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Sharia'h compliant insurance firms offer diverse services

Various insurance services offered through local, regional and global organisations include General Takaful, Family Takaful, ReTakaful, and Fund Management. These services have become a cornerstone for people who want to save for their future while complying with the Sharia’h and their religious obligations.

Shaikh Nizam Yaqooby, Executive Member of the Sharia’h Committee, said: "Takaful is a philosophy of pooling resources to help those who are less fortunate than others. The concept is built on the principles of compensation and shared responsibilities among the community to provide quality of life for all and uphold the dignity of individuals, families and society in general."

As with all Sharia’h compliant saving plans, there is an initial period during which regular savings contributions are split into two amounts. An Investment Contribution is allocated to the participant’s account, and invested according to the participant’s instructions. The second portion is the Takaful donation which goes into a collective pool for participants’ mutual self help. This is managed under the Sharia’h principles of Wakalah, and is used to protect investors from unforeseen risk and also extraordinary losses.

"We at Solidarity, one of the Middle East’s leading Islamic insurance companies, provide Family and General Takaful products. Our funds are all Sharia'h compliant and allow practicing Muslims to know that their fund management is compliant with the tenants of Islam," said Rob King, General Manager, Solidarity-Family Takaful.

"Solidarity currently provides a range of family Takaful products such as education, marriage and religious plans as well as managed funds. Over the coming years we will be expanding that considerably to tailor for the growing diversity of demand," King added.

ReTakaful, also known as Islamic Re Insurance, is a form of insurance whereby a Takaful operator pays an agreed upon premium from the Takaful fund to the reinsurance company or ReTakaful operator, and in return, the reinsurance company or the ReTakaful operator will provide security for the risk reinsured. ReTakaful has a close relationship with Takaful operations. Since ReTakaful is a form of Takaful, its competitiveness depends directly on the Takaful market.

ReTakaful comes into the picture when the Takaful operator takes a portion of money from Takaful fund and pays a premium to a ReTakaful operator to get reinsurance protection to spread its risks and protect its assets and the assets of its investors. It is insurance for insurance.

The Sharia’h principles applying to Takaful apply to ReTakaful. The difference is that in the ReTakaful operations, the participants are Takaful operators instead of individual participants.

"It is imperative that ReTakaful be implemented for those who are serious about protecting their financial future. Clients have become savvy with their money and have been disciplined in saving for their future. By selecting a company that offers protection, a client can ensure that their savings are protected," King concluded.