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

Takaful has been known as Shari’ah compliant insurance and it is penetrating not only into the Muslim countries but also into the non-Muslim countries. Among the countries which offer Islamic finance products, Malaysia is well known as one of the leading countries encouraging this industry. Due to t...

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Main Authors:	Htay, Sheila Nu Nu, Salman, Syed Ahmed
Format:	Conference or Workshop Item
Language:	English English
Published:	2013
Subjects:	HG1501 Banking
Online Access:	http://irep.iium.edu.my/32895/ http://irep.iium.edu.my/32895/1/Shariah_and_ehtical_Issues_in_Takaful_27.pdf http://irep.iium.edu.my/32895/2/Brunei_1.pdf

id	iium-32895
recordtype	eprints
spelling	iium-328952013-11-20T06:15:11Z http://irep.iium.edu.my/32895/ Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia Htay, Sheila Nu Nu Salman, Syed Ahmed HG1501 Banking Takaful has been known as Shari’ah compliant insurance and it is penetrating not only into the Muslim countries but also into the non-Muslim countries. Among the countries which offer Islamic finance products, Malaysia is well known as one of the leading countries encouraging this industry. 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. Thus, the practice of takaful industry has been criticized from the Shari’ah and ethical aspects. It is important to examine these main issues because Shari’ah compliance and ethicality are the distinguishing factors that make takaful different from conventional insurance. We also believe that if these issues are not resolved, the participants and the investors will lose the confidence in the takaful industry and consequently, it will hinder the growth of takaful industry. This paper focuses on the Shari’ah and ethical issues in the modified mudarabah model used in family takaful products. They are related to profit (surplus) sharing practice and the usage of interest free loan. The findings of this paper reveal the existence of unfavorable Shari’ah and ethical issues in the practice of takaful operation in Malaysia. Therefore, we suggest that the regulators, Shari’ah advisors and industrial players should revisit on these issues in order to avoid reputational risk, Shari’ah compliant risk and early termination risk. 2013-09 Conference or Workshop Item PeerReviewed application/pdf en http://irep.iium.edu.my/32895/1/Shariah_and_ehtical_Issues_in_Takaful_27.pdf application/pdf en http://irep.iium.edu.my/32895/2/Brunei_1.pdf Htay, Sheila Nu Nu and Salman, Syed Ahmed (2013) Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia. In: 3rd International Conference on Business and Economics Research (ICBER 2013), 28-29 Sept 2013, Bandar Seri Begawan, Brunei Darussalam. (Unpublished)
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English English
topic	HG1501 Banking
spellingShingle	HG1501 Banking Htay, Sheila Nu Nu Salman, Syed Ahmed Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia
description	Takaful has been known as Shari’ah compliant insurance and it is penetrating not only into the Muslim countries but also into the non-Muslim countries. Among the countries which offer Islamic finance products, Malaysia is well known as one of the leading countries encouraging this industry. 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. Thus, the practice of takaful industry has been criticized from the Shari’ah and ethical aspects. It is important to examine these main issues because Shari’ah compliance and ethicality are the distinguishing factors that make takaful different from conventional insurance. We also believe that if these issues are not resolved, the participants and the investors will lose the confidence in the takaful industry and consequently, it will hinder the growth of takaful industry. This paper focuses on the Shari’ah and ethical issues in the modified mudarabah model used in family takaful products. They are related to profit (surplus) sharing practice and the usage of interest free loan. The findings of this paper reveal the existence of unfavorable Shari’ah and ethical issues in the practice of takaful operation in Malaysia. Therefore, we suggest that the regulators, Shari’ah advisors and industrial players should revisit on these issues in order to avoid reputational risk, Shari’ah compliant risk and early termination risk.
format	Conference or Workshop Item
author	Htay, Sheila Nu Nu Salman, Syed Ahmed
author_facet	Htay, Sheila Nu Nu Salman, Syed Ahmed
author_sort	Htay, Sheila Nu Nu
title	Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia
title_short	Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia
title_full	Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia
title_fullStr	Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia
title_full_unstemmed	Shari’ah and ethical issues in the practice of modified Mudharabah family takaful model in Malaysia
title_sort	shari’ah and ethical issues in the practice of modified mudharabah family takaful model in malaysia
publishDate	2013
url	http://irep.iium.edu.my/32895/ http://irep.iium.edu.my/32895/1/Shariah_and_ehtical_Issues_in_Takaful_27.pdf http://irep.iium.edu.my/32895/2/Brunei_1.pdf
first_indexed	2023-09-18T20:47:30Z
last_indexed	2023-09-18T20:47:30Z
_version_	1777409773795278848

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

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