Shari’ah and ethical issues in the practice of the modified mudharabah family takaful model in Malaysia

Takaful is known as a Shari’ah compliant insurance in Muslim and non-Muslim countries. In this regard, Malaysia is a global leader in offering Islamic financial products and supports takaful. Due to the rapid growth of the takaful industry, the prevailing guidelines and regulations might not be...

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Main Authors:	Htay, Sheila Nu Nu, Syed, Ahmed Salman
Format:	Article
Language:	English
Published:	International Association of Computer Science and Information Technology (I A C S I T) 2013
Subjects:	HG1501 Banking
Online Access:	http://irep.iium.edu.my/32865/ http://irep.iium.edu.my/32865/ http://irep.iium.edu.my/32865/ http://irep.iium.edu.my/32865/1/MUDARBAH_ISSUES.pdf

id	iium-32865
recordtype	eprints
spelling	iium-328652013-11-20T05:13:18Z http://irep.iium.edu.my/32865/ Shari’ah and ethical issues in the practice of the modified mudharabah family takaful model in Malaysia Htay, Sheila Nu Nu Syed, Ahmed Salman HG1501 Banking Takaful is known as a Shari’ah compliant insurance in Muslim and non-Muslim countries. In this regard, Malaysia is a global leader in offering Islamic financial products and supports takaful. Due to the rapid growth of the takaful industry, the prevailing guidelines and regulations might not be adequate to capture the current needs of takaful operations. This has led to certain criticisms of the practice of the takaful industry from Shari’ah and ethical aspects. It is important to examine these issues because Shari’ah compliance and ethicality are the distinguishing factors that differentiate takaful from conventional insurance. If these issues are not resolved, participants and investors are set to lose confidence in the takaful industry. This paper focuses on the Shari’ah and ethical issues related to profit (surplus) sharing practice and the use of interest free loans in the modified mudarabah model used in family takaful products. The findings of this paper reveal the existence of unfavorable Shari’ah and ethical issues in the practice of takaful operations in Malaysia. As a result, the paper suggests that the regulators, Shari’ah advisors and industry players should revisit these issues in order to avoid reputational risk, Shari’ah compliant risk and early termination risk. International Association of Computer Science and Information Technology (I A C S I T) 2013-12 Article PeerReviewed application/pdf en http://irep.iium.edu.my/32865/1/MUDARBAH_ISSUES.pdf Htay, Sheila Nu Nu and Syed, Ahmed Salman (2013) Shari’ah and ethical issues in the practice of the modified mudharabah family takaful model in Malaysia. International Journal of Trade, Economics and Finance, 4 (6). pp. 340-342. ISSN 2010-023X http://www.ijtef.org/index.php?m=content&c=index&a=show&catid=48&id=593 10.7763/IJTEF.2013.V4.313
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG1501 Banking
spellingShingle	HG1501 Banking Htay, Sheila Nu Nu Syed, Ahmed Salman Shari’ah and ethical issues in the practice of the modified mudharabah family takaful model in Malaysia
description	Takaful is known as a Shari’ah compliant insurance in Muslim and non-Muslim countries. In this regard, Malaysia is a global leader in offering Islamic financial products and supports takaful. Due to the rapid growth of the takaful industry, the prevailing guidelines and regulations might not be adequate to capture the current needs of takaful operations. This has led to certain criticisms of the practice of the takaful industry from Shari’ah and ethical aspects. It is important to examine these issues because Shari’ah compliance and ethicality are the distinguishing factors that differentiate takaful from conventional insurance. If these issues are not resolved, participants and investors are set to lose confidence in the takaful industry. This paper focuses on the Shari’ah and ethical issues related to profit (surplus) sharing practice and the use of interest free loans in the modified mudarabah model used in family takaful products. The findings of this paper reveal the existence of unfavorable Shari’ah and ethical issues in the practice of takaful operations in Malaysia. As a result, the paper suggests that the regulators, Shari’ah advisors and industry players should revisit these issues in order to avoid reputational risk, Shari’ah compliant risk and early termination risk.
format	Article
author	Htay, Sheila Nu Nu Syed, Ahmed Salman
author_facet	Htay, Sheila Nu Nu Syed, Ahmed Salman
author_sort	Htay, Sheila Nu Nu
title	Shari’ah and ethical issues in the practice of the modified mudharabah family takaful model in Malaysia
title_short	Shari’ah and ethical issues in the practice of the modified mudharabah family takaful model in Malaysia
title_full	Shari’ah and ethical issues in the practice of the modified mudharabah family takaful model in Malaysia
title_fullStr	Shari’ah and ethical issues in the practice of the modified mudharabah family takaful model in Malaysia
title_full_unstemmed	Shari’ah and ethical issues in the practice of the modified mudharabah family takaful model in Malaysia
title_sort	shari’ah and ethical issues in the practice of the modified mudharabah family takaful model in malaysia
publisher	International Association of Computer Science and Information Technology (I A C S I T)
publishDate	2013
url	http://irep.iium.edu.my/32865/ http://irep.iium.edu.my/32865/ http://irep.iium.edu.my/32865/ http://irep.iium.edu.my/32865/1/MUDARBAH_ISSUES.pdf
first_indexed	2023-09-18T20:47:27Z
last_indexed	2023-09-18T20:47:27Z
_version_	1777409770454515712

Shari’ah and ethical issues in the practice of the modified mudharabah family takaful model in Malaysia

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