Shariah inspection of surplus distribution in takaful operations

Soualhi, Younes (2010) Shariah inspection of surplus distribution in takaful operations. IIUM Journal of Economics and Management, 18 (2). pp. 197-220. ISSN 1394-7680

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Abstract

This research intends to shed light on a number of issues related to surplus distribution in takāful. The first part is devoted to revisiting the main financial concepts related to the surplus such as the underwriting surplus and profit. Modes of distribution such as pro-rata and offsetting will also be discussed in the light of equity principle advocated by SharÊcah. The second part deals with the major juristic views and doctrines delineated in favor of surplus distribution. Legal doctrines such as the ownership or otherwise of the surplus after donation would be meticulously discussed and reviewed in the light of current practices of takāful operators. The last part deals with a general outline of SharÊcah parameters in relation to equitable surplus distribution. This is followed by a scrutiny of surplus distribution practices of some modern takāful operators both in Malaysia and abroad. The research argues that while it is strongly recommended to redistribute the surplus to the participants only, there is a considerable SharÊcah ground allowing takāful operators to share in the surplus for reasons outlined in this research.

Item Type:	Article (Journal)
Additional Information:	2098/25918
Uncontrolled Keywords:	Takāful, Surplus distribution, Islamic finance, Malaysia
Subjects:	H Social Sciences > HG Finance > HG8011 Insurance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Mrs. Wan Salwati Wan Salleh
Date Deposited:	02 Oct 2012 09:14
Last Modified:	06 Nov 2012 22:24
URI:	http://irep.iium.edu.my/id/eprint/25918

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