Hibah in Takaful Industry

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FACULTY OF MANAGEMENT AND MUAMALAH SESSION I 2010/2011 HIBAH IN TAKAFUL INDUSTRY PREPARED FOR: USTAZ KHAIRUL ANWAR BIN AHMAD PREPARED BY: BACHELOR IN ISLAMIC FINANCE (BANKING) (HONS) FIQH MUAMALAH II BIMM 5103 FARAH SULASTRY BINTI SUHAIMI (09BB05028) NUR ATIQAH BINTI ZAKARIA (09BB05036) BACHELOR IN ECONOMY AND FINANCE (HONS) FIQH MUAMALAH II BIMM 5013 ROSWAHIDA BINTI AHMAD SHUBELI

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Transcript of Hibah in Takaful Industry

Page 1: Hibah in Takaful Industry

FACULTY OF MANAGEMENT AND MUAMALAHSESSION I 2010/2011

HIBAH IN TAKAFUL INDUSTRY

PREPARED FOR:USTAZ KHAIRUL ANWAR BIN AHMAD

PREPARED BY:

BACHELOR IN ISLAMIC FINANCE (BANKING) (HONS)

FIQH MUAMALAH IIBIMM 5103

FARAH SULASTRY BINTI SUHAIMI(09BB05028)

NUR ATIQAH BINTI ZAKARIA(09BB05036)

BACHELOR IN ECONOMY AND FINANCE (HONS)

FIQH MUAMALAH IIBIMM 5013

ROSWAHIDA BINTI AHMAD SHUBELI(07BB03001)

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TABLE OF CONTENTS

TITLE PAGE

ACKNOWLEDGEMENT 3

1.0 INTRODUCTION

1.1 THE HISTORYCAL DEVELOPMENT OF AL- TAKAFUL

1.1.1 DEFINITION

1.1.2 PRINCIPLE ON TAKAFUL

1.2 TREND IN TAKAFUL INDUSTRY

1.2.1 KEY TRENDS IN THE TAKAUL LANDSCAPE

1.2.2 SIGNIFICANT TREND IN TAKAFUL INDUSTRY

1.3 MODEL OF TAKAFUL

1.3.1 GENERAL TAKAFUL MODELS

1.3.2 FAMILY TAKAFUL MODELS

1.3.3 THE CONCEPT AND WORKING SYSTEM OF

TAKAFUL

1.4 GROWTH IN TAKAFUL INSUSTRY

1.4.1 TAKAFUL INDUSTRY GROWTH

1.4.2 CURRENT STATUS OF TAKAFUL INDUSTRY

1.5 COMPARISON BETWEEN TAKAFUL AND INSURANCE

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2.0 THE CONCEPT OF HIBAH

2.1 HIBAH IN DEFINITION

2.2 ADVANTAGES OF HIBAH

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3.0 HIBAH IN THE TAKAFUL INDUSTRY

3.1 HIBAH IN TAKAFUL

3.2 TAKAFUL IKHLAS SDN BHD

3.2.1 MODEL OF TAKAFUL IKHLAS

3.3 THE ISSUES OF HIBAH IN TAKAFUL INDUSTRY

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4.0 CONCLUSION 27

5.0 RECOMMENDATION 28

BIBLIOGRAPHY 29

APPENDICES 30

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ACKNOWLEDGEMENT

Assalamualaikum w.b.t

First and foremost, Alhamdulillah, praise be to Allah S.W.T, The Might for giving us

good health and strength to undergo and complete our assignment successfully. In

completing this assignment, there are many parties who kindly give us their

cooperation and guidance. Firstly, we would like to express our appreciation to

Knowledge Management Centre (IBFIM) and Takaful Ikhlas Sdn Bhd for giving us an

opportunity to get many valuable knowledge and experience.

Our gratitude also goes to our lecturer Ustaz Khairul Anwar Ahmad for his kindly

moral support and guidance. We also wish to express our sincere appreciation to

Ustaz Ahmad Termizi Bin Mohamed Din, Executive, Shariah Compliance Department

of Takaful Ikhlas Sdn Bhd for his advice and guidance.

Lastly, special thanks to our family and friends for their pray, encouragement, care

and full support. Finally, we would like to say our deepest gratitude to all people

around us for those who are involved directly or indirectly in completing this

assignment.

Truthfully,

FARAH SULASTRY BINTI SUHAIMI

NUR ATIQAH BINTI ZAKARIA

ROSWAHIDA BINTI AHAMAD SHUBELI

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1.0 INTRODUCTION

Takaful is not a new concept. In fact, it has been practiced by Muslim

communities for the longest time ever. The objective of takaful is to guarantee to help

each other. The concept of takaful (Islamic insurance), where resources are pooled

to help the needy does not contradict Shari’ah principles.1 It is in line with the

principles of compensation and shared responsibilities among the community.

Basically takaful is a mutuality arrangement among the community members. And

the cooperative takaful way is seen as the unique alternative to avoid the elements of

gharar (uncertainty), riba (interest) and maisir (gambling), which makes conventional

insurance not acceptable to Muslim scholars.2

Some Muslims believe insurance is unnecessary, as society should help its

victims. Muslims can no longer ignore the fact that they live, trade and communicate

with open global systems, and they can no longer ignore the need for banking and

insurance. The demonstrates of how early clerical apprehensions were overcome to

create pioneering Muslim-friendly banking systems, and applies the lessons learnt to

a workable insurance framework by which Muslims can compete with non-Muslims in

business and have cover in daily life. It uses relevant Quranic and Sunnah extracts,

and the arguments of pro- and anti-insurance jurists to arrive at its conclusion that

Muslims can enjoy the peace of mind and equity of an Islamic insurance scheme.3

1.1 THE HISTORICAL DEVELOPMENT OF AL-TAKAFUL

Takaful is a growing and fast developing industry. The main reason behind

the introduction and development of takaful is to offer an Islamic and Shari’ah

compliant alternative to conventional insurance.4 Thus, similar to conventional

insurance, takaful is designed to provide protection and indemnity to both individuals

and corporate bodies against loss or hazards to their selves or properties.

Takaful (التكافل) is an Islamic insurance concept which is grounded in Islamic

muamalat (banking transactions), observing the rules and regulations of Islamic law.5

This concept has been practiced in various forms for over 1400 years. Muslim jurists

1 http://www.mifc.com/publication/p.9.10.pdf2 Ibid3 Mohd. Ma’sum Billah, Islamic and Modern Insurance Principles and Practices, Ilmiah Publishers, 20034 Dr. Engku Rabiah Adawiyah Engku Ali, Essential Guide To Takaful (Islamic Insurance), CERT, 20085 What’s Takaful: A Guide To Islamic Insurance, 2008

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acknowledge that the basis of shared responsibility in the system of aquila as

practiced between Muslims of Mecca and Medina laid the foundation of mutual

insurance.

Human society has in fact, practiced ‘insurance’ in one form or another since

time immemorial. The concept of protection against loss by natural hazard has been

tracked back by some historians to at least 215 B.C, when the Roman Government

were required by suppliers of military stores all risk of loss, arising from the attack of

enemies or from storms, to the supplies which they placed in the ships.

One the other hands, some people consider that it was the Pharaoh of Egypt

who invented the insurance principle when, on the advise of the Prophet Joseph, the

directed the latter to store grain in the years of abundance to meet the demand the

lean years.6

Similarly, each Arab ethnic group tied by blood ties considered the loss of any

individual member, including his liability towards the payment of blood money, as its

own and was obliged by custom and tradition to come to his rescue and take suitable

measures to give rise cover such loses or liabilities collectively.7 This took the form of

mutuality and gave rise to the custom of losses being share by the group as a whole.

Furthermore, Islamic societies have always collectively assisted their members, both

in cash and kind, when they have been required to incur some unusual or additional

expenditure on deaths, births, marriages, etc. All the above practices mutual

assistance can be considered as origin forms of insurance.

1.1.1 DEFINITION

Takaful is derived from the Arabic root-word “ kafala “, a verb, which means

guarantee , bail , warrant or an act of securing one’s need.8 Therefore, takaful (in its

give and take form) means joint guarantee, whereby a group of participants agree to

mutually guarantee each other against a defined loss. In the context of Islamic

insurance, takaful refers to an arrangement for mutual indemnity in providing

protection and compensation to the participants who suffered from perils or hazards.9

6 Note of Takaful From Ustaz Ali Jinnah7 Ibid8 Dr. Engku Rabiah Adawiyah Engku Ali, Essential Guide To Takaful (Islamic Insurance), CERT, 20089 Ibid

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According to Section 2 of the Malaysian Takaful Act 1984:

“ Takaful is a scheme based on brotherhood , solidarity and mutual

assistance which provides for mutual financial aid and assistance to the participants ,

in case of need whereby , the participants mutually agree to contribute for that

purpose “ .10

1.1.2 PRINCIPLES OF TAKAFUL

The principles of Takaful are as follows:

Policyholders cooperate among themselves for their common good.

Every policyholder pays his subscription to help those that need assistance.

Losses are divided and liabilities spread according to the community pooling

system.

Uncertainty is eliminated in respect of subscription and compensation.

It does not derive advantage at the cost of others.

1.2 TREND IN TAKAFUL INDUSTRY

1.2.1 KEY TRENDS IN THE TAKAFUL LANDSCAPE

Takaful as a Key Institutional Investor:11 Islamic funds have found their appeal with

retail and HNW individuals, but institutional investors (including Islamic pension

plans) are bound to grow in importance. This implies more sophisticated

requirements: greater diversification, longer track records and heavier scrutiny of

risk-adjusted returns. The arrival of takaful assets foretells a second wave of growth

for Islamic funds, with a greater focus on Shari’ah-compliant products than the

current driver of GCC liquidity (which doesn’t necessarily seek Islamic products

exclusively).

Takaful as a Driver of Discretionary Portfolios:12 While demand for pooled vehicles

will remain strong, more operators would seek to customize their portfolios via

segregated accounts, a common trend in the SRI industry.  In fact most SRI assets

are placed not in mutual funds but rather in discretionary portfolios (92% in the US

and 79% in Europe). Furthermore, the size of takaful operators would not always

justify an in-house asset management team, prompting outsourcing of several

10 Malaysian Takaful Act 198411 Comparative Study of Insurance and Takaful (Islamic Insurance), Muhammad Anwar, 17 March 200612 Ibid

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components to specialized firms (i.e. for allocations into real estate, alternatives, etc).

This could also widen the demand for fund of funds programmers as a more

standardized alternative.

Takaful as a Fully-Compliant Investor:13 Despite the above comparison to SRI (global

assets at approximately USD2.3 trillion), takaful operators will fully allocate into

Shari’ah-compliant instruments, making their impact far more prominent.

Conventional insurance/pensions are not required to fully invest in SRI, and in some

cases these are marginal allocations. Takaful, on the other hand, also has much

more elaborate requirements (Shari’ah screening and compliance), whereas 80% of

SRI screening is focused purely on tobacco and alcohol exclusion. In this sense

takaful must not only seek a few compliant products but take a portfolio-wide

approach that tackles all asset classes.

Takaful as a Source of Product Demand:14 While the growth and issuance of sukuk

seems to grab more headlines than takaful, the two go hand in hand. In fact, sukuk

can be regarded as being driven by product supply (especially from government and

government-linked issuers), whereas takaful exemplifies product demand (and fixed

income being the most prominent product gap). What remains to be seen is whether

the appetite of takaful is strong enough for it to allocate into products with shorter

track records (such as emerging markets and alternative products). Furthermore,

conventional insurance allocates extensively to balanced funds, and the demand for

these mixed-asset funds should also be expected from takaful investors.

1.2.2 SIGNIFICANT TREND IN TAKAFUL INDUSTRY

First

There has been a significant momentum in terms of growth and participation

of takaful players in the global market. With its rapid annual growth of between 15-

20%, the global takaful industry is one of the fastest growing components of the

insurance market.15 Based on the 2007 Oliver Wyman Report, the potential premium

for takaful worldwide, is at least USD20 billion annually, while the current figures for

premium is estimated at USD4 billion. The report also estimates that up to 20% of the

takaful revenues originated from non-Muslim customers. The strong growth was also

13 Ibid14 Ibid15 Article about Takaful (Bank Negara Malaysia) Assistant Governor's Keynote Address at the International Takaful Summit - "Global Takaful Industry: Moving to the Next Level of Excellence"

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attributed by the increasing number of companies offering takaful services across

jurisdictions. Currently, there are more than 250 takaful operators worldwide. There is

also a growing participation of established conventional players in the takaful and

retakaful industry. There are large conventional players from the UK, US and

Germany that have set-up takaful or Retakaful companies within their groups. This is

an important development. A strong and credible retakaful industry is a crucial

contributor to promote the expansion of the takaful industry worldwide.16

Second

There is a growing global demand for takaful products following the

phenomenal growth of various components in the Islamic financial system particularly

the Islamic banking sector and the Islamic capital market. The advancement by both

sectors contributed towards the strong growth of takaful and retakaful industry.17 For

instance, the tremendous growth of Islamic financing and mortgages provide natural

demand for mortgage protection takaful covers as part of the package to complement

Islamic financing products. The increasing popularity of sukuk issuance also provides

great support to the growth of the takaful industry. The issuance of more sukuk with

longer tenure to match investment and risk management of longer-term liability would

spur the growth of the investment-linked takaful products. The upside on this is

takaful has a ‘natural constituent' for it to grow further in the future.

Third

Much progress has also been achieved in the regulatory sphere in the last

two years. The Islamic Financial Services Board (IFSB) has established a joint

working group with the International Association of Insurance Supervisors to develop

standards applicable to takaful operators.18 IFSB have made significant progress in

this initiative, including issuance of concept paper on the regulation and supervision

of takaful entities. Further, the IFSB working group is in the midst of finalizing an

exposure draft on corporate governance standards for the takaful industry. The

corporate governance standard will cover key issues in the takaful business including

rights and obligations of stakeholders in takaful operations and risks ownership.19

IFSB has also set up a working group on solvency in takaful business. This will

further improve comparability between takaful companies, promote harmonization of

practices and give more confidence to the industry as a whole. These are certainly

16 Ibid17 Ibid18 Ibid19 Ibid

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positive developments for takaful industry, to be recognized as an emerging

component in the mainstream global financial system.

1.3 MODEL OF TAKAFUL

1.3.1 GENERAL TAKAFUL MODELS

A general takaful business can use any of the operational models as example

mudarabah, wakalah , or waqf models . The most popular models for general takaful

in Malaysia are perhaps the modified mudarabah and modified wakalah models. The

reason being, general takaful operation is normally a short-term arrangement and the

risks under coverage are generally inherent.20

1. General Takaful Operation – Mudarabah Model

Under the pure mudarabah model, there will not be any sharing of the net

underwriting surplus. In this model , the sole source of income to the takaful operator

will be the mudarabah investment profits as inadequate and do not commensurate

with their efforts in managing the takaful operation .21 This may deter the takaful

operator from opting for the pure mudarabah model and go for the modified

mudarabah.

Under the modified mudarabah model, the participants contribute to the

general takaful fund by way of donation or tabarru’.22 The participants then appoint

the takaful operator to be their manager to invest the fund by way of a mudarabah

contract. All the investment profits are channeled back into the takaful fund. At the

same time, the takaful fund is used to pay claims and other expenses, such as, re-

takaful and reserves. The net surplus (inclusive of the mudarabah investment profits)

is treated as “mudarabah profits“, which are to be shared between the takaful

operator and the takaful participants at the agreed profit sharing ratio.

2. General Takaful Operation – Wakalah Model

Under the wakalah model for general products, the participants as a group

appoint and authorize the takaful operator to be their agent (wakil) to manage the

20 Dr. Engku Rabiah Adawiyah Engku Ali, Essential Guide To Takaful (Islamic Insurance), CERT, 200821 Ibid22 Ibid

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general takaful fund.23 The takaful operator will be the participants’ agent (wakil) for

both the “insurance” as well as investment activities. A wakalah fee is charged for the

takaful operator’s efforts. If the takaful operator is not charging anything else over

and above the original wakalah fee, this is considered as a “pure wakalah model “.

However, if the takaful operator is charging an additional “performance fee” as a

percentage of the net underwriting surplus, this is considered by some to be a

“modified wakalah model“.

Under the modified wakalah model, the participants contribute to the general

takaful fund by way of donation or tabarru’.24 The participants then appoint the takaful

operator to be their agent (wakil) to manage their insurance and investment activities

of the takaful fund. The operator is remunerated with an up-front wakalah fee. All the

investment profits are channeled back into the takaful fund. At the same time, the

takaful fund is used to pay claims and other expenses, such as, re-takaful and

reserves. The net surplus is to be returned to the participants after deducting an

agreed percentage as “performance fee” for the takaful operator.

1.3.2 FAMILY TAKAFUL MODELS

Similar with general takaful, family takaful also has a variety of operational

models. Some takaful operators use mudarabah model, while others use wakalah

model, or waqf model.25 In addition to the basic model, some family takaful models

also have additional features to better serve the various specific needs of participants

and make the products more competitive or efficient. For, example, the inclusion of

some “riders“, the “drip” features, “takaful-link” or unit-linked.

1. Family Takaful Operation – Mudarabah Model

The earliest model for family takaful in Malaysia is the mudarabah model.26 In

practice, takaful schemes in Malaysia normally use pure mudarabah or wakalah

model for the PA, while the modified mudarabah or modified wakalah / ji’alah is used

for the PSA.

23 Ibid24 Ibid25 Ibid26 Ibid

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Under the pure mudarabah model, the participants contribute to the Family

Takaful Fund for two main purposes: saving / investment; and donation.27 The saving

and investment will be credited into the PSA. The PA belongs to the participants. The

PSA belongs to the family takaful risk fund. Both PA and PSA will be invested in

Shari’ah compliant investments by the takaful operator. Any investment profits will be

shared between the participants and the takaful operator according to pre-agreed

profit-sharing ratio. The PSA will also be used to pay claims, reserve and others. Any

net underwriting surplus will be returned to the participants. The PA will be

accumulated and then paid together with the coverage amount from the PSA to the

participants or rightful recipients upon maturity or claim.

2. Family Takaful Operation – Wakalah Model

In a family takaful operation that uses the wakalah model, the participants still

contribute to the Family Takaful for the two main purposes of saving / investment and

donation.28 Similar with the mudarabah model, the saving/ investment portion will be

credited into the PA, and the donation portion will be credited into the PSA. However,

when the takaful operator manages the Family Takaful fund, it is done on the basis of

wakalah (agency contract) for which, a fee is charged by the takaful operator.

Here, all underwriting surplus and investment profit belong to the participants/

policyholders, with charges inclusive of investment management fee being taken as

income to the operator. These charges can take many forms, and could include

incentive compensation. It is the structure of these charges that can greatly change

the risk profile of the operator.

1.3.3 THE CONCEPT AND WORKING SYSTEM OF TAKAFUL

As a concept, insurance actually does not contradict the practices and

requirements of the Shari’ah. In essence, insurance is comparable to the system of

mutual help in relation to the tradition of blood money under the Arab tribal customs.

It is the pooling of common resources to help the needy , a scheme which is very

much in line with the principle of compensation and shared responsibility among the

community , as practiced between the Muhajirin of Mecca and the Ansar of Medina ,

27 Ibid28 Ibid

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following the Hijra of the Prophet (PBUH) over 1400 years ago .29 In fact, Muslim

jurists acknowledge that this practice laid the foundation of mutual insurance.

However, Muslim jurists have generally accepted that the practice and

operation of conventional insurance, in its present form, do not conform to the rules

and requirements of the Shari’ah. In June 1972, The National Fatwa Committee of

the Malaysian Islamic Affairs Council resolved that the present-day life insurance

business provided by the conventional insurance companies was not in line with the

principles of Shari’ah. Similarly, in a comprehensive deliberation, The Fiqh Academy

of the Organization of Islamic Conference (OIC), at its meeting in December 1985,

resolved that no forms of insurance ( life or general ) conformed to Islamic

principles .30

According to the jurists, insurance business is based on a buy-and-sell

contract which does not fulfill the characteristics of a buy-and-sell contract according

to Islam, because of the presence of the following elements in the insurance contract.

1.4 GROWTH IN TAKAFUL INSUSTRY

The growth in Takaful business in Malaysia has been impressive. Starting

from a low base in 1994, the annualized average growth used to be in the order of

92% in Family Takaful and 34% in General. Since 1998, the growth rate has slowed

down to around 30% in Family Takaful and 17% in General.31 In Family Takaful the

products sold were individual and group term and savings products, mortgage

policies and pension plans. In General takaful all classes of business were sold.

29 Directory of Islamic Insurance (Takaful) 2000, Institute of Islamic Banking & Insurance

30 Ibid31 Position of The Takaful Industry in Malaysia, Takaful expected to constitute 20 percent of total

insurance market by 2010. – Islamic finance news

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TABLE 1: Growth of Takaful in Malaysia

US$m Family

Takaful

%

Increase

General

Takaful

%

Increase

Total

Takaful

%

Increase

1998 55.0 36.6 91.6

1999 70.0 27 % 42.7 17 % 112.7 23 %

2000 93.2 33 % 49.8 17 % 143.0 27 %

Exchange rate RM2.43 to $ (1997 prices)

A greater awareness of Takaful system is achieved

More Takaful companies are set up and run professionally

More global coverage is secured through international companies' network

and the use of modern IT technology

Sale through banks

Companies are well capitalized and demonstrate secure haven for the funds

Retakaful capacity with triple A rating is available

Other factors were also taken into account such as literacy levels in each country and

the take up rates for takaful products as opposed to conventional products.

GRAPH 1

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Twenty-seven countries were selected where most of the demographic and

insurance statistics was available. It was estimated that the global takaful premium

could be in the region of US$7.4 billion in 15 years' time, growing at nearly 20% per

annum.32 This is not an unachievable task when we have Malaysian takaful business

growing at 60% pa and the Middle East at 10%. With concerted effort on part of the

Takaful operators worldwide, a growth of 20% pa should be very much possible.33

1.4.1 TAKAFUL INDUSTRY GROWTH

The Takaful industry has grown significantly as the Islamic alternative to

conventional insurance and has evolved from being a regional business to a global

one. The renaissance in Socially Responsible Investing (SRI) and customer demand

for Shariah compliant solutions has enhanced the community banking appeal of

Takaful-related products.34 Major markets currently include Malaysia, Iran, Pakistan,

Saudi Arabia and other GCC countries. Annual average individual market growth

rates range between 15% and 30%. The Takaful product family spans across

general, life, health and pensions business lines.

The two main business models used in the Takaful industry are the

Mudharabah and the Wakalah models. The Mudharabah model is commonly used in

Malaysia and involves the Takaful operator managing the operation in return for a

share of the surplus on underwriting and a share of profit from investments.35 The

Wakalah model is more prevalent in the Middle East region. In this model, the

Takaful operator acts as an agent (Wakeel) for the participants, and manages the

Takaful/re-Takaful fund in return for a defined fee.36

The global Takaful industry is relatively small in comparison to its

conventional insurance counterpart and the current Takaful market size is estimated

between US$2.5 billion (RM9.18 billion) to US$3.5 billion (RM12.85 billion) of annual

premium. It needs to gain critical mass, build worldwide brand recognition and

exceed performance standards set by the conventional insurance industry. There are

only a few international Takaful suppliers. The major challenges faced by the national

and cross-border Takaful suppliers include raising customer awareness and

education; expanding product innovation, creative product design and marketing;

32 Ibid33 Ibid34 Malaysian Islamic Finance Issuers and Investors Forum 2006, Sohail Jaffer

35 Ibid36 Ibid

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gaining brand recognition; offering attractive investment choices for customers in

family Takaful linked investment plans; intelligently deploying technology to enhance

customer experience and overall consumer satisfaction levels; finding an AAA-rated

international reinsurance company willing to accept a re-Takaful solution, offer

individual risk-bearing capacity; and widening penetration of bank and alternative

distribution channels.

The Takaful industry has been successful in distributing products through its

agency sales force, direct channel, e-commerce and, to a limited extent, via certain

retail banks.37 Product customization for the different bank channels (retail, mass

affluent, private banking), customer referrals and gaining brand loyalty are important

critical success factors. Product packaging, customer convenience, customer care

and transparency of product terms, conditions and pricing are also important

catalysts to increase the share of the Takaful business across multiple distribution

channels. For family Takaful linked investment plans, an open investment

architecture platform is important for the retail banking channel. Clearly the ability to

tailor suitably diversified risk reward investment portfolios, select top quartile

performing funds from major international brands and control defined portfolio risk

levels are powerful drivers for the retail value proposition. Furthermore, the product

certification by an independent Shariah board of experts and ongoing compliance

monitoring with high ethical standards has favorably impacted transparency,

disclosure of different terms and conditions, charges and frequency of reporting.

Several enterprising banks have included banc assurance in their product

offerings, and some of the new Takaful operators are offering certain general Takaful

products online. The distribution of Takaful life and savings products through bank

channels is relatively new, but the sales process through the branch banking network

has been facilitated by the advent of web-based point of sale and online

administration systems.38 In addition to the benefits of customer convenience, the

“white label” advantage of using own brand equity, transparency of product terms

and conditions, open investment architecture and efficient online processing has all

proved attractive to major bank distribution partners.

37 Ibid38 Ibid

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1.4.2 CURRENT STATUS OF TAKAFUL INDUSTRY

The current size of the takaful market based on 2005 figures is US$4.3 billion

of premium contributions from about 107 companies if windows are strictly excluded.

The industry is characterized by:

• Lack of statistics & information;

• Takaful operators are mostly new companies, local and small-sized players;

• Lack of market research and R&D;

• Lack of expertise & standardization;

• Limited investment opportunities;

• Heavy reliance on conventional reinsurance.

1.5 COMPARISON BETWEEN TAKAFUL AND INSURANCE

ParticularsConventional

insuranceMutual insurance Takaful

Responsibility

for

providing

protection

Risk is transferred

from the insured to

the insurer

Mutual risk sharing

amongst members

Mutual risk sharing amongst

participants

Governing lawSecular law and

regulation

Secular law and

regulation

Secular law and regulation and

Shari’ah law

OwnershipShareholders of

insurance companyMembers Participants

Contract formsBilateral insurance

policy

Bilateral insurance

policy

Wakala (agency) / mudarabah

(trust financing) agreement and

unilateral contracts based on

principles of Tabarru’

(donation)

Investment No restrictions on No restrictions on All investments to be in

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equity/debt

investments

equity/debt

investments

accordance with Shari’ah

principles – excludes all debt

and some equity investments

Liability of the

operator

The insurance

company (and

ultimately its

shareholders) are

responsible for any

claims payments

The members of the

mutual are

collectively

responsible for the

payment of claims

and may be asked to

contribute in the

event of shortfall

The participants are collectively

responsible for the payment of

claims and may be asked to

contribute in the event of

shortfall if the Takaful operator

does not provide Qard Hasan

(interest free loan)

Surplus in

operational

income

Ultimately for account

of shareholders

For account of

membersFor account of participants

2.0 THE CONCEPT OF HIBAH

2.1 HIBAH IN DEFINITION

Hibah is a gift. This is a token given voluntarily by a debtor to a creditor in

return for a loan. Hibah usually arises in practice when Islamic banks voluntarily pay

their customers a 'gift' on savings account balances, representing a portion of the

profit made by using those savings account balances in other activities.39

It is important to note that while it appears similar to interest, and may, in

effect, have the same outcome, Hibah is a voluntary payment made (or not made) at

the bank's discretion, and cannot be 'guaranteed.'40 However, the opportunity of

receiving high Hibah will draw in customers' savings, providing the bank with capital

necessary to create its profits; if the ventures are profitable, then some of those

profits may be gifted back to its customers as Hibah. And Hibah also defined as the

transfer of existing properties made voluntarily and without any consideration by the

Donor to the Donee and accepted by or on behalf of the Donor during their life time.41

39 Undang-undang Harta dan Amanah, Akmal Hidayah Halim, IBFIM40 Ibid41 Ibid

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“….and gives his wealth in spite of love for it, to the kinsfolk, to the orphan and to Al-

Masakin (the poor), and to the wayfarer and to those who ask...”

(Verse 177, Surah al-Baqarah)

“What is wrong with men who give their sons gifts and then keep them and if the son

dies, they say, ‘My property is in my possession and I did not give it to anyone.’ But if

they themselves are dying, they say, ‘It belongs to my son, I gave it to him.’

Whosoever gives a gives, and does not hand it over to one to whom it was given, the

gifts is invalid, and if he dies it belongs to the heirs in general.”

(Narrated from Abdullah Ibn Umar; Abdullah Ibn Abbas)

“The Prophet (Pbuh) said: It is not lawful for a man to make a donation or give a gift

and then take it back, except a father regarding what he gives his child. One who

gives a gives and then takes it back is like a dog which eats and vomits when it is full,

then returns to its vomit...”

Thus it is necessary to emphasize at the outset that the takaful business as

practiced in Malaysia is of the kind of cooperative takaful (al-takaful al-taawuni)

participated by a group of members of the public for their own cause within the

domain of the private sector.42

2.2 ADVANTAGES OF HIBAH

The hibah property will not be part of the original owner because the contract

concluded that the transfer of the property to the beneficiaries is legal. The person

who gives his property as hibah will be protected against any legal action from

creditors on the particular wealth.43

In Malaysia, there are few corporate and professional bodies that provide the

consultation on how to manage our financial planning, one of them is Darul Hibah

Consultant Sdn. Bhd.44 The person who dealing with hibah will not facing with any

42 Nomination and Hibah Issues in the Takaful Industry, Azman Bin Ismail, ISRA Shari’ah Conference on Takaful 200943 Ibid44 Panduan Wakaf, Hibah dan Wasiat Menurut Al-Quran dan Sunnah, Sheikh Muhammad Bin Shalih Al-Utsaimin, 2008

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difficulties in completing hibah transaction. It won’t take long time compared to

documentation completing faraid matters.

Hibah can eliminate the problem of quarreling among he beneficiaries in

claiming the ownership of the property.45 The owner of property has full rights to

transfer any amount of his wealth to anybody; his legal heirs or not. Hibah has no

limitation as Faraid and wasiyah. Faraid is strictly distributed to legal heirs only and

wasiyah cannot be distributed to any family member in legal heirs, and at maximum

of 1/3 only.

3.0 HIBAH IN THE TAKAFUL INDUSTRY

In takaful industry, hibah concept is used in several family takaful products in

which participants could give hibah in the form of assigning the takaful benefit to the

nominee or hibah recipient. In order to eliminate the element of uncertainty in the

takaful contract, the concept of ‘tabarru’ (to donate, to contribute, to give away) is

incorporate in it.46 In relation to this a participant shall agree to relinquish as tabarru’ ,

certain proportion of his takaful installments or takaful contributions that he agrees or

undertakes to pay thus enabling him to fulfill his obligation of mutual help and joint

guarantee should any of his fellow participants suffer a defined loss.47

In essence, tabarru’ would enable the participant essence, tabarru’ would

enable the participant who might suffer a loss or damage due to a catastrophe or

disaster. The sharing of profit or surplus that may emerge from the operations of the

takaful, is made only after the obligation of assisting the fellow participants has been

fulfilled.48 It is imperative, therefore, for a takaful operator to maintain adequate

assets of the defined funds under its care whilst simultaneously striving prudently to

ensure the funds are sufficiently protected against undue over-exposure.

3.1 HIBAH IN TAKAFUL

There are several products that adopt the concept of takaful hibah. Hibah

implemented the takaful is in two forms:

45 Ibid46 TAKAFUL (Islamic Insurance), Concept and Operation System, From The Practitioner’s Perspective, 1996 BIRT 47 Ibid48 Ibid

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A. Hibah an Existing49

Hibah something that is either in the form:

(a) Hibah through Takaful Products

Hibah is done by the takaful participants who are required to nominate

hibah recipients as participants and takaful provider hibah takaful contributions as

taxpayers. There are several facilities that offer takaful products such as Iqra’ by

Takaful Nasional Sdn. Ltd, Students and Education by Syarikat Takaful Malaysia

Berhad and Youth Plan by Takaful Ikhlas Sdn Bhd. This product is only offered to

parents who a son. (Student Brochure Takaful, Education and Iqra'). The total

amount outstanding in the accounts of participants will be subject possessions syara’

to the laws that have been discussed previously. That will benefit all results obtained

from the participant's participation as one of the takaful participants will is he owned.

Hibah in this type must not conflict with any rule of law because syara’ and conditions

can be implemented.

(b) To Hibah Participants Takaful.

Takaful Fund management through Tabarru’ wills hibah something to

participants as a reward above a certain success achieved by the participants.

Hibah in this type is clear and not in conflict with the principles of syara’ because all

the harmonious and conditions can be met.

B. Hibah will find something and Effective Death After participants.50

Hibah was meant here is benefit takaful nominee to the specified by the

takaful participants through beneficiary form. This type of Hibah has long debated by

local contemporary scholars widely. Cause of disagreement between them is

because of the following:

(a) Hibah something that did not even exist.

(b) al-Qabd Troubleshooting

(c) Status of takaful benefit.

(d) Who's Right takaful benefit.

49 Article: Implementation Of Business In Industry Takaful: Kind And Command , Abdul Razak Bin Mohd

Zamerey (Takaful Ikhlas Sdn. Ltd.) & Shofian Ahmad Department of Shariah, UKM 50 Ibid

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(e) Law-related to Testament and Faraidh.

3.2 TAKAFUL IKHLAS SDN BHD

3.2.1 MODEL OF TAKAFUL IKHLAS

In line with international and local developments in the practice of Islamic financial

protection services, Takaful IKHLAS has adopted the Wakalah contract as our

system and have modelled our operations accordingly. Wakalah is a form of

representative relationship between Takaful IKHLAS and a participant

(Principal/Customer).

Takaful IKHLAS employs the following contracts to govern our business:

Tabarru’ is a contract where the participant agrees to donate a pre-

determined percentage of contribution to the Risk Fund to provide assistance

to fellow participants.

Wakalah is a contract where the participant authorises Takaful IKHLAS to

conduct the affairs of Takaful business i.e providing protection, investment

etc. on his/her behalf.

Takaful IKHLAS Model allows the use of intermediaries as a medium to better

serve the customers’ needs, payment of surpluses and profits, where

applicable to participants and calculation of shared benefits on a monthly

basis.

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Note:

For GRIA, a portion of the contribution in the investment account is set aside for

Tabarru’ at the onset which will be dripped to the Risk Fund (RF). Any investment

income derived from this amount in the investment account shall be allocated to the

Risk Fund (RF). In this instance, IKHLAS will not charge a fund management fee (%).

Net surplus distribution will be allocated and administered on an annual basis. The

way that they selected which one to be invested into fund with see in which one gain

high return and it will also have the high risk of that fund.

Contract in Islamic divide into four categorize:-

1) Grant of ownership

Grant of ownership is divided into two namely:

a. Muawadhah means exchange contract

b. Tabarru' means thing given without any exchange

Under the part of tabarru', there are 4 main concept which is ,

a) Gift (hibah)

b) Infaq

c) Alms (sadaqah)

d) Donation

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2) Partnership

3) Reserve and care (Wadiah)

4) Representation (Wakalah)

There are two types of Hibah that applied in Takaful Ikhlas Sdn Bhd which is;

i. for its takaful benefit ( surplus )

Hibah in tabarru' is use when there is Surplus Administration Charge (SAC).

When it is come to surplus, takaful will put a charge on it. If takaful did not put

a charge on it, it will go to the participant account back through hibah to the

account ta’awuni.

ii. for when there is death

The second point of hibah in takaful industry happen is when death occurred.

The participants have to fill 2 forms namely;

a) Required Takaful Act Form (Borang Wajib Akta Takaful)

b) Nominee Form (Borang Penama)

Under the nominee form, those persons were already named, the property

would not be awarded to his/her but they are just appointed to manage the

property for the dead people. Furthermore, the property will be distributed

according to 'faraid'.

The 2 types of form above are compulsory to fill up but there is another form

that issued by Takaful Ikhlas itself called Hibah Suggestion Form (BORANG

CADANGAN HIBAH). This form is issued to the participant to propose name/s for

recipient of hibah. The recipient of hibah is among parents, legal couple (husband

and wife), biological child and sibling only. This form is not compulsory to fill up by

the participants.

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3.3 THE ISSUES OF HIBAH IN TAKAFUL INDUSTRY

Generally, any asset in its tangible form or in the form of its benefit (usufruct)

can be given as hibah to another party. The issues that arise are:

1. Whether takaful benefits qualify as an asset for hibah?

2. Whether the status of hibah changes to will (wasiah), if the participant dies,

since the transfer of the assets ownership would take place after the death of

the donor?

3. Whether a participant can revoke the hibah, before the maturity of the takaful

certificate?

4. What is the implication, should the recipient of the hibah die before the

maturity of the takaful certificate?

The Council, in its 34th meeting, held on 21st April 2003 / 19 Safar 1424, resolved

that

1. Takaful benefits can be used for hibah, since it is the right of the participants.

Therefore, the participants should be allowed to exercise their rights,

according to their choice. as long as it does not contradict the Shari’ah

2. The status of hibah in takaful plan does not change into a will (wasiah), since

this type of hibah is a conditional hibah, in which the hibah is an offer to the

recipient of hibah for only a specified period. In the context of takaful, the

takaful benefits are both associated with the death of the participant, as well

as maturity of the certificate. If the participant remains alive on maturity, the

takaful benefits are owned by the participant, but if he dies within such period,

then the hibah shall be executed

3. A participant has the right to revoke the hibah before the maturity date,

because conditional hibah is only deemed to be completed after delivery is

made (qabdh)

4. A participant has the right to revoke the hibah to one party and transfer it to

other parties or terminate the takaful participation, if the recipient of the hibah

dies before maturity

5. The takaful nomination form has to be standardized and must stipulate clearly

the status of the nominee, either as a beneficiary or an executor (wasi) or a

trustee. Any matter concerning distribution of takaful benefits must be based

on the contract. Participants should be clearly explained on the implication of

every contract being executed.

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The next issue is whether participants can give away the takaful proceeds as

hibah. The takaful proceeds are made up of either the participant’s contribution in

his/her investment account or the risk account pooled from participants’ tabarru’

portion. Under the shariah, the takaful proceeds from the investment account may be

given away as hibah as it is the property of the participant, but what is the status of

the tabarruc portion? It seems that there are differing opinions on this. Some takaful

operators do not allow takaful proceeds in general to be given as hibah and

participants do not have this option. Presumably their shariah committees have not

approved that the proceeds be given away as hibah. One possible argument for this

is that the takaful proceeds are non-existent at the time when the hibah is executed.

According to jurists, when the object of gift is non-existent at the time the hibah is

executed, the contract is void.

On the other hand, giving away takaful proceeds as gifts will definitely brings

greater benefit as the participant need not pay for a higher contribution and the

possibility of it leading to dispute, hatred, and devouring others’ wealth wrongfully is

very small. Indeed the Shariah Advisory Council of Bank Negara Malaysia has rightly

resolved that, “Takaful benefit can be used for hibah since it is the right of the

participants. Therefore, the participants should be allowed to exercise their rights

according to their choice as long as it does not contradict with shariah.” Dallah Al

Barakah has also come to the same conclusion although the rationale was different.

It states, “It is permissible to distribute the (takaful) death benefit according to the law

of mirath (Islamic law of succession), as it is also permissible to distribute the

payment to a particular individuals or parties as specified by the participant on the

basis that the benefit is the contribution of other participants to the beneficiary as

specified by the participant and not his estate.” In financial planning, estate planning

plays an important role and hibah is a very simple yet powerful that can be used.

A consequential issue to the hibah concern is whether the hibah of the takaful

proceeds can be revoked. In this respect, we need to consider the legal framework of

the particular country in which takaful operates as it will affect the legality of the hibah

and any jurisprudential opinion must give due consideration to it. This philosophy is

aptly captured by Imam Ibn Qayyim al-Jawzi when he said, “Changes in fatwa are

evaluated by changes in time, places, conditions and customs.” In many countries,

legislation provides protection for spouses and children and in naming them; a

statutory trust in favor of the nominee of the policy moneys payable is created.

Having said that, life insurance is important especially in some jurisdictions as an

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additional means of providing liquid assets to the estate and surviving spouse. It is

usually received by the beneficiary free of income tax and the proceeds can be used

for the payment of estate debts and expenses and for support. The issue of whether

a gift can be revoked has not only attracted the attention of Muslim jurists; in English

law the issue has been the subject of various legal principles, precedents and

legislation. Prior to the Policies of Assurances Act 1867, a life policy was not

assignable in law and although equity always permitted such assignments, the

assignee could only sue to enforce the policy if he joined the assignor in the action

and an insurer cannot obtain a good discharge against payment from assignees

alone. The Act protects legal assignment and the assignee can enforce it in his

name. It can also be assigned under Section 136 of the Law of Property Act 1925 but

a court found that this is not strong enough.

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4.0 CONCLUSION

After going through the models and products currently offered in the market,

we can see that the products offered by the takaful operators are quite similar to that

of conventional insurance, at least in terms of the protection accorded and the rates /

pricing.

The main element that actually differentiates takaful from conventional

commercial insurance is the tabarru’ feature which has been explained earlier.

Following that, the relationship between the participants and the takaful operator has

also changed. The takaful operator is not the insurer anymore. The takaful operator

is just the manager and operator of the takaful scheme.

Nonetheless, confusions and differences of opinion regarding the real

underlying contracts in the various takaful operational models remain. For example,

on the donation side: if it arrangement really tabarru’, then can the proceeds or

money be given back to the donor as tabarru’ is like hibah (gift) or sadaqah (charity) .

Perhaps, the usage of tabarru’ itself should be clearly explained to avoid confusion

as it carries certain connotations. In a conclusion, the underlying concept of tabarru’

in takaful model is different from literal understanding of hibah or sadaqah . It is

actually a commitment to donate with a condition of compensation. All in all, the

takaful industry is still very much in the development stage, with new model

variations emerging regularly.

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5.0 RECOMMENDATION

What has been attained so far is comparatively small, but as shown from the

performance of takaful operators generally, is growing rapidly. Considering only a tiny

percentage of the ummah have some form of life insurance cover, the potential for

takaful to penetrate deeper into the market is tremendous. In this context family

takaful products would have a strong chance to grow and expand. Therefore takaful

is here to stay.

However, the future of takaful would depend on the ummah. Whether takaful

would develop into an industry and eventually become the real insurance alternative

for the ummah would depend on the commitment and political willingness of the

Muslims at the individual, community, national and international levels. What is

urgently needed is the practical translation of these commitment and political

willingness by all.

The time for polemic is past; it if no more discoursing on the basic issue of

'halal' or 'haram'. The way forward is on improving, correcting and developing the

existing operational structure, which has been generally accepted to be essentially

based on   either the principles of Al-Mudharabah or Al-Wakalah. It is clearly

demonstrated that in countries where there is commitment and strong political

willingness plus the application of modern management practices in its approach,

countries have seen their takaful operations grow into a viable and profitable

business venture.

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BIBLIOGRAPHY

1) Article: Implementation Of Business In Industry Takaful: Kind And Command ,

Abdul Razak Bin Mohd Zamerey (Takaful Ikhlas Sdn. Ltd.) & Shofian Ahmad

Department of Shariah, UKM

2) TAKAFUL (Islamic Insurance), Concept and Operation System, From The

Practitioner’s Perspective, 1996 BIRT

3) Directory of Islamic Insurance (Takaful) 2000, Institute of Islamic Banking &

Insurance

4) http://www.mifc.com/publication/p.9.10.pdf

5) Mohd. Ma’sum Billah, Islamic and Modern Insurance Principles and Practices,

Ilmiah Publishers, 2003

6) Dr. Engku Rabiah Adawiyah Engku Ali, Essential Guide To Takaful (Islamic

Insurance), CERT, 2008

7) What’s Takaful: A Guide To Islamic Insurance, 2008

8) Note of Takaful From Ustaz Ali Jinnah

9) Malaysian Takaful Act 1984

10) Comparative Study of Insurance and Takaful (Islamic Insurance), Muhammad

Anwar, 17 March 2006

11) Nomination and Hibah Issues in the Takaful Industry, Azman Bin Ismail, ISRA

Shari’ah Conference on Takaful 2009

12) Panduan Wakaf, Hibah dan Wasiat Menurut Al-Quran dan Sunnah, Sheikh

Muhammad Bin Shalih Al-Utsaimin, 2008

13) TAKAFUL (Islamic Insurance), Concept and Operation System, From The

Practitioner’s Perspective, 1996 BIRT

14) Malaysian Islamic Finance Issuers and Investors Forum 2006, Sohail Jaffer

15) Article about Takaful (Bank Negara Malaysia) Assistant Governor's Keynote

Address at the International Takaful Summit - "Global Takaful Industry:

Moving to the Next Level of Excellence"

16) Position of The Takaful Industry in Malaysia, Takaful expected to constitute

20 percent of total insurance market by 2010. – Islamic finance news

17) Undang-undang Harta dan Amanah, Akmal Hidayah Halim, IBFIM

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TAKAFUL IKHLAS SDN BHD (593075U) Business Operations, 4th Floor, Wisma KT, No 14, Jalan 19/1,47300 Petaling Jaya, Selangor Darul Ehsan. Tel : 03-7801 1288/1488 Fax : 03-7801 1388Website: http://www.takaful-ikhlas.com.my(A Subsidiary of MNRB Holdings Berhad)

APPENDICES

BORANG CADANGAN HIBAH

Saya sebagai Pemilik Sijil bagi pelan takaful yang akan dikeluarkan oleh Takaful Ikhlas Sdn Bhd (kemudian disebut Syarikat) dengan ini mencadangkan kepada Pengurusan Tabungan Akaun Taawuni (TAP) supaya membayar manfaat kematian kepada penama-penama yang disenaraikan dibawah apabila berlaku kematian sebelum sijil takaful ini matang dengan syarat dan terma seperti yang dinyatakan dalam sijil.

A. KETERANGAN MENGENAI PEMILIK SIJIL

Nama Penuh : __________________________________________________________(mengikut K/P)

No. K/P (baru) : ______________________________

B. KETERANGAN MENGENAI PENAMA(Sila gunakan borang yang lain sekiranya penama adalah lebih daripada 5 orang)

No. Nama Penuh (mengikut K/P)

Peratusan Pertalian dengan

Pemilik Sijil

No. K/P (baru)atau Sijil Lahir

Alamat

1.

2.

3.

4.

5.

_________________________ ____________________ Tandatangan Pemilik Sijil Tarikh

Syarat Penerima Hibah:1. Ibubapa2. Pasangan yang Sah3. Anak-anak4. Adik beradik

Pelaksanaan:1. Hibah ini hanya boleh diberikan kepada penerima di atas.2. Pemberi Hibah adalah pengurusan TAP.3. Pengurusan TAP akan membayar manfaat kepada penama

selepas kematian peserta.4. Manfaat kematian sahaja.5. Senarai cadangan penerima manfaat takaful boleh diubah/tukar

bila-bila masa oleh peserta.6. Cadangan terbatal jika penerima yang dicadangkan meninggal

sebelum peserta

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TAKAFUL IKHLAS SDN BHD (593075U) Business Operations, 4th Floor, Wisma KT, No 14, Jalan 19/1,47300 Petaling Jaya, Selangor Darul Ehsan. Tel : 03-7801 1288/1488 Fax : 03-7801 1388Website: http://www.takaful-ikhlas.com.my(A Subsidiary of MNRB Holdings Berhad)

BORANG PENAMANOMINEE FORM

NamaName

No KP Lama / PaspotOld I/C / Passport No

No KP Baru New I/C No - -

Saya sebagai Pemilik Sijil bagi pelan takaful yang akan dikeluarkan oleh Takaful Ikhlas Sdn Bhd (kemudian daripada ini disebut Syarikat) dengan ini mengarahkan pihak Syarikat supaya membayar manfaat takaful dan baki Akaun Pelaburan Peribadi (PIA)/ Akaun Pelaburan Risiko Peribadi (PRIA) yang berhak diterima oleh penama-penama yang dinamakan di bawah apabila berlaku kematian sebelum sijil takaful ini matang dengan syarat dan terma seperti yang dinyatakan dalam sijil.

I, as the Certificate Owner for this takaful plan to be issued by Takaful Ikhlas Sdn Bhd (hereinafter known as the Company) hereby instruct the Company to pay all the Takaful Benefit and Personal Investment Account (PIA)/ Personal Risk Investment Account (PRIA) receivable to the nominees named below upon death before the maturity of this certificates with the terms and condition stated in the certificates.

Bagi Peserta Islam

Kepada penama pertama yang diamanahkan dengan tanggungjawab untuk membahagikan manfaat tersebut kepada waris-waris saya yang berhak mengikut hokum Syarak (faraid) tertakluk kepada Seksyen 65, Akta Takaful 1984 dan mana-mana perintah mahkamah Syariah. Sekiranya penama pertama meninggal dunia terlebih dahulu maka manfaat tersebut hendaklah diserahkan kepada penama yang kedua yang mempunyai tanggungjawab yang sama seperti penama pertama dan seterusnya.

For Muslim Participant

To the 1st nominee which is entrusted with the responsibility to distribute the benefits to my beneficiary who is entitled in accordance with Syariah (Faraid Law) in accordance to Section 65, Takaful Act 1984 and any order from the Syariah. Should the first nominee predeceased me then the 2 nd nominee will be entrusted to carry the same responsibility as the 1st and thereafter.

Bagi Peserta Bukan Islam

Kepada penama-penama yang dinamakan dibawah. Sekiranya mana-mana di antara mereka itu meninggal dunia terdahulu daripada saya maka bahagiannya hendaklah dibahagikan sama rata di antara mereka yang masih hidup menurut peratusan bahagian yang dinyatakan dibawah.

For Non-Muslim Participant

To the person named below. If any one of the named beneficiary predeceased me his/her share will be equally shared between the survivor(s) according to the share as stated below.

Selanjutnya saya juga bersetuju bahawa Syarikat adalah bebas daripada sebarang tanggungan atau tuntutan setelah manfaat takaful dibayar kepada penama atau waris atau sesiapa sahaja di bawah sijil takaful tersebut.

It is further agreed that the Company shall be discharged from all liabilities once the claim benefits have been made payable to the nominee/beneficiary under the said takaful certificate.

Nama PenuhFull Name

No KPI/C No

Alamat KediamanResidential Address

PertalianRelationship

*Peratusan*Percentages

*Bagi penama bukan Islam sahaja. Jika beliau bertindak sebagai Pentadbir, kotak peratusan tidak perlu diisi.*For a Non-Muslim nominee only. If he/she acts as an Administrator, the percentage box should remain empty.

______________________________________________Tandatangan Peserta/ Pemilik Sijil

Signature of Participant / Certificates OwnerBertarikhDated _____________________________________

______________________________________________Tandatangan Saksi 1

Signature of Witness 1NamaName _____________________________________No KPI/C No _____________________________________BertarikhDated _____________________________________

______________________________________________Tandatangan Saksi 2

Signature of Witness 2NamaName _____________________________________No KPI/C No _____________________________________BertarikhDated _____________________________________

31

No Permohonan/Sijil / Proposal/Certificates No.