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Book part
Publication date: 26 August 2019

Safinar Salleh, Akmal Hidayah Halim, Uzaimah Ibrahim and Mohamad Asmadi Abdullah

A family takaful certificate is subscribed by a takaful participant for the purpose of preparing financial support for his dependants after his death. The takaful benefits could…

Abstract

A family takaful certificate is subscribed by a takaful participant for the purpose of preparing financial support for his dependants after his death. The takaful benefits could then be made payable to a nominee named as the beneficiary under conditional hibah (gift). In this respect, the participant is free to decide to whom the benefits are to be given since the law is silent as to the criteria of the beneficiary. This situation gives rise to the issue on whether such a practice fulfils the objectives of Sharīʿah, especially when the nominated beneficiary is not the sole dependant of the deceased participant. Therefore, this research aims to evaluate the status of family takaful benefits, analyse the rules of conditional hibah from the Sharīʿah perspective and propose solutions whenever necessary. The research adopts doctrinal analysis by examining existing primary and secondary materials including statutory provisions and other legal and non-legal literatures. The study predicates that the application of conditional hibah to the whole benefits does not reflect the objectives of Sharīʿah if determination on the status of the benefits is solely based on the nomination made by the participant. It is observed that takaful benefits payable from the Participant’s Account should be considered as the deceased’s estate and must be distributed according to fara’id or Islamic law of inheritance. Conversely, the sum covered payable from the Participant’s Special Account may be paid to the deceased’s dependants whose criteria are determined by the Sharīʿah Advisory Council as the highest authority in Islamic financial matters.

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Emerging Issues in Islamic Finance Law and Practice in Malaysia
Type: Book
ISBN: 978-1-78973-546-8

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Book part
Publication date: 19 November 2018

Rafiza Zuliani and Asmak Ab Rahman

Purpose – The purpose of this study is to review the responses of low-income earners to micro-takaful and its implementation in Banda Aceh.Methodology/approach – The data for the…

Abstract

Purpose – The purpose of this study is to review the responses of low-income earners to micro-takaful and its implementation in Banda Aceh.

Methodology/approach – The data for the study were obtained by interviewing three parties. These parties were practitioners, academic experts and low-income earners selected by purposive sampling in each zone of Banda Aceh.

Findings – The study found that there is a potential for micro-takaful to be offered in Banda Aceh due to the needs of low-income groups for it; however, there are many challenges which need to be overcome for successful implementation.

Research limitations – The study is limited to the potential implementation of micro-takaful in Banda Aceh. Therefore, the study involves only its residents.

Originality/value – This study makes a positive contribution to stakeholders by ensuring that they can provide micro-takaful schemes for the benefit of low-income earners. The study also adds to the literature on the concept of micro-takaful.

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New Developments in Islamic Economics
Type: Book
ISBN: 978-1-78756-283-7

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Content available
Book part
Publication date: 19 November 2018

Abstract

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New Developments in Islamic Economics
Type: Book
ISBN: 978-1-78756-283-7

Book part
Publication date: 20 January 2022

M. Kabir Hassan, Aishath Muneeza and Adel M. Sarea

This chapter explores the impact of the pandemic on Islamic commercial finance and Islamic social finance in a comprehensive manner. The chapter reveals that COVID-19 has provided…

Abstract

This chapter explores the impact of the pandemic on Islamic commercial finance and Islamic social finance in a comprehensive manner. The chapter reveals that COVID-19 has provided more opportunities to Islamic social finance than Islamic commercial finance. The beauty of Islamic finance in this regard is reflected as the perception that Islamic finance does not achieve its objective as being a social finance is proved to be false as Islamic finance not only promotes profit maximization, but it has also the potential to achieve social objectives. Islamic commercial finance developments could be slower, but it is anticipated that Islamic social modes of financing will be used widely even by multilateral agencies to assist the communities who need help in this pandemic. The most important lesson one could learn from this pandemic in relation to Islamic finance is that Islamic finance is truly different from conventional finance and as such, it needs a unique legal, regulatory and governance framework to display the true potential of it.

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Towards a Post-Covid Global Financial System
Type: Book
ISBN: 978-1-80071-625-4

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Book part
Publication date: 20 May 2019

Noor Aimi Mohd Puad and Zurina Shafii

Shari'ah governance is a vital aspect that ensures internal shari'ah compliance function in Islamic financial industry, including the takaful industry. Shari'ah audit is a…

Abstract

Shari'ah governance is a vital aspect that ensures internal shari'ah compliance function in Islamic financial industry, including the takaful industry. Shari'ah audit is a component of shari'ah governance in any Islamic institution as it independently attests the state of shari'ah compliance. Besides, it contributes towards shari'ah non-compliance risk management and enhances the quality of internal shari'ah audit function. The main aim for this chapter is to discuss the scopes and processes of shari'ah audit function in takaful operation. In addition, a discussion on applicable key controls in takaful operation is also provided. This chapter provides an insight into shari'ah audit implementation in a takaful operator, based on the information solicited from an interview session with its shari'ah auditor. This chapter provides fundamental aspects of shari'ah audit exercise in takaful operation and raises takaful operator's views on the challenges and adequacy of guidelines on shari'ah audit for its effective implementation.

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Research in Corporate and Shari’ah Governance in the Muslim World: Theory and Practice
Type: Book
ISBN: 978-1-78973-007-4

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Book part
Publication date: 19 November 2018

Mirwanee Ha, Asmak Ab Rahman and Azizi Che Seman

Purpose – The objective of this study is to assess the level of understanding of family takaful among the Muslim community of southern Thailand.Methodology/approach – This study…

Abstract

Purpose – The objective of this study is to assess the level of understanding of family takaful among the Muslim community of southern Thailand.

Methodology/approach – This study used a questionnaire as the data collection tool. It sampled 400 respondents who were selected in a simple way, regardless of whether they owned protection policies or not. The methods used to analyse the data are descriptive statistics and means, and independent samples T-testing.

Findings – The study found that the Muslim community in southern Thailand had a generally low level of understanding of family takaful. However, the differences in the level of understanding between those who participated in family takaful and those who did not were examined. The research findings were then found to indicate that there was a distinction between the two groups: those who participated in family takaful had a clear and positive understanding of it, while those who did not had no clear understanding of it. These are significant differences which signify that participation in family takaful by Muslims in southern Thailand was influenced by their understanding of it.

Research limitations/implications – This study was conducted in the Muslim community in and around Muang District, Narathiwat Province, in southern Thailand.

Practical implications – This study clearly indicates, especially to those involved directly or indirectly in the takaful industry, that there are still many in the community who do not participate in family takaful because they lack understanding and have negative perceptions of it. Those who are involved must make the effort to communicate more in-depth insights to target communities, which could effectively enhance the uptake of family takaful.

Originality/value – This is the first empirical study of takaful in Thailand. It was conducted to determine the level of understanding of family takaful in the Muslim communities of southern Thailand and to compare the levels of understanding of family takaful between those who have participated in it and those who have not.

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New Developments in Islamic Economics
Type: Book
ISBN: 978-1-78756-283-7

Keywords

Book part
Publication date: 19 November 2018

Nuurshiraathal Firdaws Abd Rani and Asmak Ab Rahman

Purpose – Women are more susceptible to specific health risks such as breast cancer, cervical cancer, and risk during pregnancy and childbirth. These can affect women’s well-being…

Abstract

Purpose – Women are more susceptible to specific health risks such as breast cancer, cervical cancer, and risk during pregnancy and childbirth. These can affect women’s well-being and also need to be managed to avoid financial loss. Takaful operators in Malaysia have been offering special takaful products for women. Women can mitigate exposure to these risks through insurance. This study examines the risks faced by Malaysian women and the coverage they are offered by Islamic insurance.

Methodology/approach – The study used a qualitative methodology involving documentary evidence and interviews with four Islamic insurance agents and four product development officers from four Islamic insurance providers in Malaysia.

Findings – Among the risks faced by women are female-specific illnesses, the cost of expensive treatments, crime-related accidents or loss, social or career risks and privatisation policy. Due to these risks, women are in need of female-specific takaful products to reduce risk and protect themselves.

Originality/value – Specific takaful products for women are crucial to protect them from risks, improving their well-being and increasing their participation in the nation’s economic and social development.

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New Developments in Islamic Economics
Type: Book
ISBN: 978-1-78756-283-7

Keywords

Book part
Publication date: 19 November 2018

Aisyah Mustafa and Asmak Ab Rahman

Purpose – This chapter examines whether the underwriting processes of takaful operators for health takaful products conform to shariah.Methodology/approach – A qualitative…

Abstract

Purpose – This chapter examines whether the underwriting processes of takaful operators for health takaful products conform to shariah.

Methodology/approach – A qualitative research method has been used for this study. Data have been collected from primary sources through interviews and from secondary sources by examining relevant documentation. Interviews were conducted with underwriters from takaful operators A, B, C and D. Interviews were also conducted with the shariah executives of these takaful operators and with shariah experts from two institutions – University A and Research Institute B – for their opinions on the underwriting process. This selection of respondents from those responsible for the underwriting process and from experts in shariah has assisted us in locating data for our research, based on their experience and the practices in which they are involved.

Findings – The study found that the underwriting process used by takaful operators was in accordance with Islamic principles.

Research limitations/implications – The study is limited to four takaful operators in Malaysia who have received awards for best operators; this study focuses on health takaful products.

Originality/value – This study provides a view about the process of risk selection which determines the contribution rate and whether a risk will be acceptable or not to the company.

Details

New Developments in Islamic Economics
Type: Book
ISBN: 978-1-78756-283-7

Keywords

Abstract

Details

Emerging Issues in Islamic Finance Law and Practice in Malaysia
Type: Book
ISBN: 978-1-78973-546-8

Abstract

Details

Towards a Post-Covid Global Financial System
Type: Book
ISBN: 978-1-80071-625-4

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