurance or reinsurance companies unless in cases where it is unavoidable

A retakaful arrangement with existing takaful or retakaful operator.

No existing takaful or retakaful operator that has the capacoty or expertise yo accept a particular risk

There is no existing takaful or retakaful operator that accepts a particular risk

Claims Management

appropriate systems & controls

Investment of Takaful Funds

The investment must be in line with Shariah requirements and participants' expectations

Investment strategy consideration

Tolerance of risks' fund

Amount and timing of takaful liabilities

Currency

Term

Nature

Valuation of Liabilities

Set appropriate & adequate provisions

MANAGEMENT OF SURPLUS

Recommended for Distribution

Refrain from recommending surplus distribution

Assess the strength of the takaful funds

Surplus Distribution

Shall only be made subject

Shall not cause adverse financial implication

Shall be determined and distibuted

Shall be in line with surplus management policy

Shall be recommended by Actuary

TO required to establish written policy approved by Shariah Comitte

Underwriting of Takaful Risks

Underwriting activities must be consistent wiyh yhe underwriting capacity of the takaful operator

Takaful operator

Shall ensure that the officers responsible for underwriting function fully understand policies

Must responsible to objectively evaluate and assess the underwriting risks

Shall ensure viability of takaful fund in long run.

shall manage the underwriting process effectively to avoid anti election