Index
7Ps 301–2 agency 319 marketing mix for Takaful 303–4 Wakalah 47–8, 64, 304 agents 3, 15, 21, 23, 75 Abduh, Muhammad 7, 59, 194 licensing to market Takaful products absolute beneficiary versus trustee 15, 179–80 24–5, 75, 211–19, 237–8, 251, payments in life insurance 238, 251 252 regulatory framework 76–8 absolute power of Allah 317 alcohol, sanction against 317 Abu Ishaq, blessing of 31 Ali, M.M. 37, 40 acceptance Allah conventional insurance 152–3 absolute power of 317 Qabul 143, 145, 147–8 attributes of 319 accidental death, see quantum of death determined by 68, 317–18 damages putting trust in 68, 71, 241, 245, 251, accountability 299, 320–21 317, 324 accounting 338 will of 69, 240 issues for Takaful institutions allies (Hilf) 28 307–10 of al-Ahlaf 28 treatment for recognition of income of al-Fidul 29 and expenses for operators of al-Mutaibin 28 200–201 Allis-Chakners Co. v. Fidelity and Accounting and Auditing Organization Deposite Co. of Maryland 153 for Islamic Financial Institutions Amanah (trust) 18, 45, 215 (AAOIFI) 39, 263–5, 270–71, 291, ambiguity 345 297, 308 Amtul Habeeb vs. Musarrat Parveen accounts 338 218, 237 accrual basis accounting 200–201, ancient Arab tribes 4–5, 136 203–4 annulment of a policy 109, 167–8 Acts of Parliament 61 anti-selection 39 advisory Shari’ah task force, suggested ‘Aqd (principles of contract) 1, 20, 26, 277 42, 48, 62–3 Africa 262, 285 ‘Aqd Ta’min Muaqqat (issuance of age cover note) 145, 148–9 of a contract 20 ‘Aqilah (kinsmen or payees of blood impediment to taking out a policy money) 5–6, 29–30, 60, 70–71, 17, 88–90 136, 140, 248, 368 legal capacity 63, 157–60 Arab tribes 116 of majority 157–8, 160 ancient 4–5, 136 Rushd 20, 88, 89, 189–90 Arabesque Asset Management 313 of maturity 319 Asia 262, 285 of puberty 20, 88, 89, 189–90, 319 Southeast 262, 275, 285
403
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Asia Insurance Co. Ltd v. American benefits available for bodily injury or International Assurance Co. Ltd death 117–19 162 conceptual framework 112–14 asset financing 10–14 contemporary application 116–17 risks of 10, 11 payees of (‘Aqilah) 5–6, 29–30, 60, Takaful responses to financing risks 70–71, 136, 140, 248, 368 12–14 right beneficiaries 117–19 asset–liability management 293 scheme combining Dhaman assets 308 (compensation) with 121–8 adequate 86–7 underlying principles 114–16 valuation of 225–8 Board of Directors 291, 298, 300 asylum (Istijarah) 28 bodily injury 115 Australia 157, 158, 159 quantum of damages 112–28 authenticity of the Qur’an 316 bonds 203–4, 227 al-Azhar, Sheikh, Fatwa of 68, 239, bonus 338 241–2, 246–7 Booms, B.H. 302 Borhanuddin bin Haji Jautara & Anor babies 89 v. The American International Bahrain 260 Association Co. Ltd 154 Code of Contract Law 96 bottomry contract 136 bailment (Kafala Bijua’l) 33 Boulif, M. 41 Baitul mal (House of Finance) 257 bounty, seeking 321 Bank Aljazira 12–14 branding strategies 305–7 bankrupcty (Iflas) 90–91 breach of good faith, legal Banque Keyser Ullman S.a. v. S.Kandia consequences for 108–9 (UK) Insurance Co. Ltd and Ors breach of trust 319 171 brokers 21, 23, 75 Barakat Abu Ishaq (blessing of Abu licensing to market Takaful products Ishaq) 31 179–80 Bay’ (sale) 44 regulatory framework 76–7, 78–9 Bay’ Bithaman Ajil (BBA) (sale by Brunei 37 deferred payment) 43 Budd, E. 40 beneficial rights of illegitimate children business drivers 284 196–9 beneficiaries cancellation of a policy 108–9, 167 blood money 117–19 Canning v. Hoare 153 in Takaful 1, 20, 75, 137, 193–6 capacity, legal, see legal capacity nominees as absolute beneficiaries captivity 91 or trustees 15, 24–5, 75, Carter v. Boehm 168 211–19, 237–8, 251, 252 cash basis accounting 200–201, benefits 338 203–4 distribution of 2–3, 17, 196, 362–3 Cathe’s v. Commissioner of Stamp benevolent loans 210–11 Duties 211 betting 240, 244, 344–5 caveat emptor 169 binding promises 72–3, 250 Central Bank limitation to binding contract 324–5 expenses 224 in the School of Maliki 33–4 transfer of business 221–3, 225 blessing of Abu Ishaq 31 Chakroun, R. 298 blood money (Diyah) 5–6, 26–7, charitable trust, see Waqf (charitable 112–19, 121–8, 136, 369 trust)
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charity 44–5, 322 marketing strategies 300–305 Salaqah 185–6, 191–2 perspectives of Takaful in Europe charity fund, see Tabarru’ fund 310–14 cheating 328 contract Najsh 92–3, 165, 373 ‘Aqd principles 1, 20, 26, 42, 48, 62–3 in trade 92–3, 165, 328 Takaful justified by theQur’an 316, prohibition of 326 322 children and young people 89, 189–90 contracts 136–43 age of majority 20, 88, 89, 157–8, characteristics of 143–55 160, 189–90 conventional insurance 144, age of maturity 319 152–5, 156 age of puberty 20, 88, 89, 189–90, Takaful 143–52, 156 319 of clientage 29, 46–7 legal capacity 63, 157–60 essence of good faith in 163–72 Chop Eng Thye Co. v. Malaysian conventional insurance 168–72 National Insurance Sdn Bhd 154 Takaful 163–8, 172 Civil Codes 336 legal capacity of a Takaful contract claims 338 82–91 clientage, contracts of 29, 46–7 nature of an Islamic insurance Code of Islamic Civil Law 140–41 contract 16–18 Code of Muslim Personal Law (1980) necessary elements of an insurance 335–6 contract 54–7 commercial activities 57, 92–3 principles of contract affecting good faith in, see good faith conventional insurance 142 moral background and 100–101 Takaful 137–41 prohibited 324 rules governing conventional commercial insurance 348–51 insurance contracts 141–3, 144 commission 205–7, 339 Takaful compared with conventional for reinsurance 359–60, 360–61 insurance 339 common law 143 contributions 1–2, 3, 21, 24, 145, communication 290 149–52 branding and merchandising annulled policies 109, 168 strategies 305–7 deduction of management expenses compensation and commission 205–6 Dhaman, see Dhaman delayed 150–51, 183–4 life insurance as 249 forfeiture 151–2, 155, 184–5, 340 compliance 288 labelled as Musahamah 186–9, 191–3 compliance risks 13 medical history and 105–6 compromise, in compensation 124–7 suggested regulatory framework compulsory insurance 354–9 182–93 concealment 97–9 conventional financial institution consensus ad idem 162, 163 governance 296 consumptions, prohibited 317, 320 conventional insurance contemporary issues 286–314 agency 179–80 accounting issues 307–10 characteristics of contracts 144, branding and merchandising 152–5, 156 strategies 305–7 companies licensed for Takaful 81–2 corporate governance 296–300 comparison with Takaful 338–43 implementing conditions for Takaful essence of good faith 168–72 institutions 286–96 legal issues 156–60
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life insurance compared with the debt 322, 328–30 Islamic approach 237–8 settlement of 150–51, 183–4, 193–4, mutual consent 162, 163 196, 328 rules governing contracts 141–3, 144 deception 148–9, 344 sources of contract law 142–3 concealment of material facts why activities are regarded as illegal 97–9 344–5 in trade 330 cooperation 315 delayed contributions 150–51, 183–4 limitation to 317 dependents 80 mutual, see mutual cooperation material security for 56–7, 73–4, 80, cooperative companies 38, 41–2 235–6, 242–3, 244, 246–7, 251 cooperative insurance quantum of damages for bodily under Shari’ah rules and dealing in injury or accidental death 124, insurance business generally 125 347–8 deposit when it becomes an Islamic operator’s security fund 87 insurance 345–6 valuation of deposits 227 corporate governance 296–300 Wadiyah 45, 71–2, 248 for conventional and Islamic destruction financial institutions 296–8 in the Earth 322 for Takaful institutions 265, 266, sanction against 318 278, 290–91, 299–300 in the society 321–2 corporate securities 226–7 Dhaman (compensation, liability or corporate social responsibility (CSR) guarantee) 47–8, 64, 112, 120–28 313 central idea 120–21 Court of Appeal Castellain v. Preston combined with blood money as and Ors 141 alternative to quantum of Court confirmation for transfer of damages 121–8 business 221, 222–4 forms of 32–5 cover note, issuance of, see issuance of Dhaman ‘AlaKhatar al-Tariq (surety for cover note hazards on the highway) 34–5 creation of mankind 321, 330 Dhamin, see operators crime 3, 234–5; see also homicide; dichotomous analysis 136–78 quantum of damages characteristics of contracts 143–55 culpable homicide 114 conventional insurance 144, custom 143 152–5, 156 ‘Urf 60, 72, 140, 248 Takaful 143–52, 156 customer satisfaction 304–5 essence of good faith 163–72 in contracts 168–72 damages 339 in Takaful 163–8, 172 quantum of, see quantum of legal issues 155–60 damages under conventional insurance Darib 42–3 practices 156–60 Dawud (Prophet) 120 mutual consent 160–63 day of grace 155 principles of contract affecting death Takaful 137–41 belief in the certainty of 244 rules governing insurance contracts determined by Allah 68, 317–18 141–3, 144 due to a criminal act 3, 234–5 digitalization 305 quantum of damages 112–28 disaster risks 261
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disclosure of material facts 94–109, experience, lesson from 316 166–8, 331–2, 339 express written consent 206 conventional insurance contracts extra risk premiums 340 168–71 duration for 107–8 facultative Retakaful 22, 267 legal consequences for breach of fair trading 321 good faith 108–9 fairness 91–2, 163–4, 299, 318, 322 limitations for 99–106 Faisal Islamic Bank of Sudan (FIB) modes of non-disclosure 94–9 354–5, 358–9 discrimination 323 family Takaful 2–3, 36, 233–55 gender discrimination 22, 25 compared with conventional life issues in quantum of damages 127–8 insurance 237–8 disintermediation 277 contributors’ entitlement to the distribution of benefits 2–3, 17, 196, Tabarru’ fund at maturity 362–3 201–3 distribution methods 312 dispute among Islamic scholars divine rules for the establishment of a 238–50 Takaful company 79–81 flow of funds 363–4 Diyah, see blood money (Diyah) non-Muslims 21–2, 24–5 donations 21, 24, 74 proposals for 250–52 general insurance 16 regional distribution 280 life insurance and 250 Faraid 20, 23 regulatory framework for Fatawa/Fatwas 7 contributions in Takaful 185–9, Fatwa of Sheikh Al-Azhar 68, 239, 191–2 241–2, 246–7 Tabarru’, see Tabarru’ (donation) justifying Takaful and Retakaful taking back 21, 332 333–4 see also charity; gift on succession and wills 218 Douceret, M.H. 41 fear prayer 325 fetuses 89–90, 190, 198–9, 340 Egypt 37 Fidyah (ransom) 6, 27 Civil Code 95 financial condition of the proposer elements 339 101–2 equities 295–6 financial safety net 291–4 ethics in dispute 323 financial security 80 Europe 285 financing 227 perspectives of Takaful 310–14 financing risks 13 European Union 288 Fiqh al-Mua’malat (Islamic commercial ex-gratia 340 jurisprudence) 61, 297 excess-of-loss reinsurance 267 first constitution of Medina 5–6 executor versus absolute beneficiary 15, fixed-income securities 295 24–5, 75, 211–19, 237–8, 251, 252 flexibility 316 existing conditions of the subject flow of funds 363–4 matter of a policy 104 forfeiture 151–2, 155, 184–5, 340 expenses fraud 95–7, 344 accounting treatment for recognition free consent 160–61 of 200–201 funds 340 Central Bank’s 224 funeral expenses 194, 196 funeral 194, 196 funeral prayer 194 management 205–7, 309, 359 furniture and fittings 228
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gambling (Maisir) 67, 69–70, 268, role of Retakaful as constraint on 344–5, 362 273–7 life insurance 240, 244 guarantees 341 sanction against 317 Dhaman, see Dhaman Garas, S.N. 298 Kafala/Kafalah 33, 46 gender discrimination 22, 25 Gulf Cooperation Council (GCC) general damages region 259, 260–61, 262, 284 non-pecuniary 122 investment allocations 282 pecuniary 122 Takaful potential 275 general insurance 16, 66 general Takaful 36 hardship, relieving 54–5, 236, 324 contributions 21, 24 Hassan, M.K. 298 regional distribution 280 Hassan, Misbahul 92, 164 Takaful practices 180–82 hazard-asset risks 13 Gharar (uncertainty) 110, 361–2, 370 health policies 106 and commercial insurance 349–50 Hedayatullah v. Mst. Rahiman 217–18 life insurance 240, 244–5, 247 heirs, wills in favor of 194–6 misconceptions related to Islamic Hibah (gift) 185–6, 191–2, 216–17 insurance 67, 70 Hilf (allies) 28 Retakaful 268 Hilf al-Ahlaf (allies of al-Ahlaf) 28 and Takaful 110, 139, 164–5 Hilf al-Mutaibin (allies of al-Mutaibin) gift 28 Hibah 185–6, 191–2, 216–17 Hilfu al-Fidul (allies of al-Fidul) 29 Tabarru’, see Tabarru’ hiring/employment (Ijarah) 47 taking back 332 hobbies 102–3 see also donations homicide 112–15, 321 global models of Takaful 35–42, 279, quantum of damages, see quantum 363–4 of damages global Retakaful facility 276 honesty 92, 164; see also good faith global Takaful industry 259–61, 278 honor loans 38 concerns 283–4, 285 Humanitarian Law, principles of 65 top operators 8 hybrid Mudharabah–Wakala model good faith 20, 53, 63–4 40–41, 364 essence of in contracts 163–72 hypocrisy 318 in insurance contracts 168–72 in Takaful 163–8, 172 Ibn Abidin 4, 7, 26, 31–2, 59, 139 regulatory framework 91–109 surety for hazards on the highway duration for disclosure 107–8 34–5 legal consequences for breach of Ibrahim, Ahmad 197 good faith 108–9 Iflas (bankruptcy) 90–91 limitations for disclosure Ijab (proposal) 143, 145–7 99–106 Ijarah (hiring/employment) 47 modes of non-disclosure 94–9 Ijtihad 139 governance, see corporate governance Ikhlas (sincerity) 52–3, 323–4 government investment certificates illegal consent 160–61 (GICs) 203–4, 227 illegitimate children 196–9 grace period 155 immaterial facts 106 Grassa, R. 298 immovable property 225–6 growth of Takaful 259 implementing conditions for Takaful products driving 283 286–96
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anti-money laundering and terrorist interest, see Riba (usury or interest) financing facility 294 intermediaries communication and training 290 agents, see agents compliance and supervision 288–9 brokers, see brokers governance 290–91 regulatory framework 76–9 institutions and infrastructures 286–8 internal audit committee 265, 291 legal framework 286 internal Shari’ah audit 314 liquidity and investment International Financial Reporting management 294–6 Standards (IFRS) 309–10 prudential system and financial investment allocations 281–2 safety net 291–4 investment fund 1–2, 44–5, 138, 181–2, research and innovation 289–90 202–3, 209 imports, insurance on 354–5, 357 investment income 228 in vitro fertilization 197–8 investment management 281, 294–6 income, accounting treatment for investment markets 286–8 recognition of 200–201 investment risks 287–8, 293–4 India 157 investments 341 Insurance Act 1938 211 Iran 259–60 indirect homicide 115 Islamic financial services 1, 256–85 Indonesia 37, 260, 262, 275 brief profile 256–7 infants 89 corporate governance 297–8 information asymmetry 268 growth of the Islamic financial infrastructures 286–8 industry 310–11 inheritance, see Mirath (inheritance) institutions 263–6 injustice 148–9 key challenges for Takaful and innovation 276–7, 289–90 Retakaful 275–7 insolvency 207–8 nature of insurance practices 14–18 institutions insurance contract 16–18 international 263–6 potential for Takaful and Retakaful role of 286–8 in Arab and Asian markets 275 insurable interest 16, 20, 23, 75, 193, Retakaful as constraint on the 341 growth of Takaful 273–7 paradigm of in Takaful operations role of Retakaful 266–77 109–12 synergies between Takaful and 9–14 existing provision under the Takaful industry today 257–66 Malaysia Insurance Act 1996 Islamic Financial Services Board 109–10 (IFSB) 38, 265–6, 289 proposed alternative for Takaful standards 266 operation 110–12 IFSB-8 Standard 266, 278, 292 insurance contracts, see contracts Islamic Insurance Association of insurance history 103 London (IIAL) 263 insured, the 1, 137, 141 Islamic Scholars 61 legal issues under conventional consensus of opinions 59–60, 139 insurance practices 157–60 dispute on insurance 66–75 insurer, the 141 dispute on life insurance 238–50 duty to utmost good faith 171–2 justification in accordance with legal issues under conventional Shari’ah principles 247–50 insurance practices 156–7 opposing views 239–42 intention 323 response to opposing views 242–7 intentional homicide 114, 115 unanimous decisions 62
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issuance of cover note life expectancy 22, 25 conventional insurance contracts medical history 105 152, 153–4 life insurance 56–7, 66, 233–55 Takaful contracts 145, 148–9 conventional and Islamic alternative Istijarah (asylum) 28 237–8 Ivamy, E.R. 171 dispute among Islamic scholars 238–50 Jad al-Haq, Sheikh, Fatwa of 68, 239, insurable interest 109–12 241–2, 246–7 Islamic approach 15–16, 234–5 Joel v. Law Union and Crown Insurance misconceptions 68, 69, 71 Co. 169, 171 nominees, see nominees joint stock companies 346–7 proposals for which may suit the Ju’alah (reward for service) 45–6 modern Islamic economy Juruh, see bodily injury; quantum of 250–52 damages rational outlook 235–7 justice 91–2, 163–4, 318 unauthorized persons 91 limited liability companies 346–7 Kader, H.A. 291 liquidity 294–6 Kafala/Kafalah (binding liability or Lloyd’s of London 152, 262–3 guarantee) 33, 46 London marketplace 262–3 Kafala Bijua’l (bailment) 33 loss of future earnings 121, 122, 123–4, Karim v. Hanifa 64, 218 125 ‘key-man’ coverage 14 Khiyar, see right of option Maisir, see gambling (Maisir) kinsmen, see ‘Aqilah majority, age of 157–8, 160 Kuwait Civil Code 95 Rushd 20, 88, 89, 189–90 Malaysia 36–7, 62, 140, 259–60, 262, La Banque Financier Delacite SA v. 275 West Gate Insurance Co. Ltd 169 Civil Law Act 1956 211–12, 213–14 Lai Ah Heng & Anor v. China commercial banks and Islamic Underwriters Ltd 155 banking 84 Lambert v. Cooperative Insurance consensus ad idem 162 Society Ltd 170–71 Insurance Act 1996 109–11, 156–7, Lebanon 37 158, 169–70 legal capacity 16, 339 comparison with Takaful practices in regard to age 63, 157–60 211–19 of a Takaful contract 82–91, 160 existing provision 109–10 operator 82, 83–7 proposed alternative for Takaful participant 82, 87–91 operation 110–12 legal framework 286 transfer of business 220 legislation 61, 140, 142 with possible adjustment for legitimacy 196–7 Takaful 220–25 lesson from experience 316 investment allocations 281, 282 liabilities 308–9 legal capacity 157–8, 159 valuation of 225–8 money laundering and financing of liability terrorism 294 Dhaman, see Dhaman National Council for Muslim exemption from 325 Religious Affairs 218 forms of 32–5 nomination in an insurance policy principles of 63, 142–3 211–19
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Road Traffic Ordinance 1958 170 money laundering 294 Takaful Act 1984 17, 53, 55, 61, moral hazard 39 85–6, 87, 140, 337 limitations for disclosure 99–102, Takaful license for conventional 171 insurance companies 81–2 moral sanctions 53 utmost good faith 169–70 Morocco 37 Malaysian Government Investment motherhood, establishment of 321 Certificates (MGICs) 203–4, 227 motor vehicle insurance 354, 356–7 Malik Bin Anas 26–7 Mualat (contract of clientage) 29 management expenses 205–7, 309, 359 Mua’mman ‘Alaih, see participants marine travel insurance 6–7, 31–2, 139 Mudharabah (profit and loss sharing) market risks 13 1–2, 3, 4, 19, 23–4, 64–5, 361, 373 marketing strategies 300–305 dispute among Islamic scholars 69, Masalih al-Mursalah (public interest) 75 60, 73, 248–9, 325 insurance practices in Islamic material facts economies 14, 15, 17 disclosure of, see disclosure of life insurance and 235, 251 material facts and management expenses and test for 170–71 commission 206 material protection/security for necessary elements of an insurance dependents 56–7, 73–4, 80, 235–6, contract 54, 56 242–3, 244, 246–7, 251 Takaful practices 180–81, 182, 185 Matoussi, H. 298 model structures 42–3, 47–8 maturity, age of 319 Mudharabah model for Takaful 39–40, mechanisms, operational 341 364 media plan 306 Mudharabah–Wakala hybrid model Medical Defense Union Ltd v. 40–41, 364 Department of Trade 141 Mudharabah Retakaful model 271–2 medical expenses 122, 124, 125 Muhammad, Holy Prophet 120 medical history 105–6 development of insurance practices medical unfitness 17, 90 during the time of 5–6, 8 Mejelle, The 46, 337 Muhammad Bakhit al-Mutinyi, Shaikh merchandising strategies 305–7 35 mere consent 160–61 Muqaddar Khan v. Burmashell 218 Middle East 259, 262, 285 Murginani, Allama 61 Mirath (inheritance) 64, 68, 71, 216, Musahamah, see contributions 234, 241, 245–6, 326, 362 Musfitt v. Royal Insurance Co. 162 impediment to inheritance 326–7 Musharakah (partnership or sharing) misappropriation of wealth 315 1, 43, 65, 137 mischief 148–9 mutual assistance 257 misconceptions related to Islamic mutual consent 160–63 insurance 67–8 in conventional insurance 162, 163 responses 69–71 in Takaful (Ridha) 160–62, 163 misrepresentation 94–5 mutual cooperation 1, 2, 3–4, 87, mis-rewarding 344 149–50, 183 mistake, homicide by 114–15 dispute among Islamic scholars 69, model structures of Takaful practices 73 42–8 good faith 101–2 modified Mudharabah Retakaful model governing principle of Takaful 53, 272 55, 66
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life insurance 236, 238, 243, 245 accounting treatment for recognition nature of insurance in Islamic of income and expenses economies 15, 17–18 200–201 mutual free consent 160–62 allocation of management expenses mutual fund 137–8, 191–3 and commission 205–7 mutual fund units 295–6 companies whose management is mutual insurance 345 entrusted to an operator 38–41 mutual insurance companies 312 legal capacity 82, 83–7 registration of 84–6 Najsh (cheating) 92–3, 165, 373 solvency margin 207–11 National Council for Muslim Religious solvency requirements 210–11 Affairs 64, 218 top Takaful operators 8 nationality 102–3 transfer of business 219–25 nature 341 valuation of assets and liabilities necessity 73–4, 249–50 225–8 negligence, homicide caused by option, right of 107–8, 171–2, 331 116–19 option period 332 negotiable instruments of deposit 227 Organization of Islamic Conference no-claims bonus (NCB) 188, 341 (OIC) 7 no compromise between truth and orphans 57, 236, 242–3, 246–7 falsehood 322 security/custody for 332–3 nominees 2, 17, 64, 196, 342, 362–3 Ottoman Empire 116 absolute beneficiaries versus trustees 15, 24–5, 75, 211–19, 237–8, Pakistan 117, 262 251, 252 parallel sources 140 non-disclosure 167 participants 1, 137 modes of 94–9 legal capacity 82, 87–91 non-Muslims 21–2, 24–5 participants’ account (PA) 2, 44–5, 138, availability of Takaful for 314 181–2, 202–3, 209 Malaysian legislation relating participants’ investment fund (PIF) 40 to nomination in insurance participants’ risk fund (PRF) 40 policies 212–14 participants’ special account (PSA) 2, restrictions from being Takaful 44–5, 138, 181–2, 209 operators 83–4 contributors’ entitlement to the fund non-pecuniary general damages 122 at maturity 201–3 non-proportional reinsurance 267 deduction of management expenses NurMuhammad v. Mst. Sardar Khatun and commission 205, 206–7 218 see also Tabarru’ fund Nyquist, J. 302 partnership (Musharakah) 1, 43, 65, 137 oath (Qasamah) 26–7 pecuniary general damages 122, 124 obedience 316 pedagogy 303–4 obligations and rights, principles of pension schemes 74, 249 65 people 301–2 occupation 102–3 periodicals 334 oneness of Islam 316 periodicity 309 online institutions 334–5 personal account 191 operational mechanisms 341 physical evidence 301–2 operations risks 13 physical hazard 99, 102–3, 171 operators 1, 137–8 piety 257
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place 301, 304 Qatl bi al-Sabab (indirect homicide) poverty reduction 55, 80, 236 115 practices of the companions 6, 59 Qatl Shibhu al-‘Amd (culpable precedents 62 homicide) 114 premiums 15, 141, 142, 152, 154–5, 342 Qisas (retaliation) 112–13, 113–14 first payment as acceptance 153 quantum of damages 112–28 outstanding 228 blood money 112–19 in Takaful, see contributions blood money and compensation as price 301, 303, 304, 312 alternative solution 121–8 process 301–2 compensation 120–21 product 301, 304 compromise 124–7 professionalism 304 discrimination issues 127–8 profit sharing, see Mudharabah (profit proposed structure 122–4, 125 and loss sharing) queries 344–63 profits 342 Qur’an 57–8, 70, 138, 374 on reserves 360, 361 authenticity of 316 prohibited consumptions 317, 320 justifications for Takaful 315–23 promotion 301, 304 Quttainah, M.A. 298 Prophetic Sanctions, see Sunnah (Traditions of the Holy Prophet) Rabbul-mal/Rabbul Mal 42–3, 374 proportional reinsurance 267 Rahman, Tanzil-ur 218 proposal ransom (Fidyah) 6, 27 conventional insurance 152 Rasulullah 28, 29 Ijab 143, 145–7 rating practices 274 prosperity, seeking 315 rational outlook 235–7 Prudential Insurance Company v. I.R.C. Re Bahadunbin Haji Hassan deceased 141 212, 214–15 prudential system 291–4 Re Bradley 171 puberty, age of 20, 88, 89, 189–90, 319 Re Engelbach’s State, Libbetts v. public interest (Masalih al-Mursalah) Engelbach 211 60, 73, 248–9, 325 Re Ismail b. Rentah deceased 218 pure Mudharabah Retakaful model Re Loakimidi’s Policy Trust 212 271–2 Re Manbin Mihat deceased 212, pure Wakalah Retakaful model 271, 213–15 272 Re Schebsman deceased 211 purely mutual companies 38, 41–2 recognition of income and expenses pureness 304 200–201 putting trust in Allah (Tawakkul) 68, record keeping 308 71, 241, 245, 251, 317, 324 reference works 334 registration of operators 84–6 Qabul (acceptance) 143, 145, 147–8 regulations 342 Qard (loan) 310 regulatory frameworks 342 Qard al-Hasanah Fund 269–70 governing Takaful and Retakaful Qardhu al-Hasanah (benevolent loan) 335–7 210–11 Takaful 52–135 Qasamah (oath/swear) 26–7 dispute among Islamic scholars on Qatl al-‘Amd (intentional homicide) insurance 66–75 114, 115 divine rules for the establishment Qatl bi al-Khata (homicide by mistake) of a Takaful company 79–81 114–15 governing principles 52–7
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legal capacity of a Takaful risk fund 309 contract 82–91 risk management 258 provision under the Malaysia application to Islamic asset finance Insurance Act 1996 109–12 10, 11 quantum of damages 112–28 implementing conditions for Takaful sources of law 57–66 institutions 291–4, 294–5 suggested framework for synergies between Islamic finance contributions 182–93 and Takaful 10–12 Takaful intermediaries 76–9 Takaful responses to key areas of Takaful license for a conventional risk 12, 13 insurance company 81–2 risk mitigation 12, 292–3 utmost faith in Takaful 91–109 risk reporting 292 reinsurance 258, 266–8, 351–4 risks 283 commissions 359–60, 360–61 Ritchie v. Salvation Army Assurance companies 25 159 Retakaful, see Retakaful Rozanes v. Bowen 168 Takaful and conventional Rushd (puberty or majority), age of 20, reinsurance 270–71 88, 89, 189–90 relationship marketing 302 research 289–90 Sabeq, Syed 61 reserves, profits on 360, 361 Sadaqah (charity) 185–6, 191–2 residence 102–3 Salahi, Adil 74, 249 responsibility 299 Salam (sale by deferred delivery) 44 for own deeds 320 sale (Bay’) 44 Retakaful 22–3, 25, 256–85 sale by deferred delivery (Salam) 44 amounts due from operators 228 sale by deferred payment (Bay’ key challenges ahead 275–7 Bithaman Ajil) 43 operational models 271–3 sales distribution 343 potential in Arab and Asian markets Saudi Arabia 41–2, 259–60, 275 275 blood money 116–17 role of 266–71 saving for security 324 role as constraint on the growth of Sayyidina Omar, second Caliph 6, 8 Takaful 273–7 scale 276 retaliation (Qisas) 112–13, 113–14 security fund (SF) 209, 211 retirement pension schemes 74, 249 SEDCO Capital 313 return on equity (ROE) 10 selection of faith not allowed 322–3 return on investment (ROI) 10 self-reliance 55–6, 237 reward shared guarantee 1, 2 for own deeds 320, 321 shared responsibility 1, 2 for service (Ju’alah) 45–6 shareholders’ fund 200, 201, 206 Riba (usury or interest) 17, 79–80, 164, Shari’ah principles 19, 53 268, 344, 374–5 accounting and 307–9 life insurance 237, 239–40 justification of life insurance 247–50 misconceptions related to Islamic quantum of damages 121 insurance 67, 69 Shari’ah Supervisory Boards (SSBs) or prohibition 56, 315, 325 Councils 19–20, 62, 140, 258, 265, Ridha (mutual consent) 160–62, 163 291, 297–8, 300, 313–14 right of option 107–8, 171–2, 331 Siddiqi, M.N. 18 rights and obligations, principles of 65 sincerity (Ikhlas) 52–3, 323–4 risk adjusted return (RAR) 10 sincerity in worship 315
Mohd M. Billah, Ezzedine GhlamAllah and Christos Alexakis - 9781788115834 Downloaded from Elgar Online at 10/01/2021 02:31:45PM via free access
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Singapore 37 Ta’awun (mutual assistance) 144, 257, slips 152 339, 363 social security 324 Tabarru’ (donation) 2, 16, 21, 24, 44–5, solidarity 1, 2 47–8, 180–81, 257 limitation to 318 regulatory framework for solvency margin 207–11 contributions 185–9, 191–2 solvency requirements 210–11 Tabarru’ fund 1–2, 3, 44–5, 138, 181–2, solvency ratio 207–9 185–6, 191, 209 sources of law governing Takaful 57–66 contributors’ entitlement to at general sources 57–62 maturity in the family Takaful specific sources 62–6 201–3 Southeast Asia 262, 275, 285 deduction of management expenses sovereignty 316 and commission from 205, special damages 122 206–7 spectrum of enterprise risks 10, 11 Takaful staffing level 274 analysis of the principles of 20–23 standardization 309 assets breakdown 8 standards 265, 291 basic elements explained 26–35 IFSB 266, 278, 292 characteristics of a Takaful contract stare decisis, doctrine of 143 143–52, 156 Stareborg v. Edinburgh Life Insurance comparison with conventional Co. 155 insurance 338–43 State Authority supervision 18 concept 1–3, 19–20 Steinberg v. Scala 159 development in stages 4–8 strategic risks 13 14th–17th centuries 6–7 Sudan 36, 62, 140 19th century 7 Faisal Islamic Bank (FIB) 354–5, 20th century 7–8 358–9 ancient Arabs 4–5 Sufi Order of the Kazeeruniyya 6–7 practices of the companions 6 suicide 3, 343 practices of the Holy Prophet sanction against 330 5–6 Sukrah (marine travel insurance) empirical paradigm explained 18–25 31–2, 139 essence of good faith 163–8, 172 Sukuk (alternative to bonds) 282, global models 35–42, 279, 363–4 286–7, 379 governing principles 52–7 Sulaiman 120 implementing conditions, see Sunnah (Traditions of the Holy implementing conditions for Prophet) 57–8, 58–9, 70, 138–9 Takaful justifications for Takaful and legal capacity of a Takaful contract Retakaful 323–33 82–91, 160 supervision 288–9 mutual consent 160–62, 163 surety nature of insurance practices in Dhaman, see Dhaman Islamic economies 14–18 for hazards on the highway 34–5 origin of 3–4, 323 surrender value 343 possible recommendations 23–5 surrogacy 198–9 principles of contract affecting sustainable finance 312–13 137–41 swear/oath (Qasamah) 26–7 sources of contract law 138–41 synergies between Islamic finance and regulatory framework, see regulatory Takaful 9–14 frameworks
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responses to asset financing risks with possible adjustment for 12–14 Takaful 220–25 sources of law governing 57–66 model structures of 42–8 synergies between Islamic finance solvency ratio and solvency margin and 9–14 207–9 see also Takaful industry; Takaful solvency requirements 210–11 practices suggested regulatory framework for Takaful industry 257–66, 278–85 contributions 182–93 contemporary issues, see transfer of business 219–25 contemporary issues valuation of assets and liabilities corporate governance 265, 266, 278, 225–8 290–91, 299–300 taking back donation/gift 21, 332 divine rules for establishing a Tawwakul (putting trust in Allah) 68, Takaful company 79–81 71, 241, 245, 251, 317, 324 geographical distribution 259–63, Tay Hean Seng v. China Insurance Co. 279–80 Ltd 162 global turnover 259–61, 278 term of the policy 343 growth 259, 278 termination of a policy 108–9, 151–2, products driving 283 167, 184–5 prospects for 275, 278 terrorism, financing of 294 role of Retakaful as constraint on Thomas, R. 37 273–7 Traditions of the Holy Prophet, see international institutions 263–6 Sunnah investment allocations 281–2 training 290 key challenges ahead 275–7, 283–4, transactions, see commercial activities; 284–5 good faith London marketplace 262–3 transfer of business 219–25 by region 262, 279–80 transparency 299 staffing levels 274 travel, surety for hazards in 34–5 standards 265, 266, 278, 291, 292 treaty Retakaful 22, 267 top operators 8 trust 305, 317, 319–20 world leaders 259–61 Amanah doctrine 18, 45, 215 Takaful practices 179–232 breach of 319 accounting treatment for recognition compliance with 319 of income and expenses trust in Allah (Tawakkul) 68, 71, 241, 200–201 245, 251, 317, 324 agency in insurance and 179–80 trustees, nominees as 15, 24–5, 75, allocation of management expenses 211–19, 237–8, 251, 252 and commission 205–7 beneficial right of an illegitimate uberrimae fidei (utmost good faith), see child 196–9 good faith beneficiaries 1, 20, 75, 137, 193–6 unauthorized persons 91 contributors’ entitlement to the uncertainty Tabarru’ fund in family Takaful conventional insurance 141 201–3 Gharar, see Gharar general Takaful contract 180–82 liability of 33 GICs and other bonds 203–4, in trade 325 227 underwriting 292 Malaysia Insurance Act 1996 United Arab Emirates (UAE) 260, 262, compared with Takaful 211–19 275
Mohd M. Billah, Ezzedine GhlamAllah and Christos Alexakis - 9781788115834 Downloaded from Elgar Online at 10/01/2021 02:31:45PM via free access
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Civil Code 96 Mudharabah–Wakala hybrid model United Kingdom (UK) 157 40–41, 364 legal capacity 158–9 Wakalah (agent) 47–8, 64, 304 utmost good faith 169 Wakalah Retakaful model 271, 272 unlawful elements 239, 243, 247 Wakalah Waqf Retakaful model 271, ‘Urf (custom) 60, 72, 140, 248 273 usury, see Riba (usury or interest) Wakil, see agents; brokers utmost good faith, see good faith Wala’ (clientage) 46–7, 377 Waqf (charitable trust) 193, 377 vagueness 345 Wakalah Waqf Retakaful model 271, validity of insurance 66–75 273 valuation of assets and liabilities Wasiyah (will or bequest) principle 64, 225–8 68, 71, 194, 216, 362 variable-income securities relative to life insurance 234, 241, 245–6 capital 295–6 widows 56–7, 235–6, 242–3, 246–7 violation of faith 318 will of Allah 69, 240 void policies 108–9, 155, 167, 171–2 wills 320, 327–8 beneficiaries in Takaful 194–6 Wadia’h (or Wadiyah) (deposit) 45, limitation to will 327 71–2, 248 scope of 328 Wadia’h Retakaful model 271, 273 world leaders in Takaful 259–61 Wa’du al-MulzimInda al-Malikiyah written proposals 146 (binding promise in the School of Maliki) 33 Zaid 28 Wakala model for Takaful 39, 363 Zakat 207, 377
Mohd M. Billah, Ezzedine GhlamAllah and Christos Alexakis - 9781788115834 Downloaded from Elgar Online at 10/01/2021 02:31:45PM via free access
BILLAH PRINT.indd 417 26/09/2019 16:12 Mohd M. Billah, Ezzedine GhlamAllah and Christos Alexakis - 9781788115834 Downloaded from Elgar Online at 10/01/2021 02:31:45PM via free access
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