35 Questions
What is a key difference between Takaful and conventional insurance in terms of profit?
Profits in Takaful are for shareholders, while in conventional insurance they are for policyholders.
What type of investments are typically allowed in both Takaful and conventional insurance?
Equity and debt with no restrictions
In which model does the operator share in the surplus generated?
Mudarabah Model- Operator Sharing in Surplus
Which model does not involve sharing the surplus generated with the operator?
Non-Surplus Sharing Mudarabah Model
What is a characteristic of General/Group Takaful under One Year Plans?
Short-term coverage
According to Mudarabah principles, who may share in the original capital provided?
Only the Sahib al Mal (Capital Provider)
In Bank al-Jazira Wakala Model, who is totally responsible for all start-up expenses and operational costs?
Operator
What is the key feature of the Bank al-Jazira Wakala Model regarding fees?
Fees only taken if a product is sold
How does Jordan Islamic Insurance handle fixed expense fees for one-year contracts?
Reimburses participants if expenses are less than fixed fee
What is a distinguishing characteristic of Takaful models involving Group Takaful-One Year Plans?
Total transparency on all aspects of operations and fee structure
What is the main principle guiding Takaful companies in their operations?
Conforming to Islamic norms
According to Islamic economic principles, what should be the objective of a Takaful company?
Promote the interests of all stakeholders
In the Mudarabah model for Takaful, what is the key feature of the operator sharing in surplus?
Sharing the surplus equitably with all stakeholders
What distinguishes the Non-Surplus Sharing Mudarabah model in Takaful?
Not sharing any profits with stakeholders
In General/Group Takaful for one-year plans, how are decisions typically made regarding corporate matters?
All stakeholders have a right to participate in corporate decisions
Which Takaful model does not involve charging expenses to the participants' pool?
Mudarabah
What is a key advantage of the Non-Surplus Sharing Mudarabah Model over a Mutual insurance model?
Does not charge expenses to participants' funds
In a Family/Individual Life Takaful operation, why is the Non-Surplus Sharing Mudarabah Model considered a difficult business model?
Relies on build-up of reserves and savings funds
What is a characteristic of the Family/Individual Life Takaful operation under the Non-Surplus Sharing Mudarabah Model?
Relies on build-up of reserves and savings funds
Which Takaful model involves sharing 100% of the surplus with the participants and not with the operator?
Family (individual) Takaful
What is the main principle of Takaful models in terms of expense handling?
Operators and participants share expenses equally
In a Mudarabah Model of Takaful, how are investment profits typically shared?
Investment profits are shared between the Participants and the Operator based on a pre-determined ratio
What distinguishes the Non-Surplus Sharing Mudarabah Model in Takaful?
No profits are distributed to the Participants
In General/Group Takaful with One Year Plans, how are risks typically managed?
Risks are borne entirely by the Participants
What is one of the key features of Cooperative Risk-sharing in Takaful models?
Clear segregation between Participant and Operator for risk-sharing
What is the primary concern when applying a Mudarabah contract in a Takaful underwriting operation?
Sharing investment profits
How does surplus differ from profit concerning a Mudarabah contract in Takaful operations?
Surplus is after deducting claims and direct expenses, while profit is generated from investment dealings.
Why do Sharia scholars debate applying a Mudarabah contract to Takaful underwriting operations?
Because profit is not generated in underwriting operations
In a Mudarabah Surplus Sharing Model, what remains after deducting claims and direct expenses?
Takaful underwriting surplus
How do different Takaful models treat expenses according to the text?
Handle expenses differently
What element is forgiven in Islamic finance, using charitable donation as an alternative?
Al Gharar (uncertainty)
According to the Fiqh Academy Resolution 1985, what type of contract is considered prohibited (Haram) according to Sharia?
Commercial Insurance contract
What contract is deemed as the alternative and Sharia-compliant option for commercial insurance in Islamic finance?
Cooperative Insurance contract
What did the Fiqh Academy Resolution 1985 not specify regarding Takaful operations?
The Mudarabah model for Takaful
Which element of Islamic law leads to variations in Takaful models?
Pluralism of Fatwas
Explore the principles of a Takaful company, which operates based on Shari’ah principles requiring them to adhere to Islamic norms of business. Learn about concepts such as Taqwa, Maslahah, Daf’ al darar, Raf’ al-haraj, and Laa Dharara wa la Dhirar. Understand the importance of operating in a morally, ethically, and socially responsible manner.
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