Essential Guide to Takaful

Home > Essential Guide to Takaful

 Essential Guide to Takaful (Islamic Insurance)
 Dr. Engku Rabiah Adawiah, Hassan Scott Odierno, Azman Ismail
 CERT Pubs. Sdn. Bhd., 2008
ISBN: 978-983-43710-1-2

About the book

The takaful industry has emerged as an important component of the financial system. The takaful business has been successfully integrated with the other components of the Islamic financial system and is seen as a new emerging sector with products as competitive as the ones offered by conventional insurance. The conducive environment through the provision of a sound legal, regulatory and Shari`ah framework will continue to facilitate further the development and growth of the takaful industry towards greater heights.

The first chapter of this Essential Guide provides the readers with a comprehensive understanding of the philosophy and Shari`ah principles in takaful. The chapter explains in detail, the concept of takaful, its definition and basic modus operandi, myths and facts surrounding takaful, as well as the elements that make conventional insurance unacceptable from Islamic perspective. The next chapter then explains the various underlying contracts embedded in the various takaful models. This is followed by the chapter on takaful models, products and operations. After reading the first three chapters, the readers will be able to make a clear comparison between the conventional insurance products and the takaful products.

Following the walk through on the takaful products, the Essential Guide then gives an insight into the various models that can be adopted or considered in the practice of pricing and reserving. This is covered under the chapter on “Managing risks in takaful through pricing and reserving practices”. To make the Essential Guide on Takaful more complete, the reporting framework and relevant accounting standards are explained together with the various disclosure requirements and other relevant governance standard and code of ethics which a takaful operator is expected to comply with.

This is followed by the two chapters on: the concept and practice of retakaful as a means of spreading individual takaful operator’s risks; and the concept and operation of “bancatakaful” as a distribution channel for takaful products. In the chapter on bancatakaful, the readers are enlightened on how bancatakaful can act as a means to increase the takaful market’s share in the insurance industry. Finally, the last chapter touched on the management of takaful funds and the various Islamic investment products, including the various screening process for Islamic equity investment. This Essential Guide will prove useful and constructive to readers who want a better understanding of the takaful industry in contemporary Islamic finance.

Useful and constructive to readers who want a better understanding of the Takaful industry in contemporary Islamic finance.

Author Information

Prof. Dr. Engku Rabiah Adawiah

Prof. Dr. Engku Rabiah Adawiah is currently at the IIUM Institute of Islamic Banking and Finance, International Islamic University Malaysia (IIUM). She obtained her LLB (First Class Honours) and LLB (Shari’ah) (First Class Honours) from the IIUM. Shortly thereafter, she successfully completed her Masters of Comparative Laws (MCL) with distinction from the same university. She was conferred with PhD in Law (Securities Regulation) from the University of Aberdeen, United Kingdom.

She teaches both Shari’ah and civil law; particularly on the subjects of Islamic transactions, company law, law of contracts and Islamic banking and securities at both undergraduate and postgraduate levels.

Her research interest is in securities regulation, company law, Islamic law of transaction, and Islamic banking and finance. Her publications include articles in some journals and periodicals in Malaysia and international. She also serves as a member of Shariah advisor and consultant to several financial institutions and legal firms.

Currently, she is a member of the Syariah Advisory Council (SAC) of Bank Negara Malaysia and Securities Commission Malaysia, and an independent Shariah advisor for Islamic securities issuance, approved by and registered with the Malaysian Securities Commission. In addition, she is also a member of the investigation tribunal for the Malaysian Bar Council.

Hassan Scott Odierno
Hassan Scott Odierno is a principal and actuary with Mercer Zainal Consulting in Malaysia. His specialties are in life and takaful consulting. He is the appointed actuary for a Takaful operator, two retakaful operators and an international Takaful operation in Malaysia. He is also the appointed actuary for a reinsurer in
Malaysia, and an insurer in Mauritius and Hong Kong. He has been involve
d in assisting companies set up Takaful operations from feasibility studies to
product and model development and businessprojections in Malaysia, Indonesia, Saudi Arabia and Bahrain. He is the co-author of a Takaful book and a contributing author to another book and frequently writes articles on
Takaful. He is also the external advisor to two universities in Malaysia to their risk management and actuarial science programs.
Hassan is a Fellow of the Society of Actuaries, and has a Bachelor of Science degree with high distinction in Mathematics from Worcester Polytechnic Institute in the USA.