In What Way Is It Shari'ah Compliant?
The Fatwa Committee of MINISTRY OF AWQAF stated that Takaful Insurance established by sharia (Islamic law), The principles and provisions of the Islamic Shari'ah shall be applicable to all the Takaful Contracts issued by the Company as decided by the Company's Shari'ah Board.
1- Shari'ah Committee oversees operations of the company
A Shari'ah Board is an essential component in any Takaful operation, to ensure that all operations are Shari'ah compliant.
2- The separation between the Takaful fund and the shareholders fund
The Takaful Insurance is founded on the principle of separation between the Takaful fund (policyholders) and the shareholders fund (the paid-up capital) by separate financial accounts.
If there is a deficiency in the Takaful Fund, the Shareholders Fund will give a Qard Al Hasan (interest free loan) to the Takaful Fund to cover deficit, the shareholders deduct the loan amount from fund surpluses.
3- Surplus distributed to Participants
Surplus is distributed fairly to the Participants after deducting compensation, legal expenses and reserves to policyholders "subscribers" all by his share.
What Is Takaful Contract?
Takaful contract (a’qad) is created by donations from participants compensate losses occurred in future according to the company's Articles of Association
and the condition of the insurance policies
What Is Takaful Insurance?
Takaful Insurance is an Insurance system which is not based on the principle of profitability as a basis. It is meant to disseminate the risks among the group of contributors (insured) through compensation which
is paid to the injured contributors out of their contribution instead of leaving the injured incurring the loss by himself according to the company's Articles of Association and the condition of the insurance policies provided that may not be contradictory to the glorious Islamic Shari'ah Provisions
What are the Historical Developments and Creation of Takaful?
The Takaful insurance has passed through its natural development of two main stages:
The stage of simple Takaful insurance, a group cooperation of people who are exposed to a certain type of risk to cover the loss or damage that may affect some of them, and through their participation in cash amounts to cover damages that may affect anyone of them on the time of accident happen.
The stage of multiple or developer of Takaful, that manages the insurance operations by specialized companies against realized fee due to increase of subscribers number and diversity of risks covered, and the first one who executed the modern Takaful (the developer) Islamic banks that had have established Takaful Islamic companies in (Sudan), the Islamic Insurance Company established 1979 considers the oldest Takaful Insurance Company worldwide and this was the starts of establishment of many Takaful companies thereafter.