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Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia

Takaful has been known as Shari’ah compliant insurance and it is penetrating not only into the Muslim countries but also into the non-Muslim countries. Among the countries which offer Islamic finance products, Malaysia is well known as one of the leading countries encouraging this industry. Due to t...

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Main Authors: Htay, Sheila Nu Nu, Salman, Syed Ahmed
Format: Conference or Workshop Item
Language:English
English
Published: 2013
Subjects:
HG1501 Banking
Online Access:http://irep.iium.edu.my/32895/1/Shariah_and_ehtical_Issues_in_Takaful_27.pdf
http://irep.iium.edu.my/32895/2/Brunei_1.pdf
http://irep.iium.edu.my/32895/
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spelling my.iium.irep.328952013-11-20T06:15:11Z http://irep.iium.edu.my/32895/ Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia Htay, Sheila Nu Nu Salman, Syed Ahmed HG1501 Banking Takaful has been known as Shari’ah compliant insurance and it is penetrating not only into the Muslim countries but also into the non-Muslim countries. Among the countries which offer Islamic finance products, Malaysia is well known as one of the leading countries encouraging this industry. Due to the rapid growth of the takaful industry, the prevailing guidelines and regulations might not be adequate to capture the current needs of takaful operations. Thus, the practice of takaful industry has been criticized from the Shari’ah and ethical aspects. It is important to examine these main issues because Shari’ah compliance and ethicality are the distinguishing factors that make takaful different from conventional insurance. We also believe that if these issues are not resolved, the participants and the investors will lose the confidence in the takaful industry and consequently, it will hinder the growth of takaful industry. This paper focuses on the Shari’ah and ethical issues in the modified mudarabah model used in family takaful products. They are related to profit (surplus) sharing practice and the usage of interest free loan. The findings of this paper reveal the existence of unfavorable Shari’ah and ethical issues in the practice of takaful operation in Malaysia. Therefore, we suggest that the regulators, Shari’ah advisors and industrial players should revisit on these issues in order to avoid reputational risk, Shari’ah compliant risk and early termination risk. 2013-09 Conference or Workshop Item REM application/pdf en http://irep.iium.edu.my/32895/1/Shariah_and_ehtical_Issues_in_Takaful_27.pdf application/pdf en http://irep.iium.edu.my/32895/2/Brunei_1.pdf Htay, Sheila Nu Nu and Salman, Syed Ahmed (2013) Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia. In: 3rd International Conference on Business and Economics Research (ICBER 2013), 28-29 Sept 2013, Bandar Seri Begawan, Brunei Darussalam. (Unpublished)
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
English
topic HG1501 Banking
spellingShingle HG1501 Banking
Htay, Sheila Nu Nu
Salman, Syed Ahmed
Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia
description Takaful has been known as Shari’ah compliant insurance and it is penetrating not only into the Muslim countries but also into the non-Muslim countries. Among the countries which offer Islamic finance products, Malaysia is well known as one of the leading countries encouraging this industry. Due to the rapid growth of the takaful industry, the prevailing guidelines and regulations might not be adequate to capture the current needs of takaful operations. Thus, the practice of takaful industry has been criticized from the Shari’ah and ethical aspects. It is important to examine these main issues because Shari’ah compliance and ethicality are the distinguishing factors that make takaful different from conventional insurance. We also believe that if these issues are not resolved, the participants and the investors will lose the confidence in the takaful industry and consequently, it will hinder the growth of takaful industry. This paper focuses on the Shari’ah and ethical issues in the modified mudarabah model used in family takaful products. They are related to profit (surplus) sharing practice and the usage of interest free loan. The findings of this paper reveal the existence of unfavorable Shari’ah and ethical issues in the practice of takaful operation in Malaysia. Therefore, we suggest that the regulators, Shari’ah advisors and industrial players should revisit on these issues in order to avoid reputational risk, Shari’ah compliant risk and early termination risk.
format Conference or Workshop Item
author Htay, Sheila Nu Nu
Salman, Syed Ahmed
author_facet Htay, Sheila Nu Nu
Salman, Syed Ahmed
author_sort Htay, Sheila Nu Nu
title Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia
title_short Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia
title_full Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia
title_fullStr Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia
title_full_unstemmed Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia
title_sort shari’ah and ethical issues in the practice of modified mudharabah family takaful model in malaysia
publishDate 2013
url http://irep.iium.edu.my/32895/1/Shariah_and_ehtical_Issues_in_Takaful_27.pdf
http://irep.iium.edu.my/32895/2/Brunei_1.pdf
http://irep.iium.edu.my/32895/
_version_ 1643610321918623744
score 13.211869

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