Page 20 - Insurance Times February 2016

xv) WALA - Clients Generalization:-
xvi) WAKALAH - Agency.
N As Shariah Compliant Insurance the
Takaful Insurance Vs Conventional Insurance Takaful Insurance uses Takaful- Poli-
cyholder Funds and Shareholders
Sr.No Takaful Insurance Co. Conventional Insurance Co. Funds as segregated Funds man-
aged by the Takaful Operator In-
1 In conformity with Islamic Law Not in conformity with Shariah- the surance Company.

i.e Shariah Compliant Islamic Law N Participating Policy holders and
shareholders are linked by Prin-
2 Policy holders are represented Policy holders are not represented ciples of Mutual Assistance and
Voluntary Contribution.
on the Board of Directors on the Board of Directors
N Takaful Life Insurance is called
3 Policy holders have right to vote Policy holders have no right to vote 'Family Takaful' and General Insur-
ance or Non Life form is called
to elect directors to elect directors 'Takaful'.

4 Policy Holders Have to attend Policy Holders have no right to N Financial Transactions of Takaful
Products are through dedicated Is-
Annual General Meeting to pass attend Annual General Meeting or lamic financial institutions and
chain of Islamic Banks.
the Annual A/cs to pass the Annual A/cs
N Under the WAKALAH Model of
5 Policy Holders Fund is Constituted There is no Policy holders Fund Takaful the Operator receives a
fixed ratio as fees from the Takaful
6 Profits are Out of profits, Dividends are paid to Premiums of the Takaful Fund.
distributed between the shareholders Fund
share holders Fund and the N Under the MUDARABAH Model
Policy Holders Fund the Operator gets a share of the
Surplus of the Takaful Fund.
7 Life Insurance is Called Family There is no donations only sums
Takaful and if the Assured dies Insured +Bonus are paid to legal N Hybrid Model by combing the two
before the maturity date of life heris or nominees in the policy of also co-exists and is popular.
policy,the heirs of the deceased the Deceased Assured
Assured get all benefits plus a N Under the WAQF model the opera-
donation as per principles of tor makes initial donation to the
tabarru i.e charity. Takaful fund.

8 Life Insurance Agent is an Life Insurance agents are appointed All these Operations are under the
Supervision of the Shariah Supervi-
employee of Takaful Insurance by Life Insurance Companies but sory Boards of Takaful Insurance
Companies.
company and gets his salary they get commission out of premi-
N Risk Management, Risk Rating,
ums brought by them on Life Insur- Risk Writing, Risk Underwriting by
Insurer before acceptance and Re-
ance Products insurance Underwriting by fixing
retentions, cessions to reinsurance
9 Co-operative Insurance Principles Private ownership, Partnership or treaties are all similar to conven-
tional insurance companies.
are basis of operations even joint Stock Ltd Companies are
N Most Takaful Insurance Companies
when joint stock Takaful formed. However Mutual or Co- today are Profit Oriented Joint
Stock Companies with Co-opera-
Companies are formed. operative Insurance Companies are tive Principles.

very similar to Takaful Reinsurance

Companies Private or Public Owner

-ship with Shareholders Limited

liability

10 Risk Management technologies, Same in Conventional Insurance and

Direct underwriting before Reinsurance.

acceptance of Risk ,Risk Rating,

Risk writing, Risk underwriting,

and Reinsurance underwriting as

per reinsurance programme are

as usual in practice of General

Conventional Insurance

20 The Insurance Times, February 2016

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