MANAGEMENT OF TAKAFUL FUND OPERATIONS

Underwriting of Takaful Risks

Takaful operator

shall manage the underwriting process effectively to avoid anti election

Shall ensure viability of takaful fund in long run.

Must responsible to objectively evaluate and assess the underwriting risks

Shall ensure that the officers responsible for underwriting function fully understand policies

Underwriting activities must be consistent wiyh yhe underwriting capacity of the takaful operator

MANAGEMENT OF SURPLUS

TO required to establish written policy
approved by Shariah Comitte

Surplus Distribution

Shall be recommended by Actuary

Shall be in line with surplus management
policy

Shall be determined and distibuted

Shall not cause adverse financial
implication

Shall only be made subject

Recommended for Distribution

Assess the strength of the takaful funds

Refrain from recommending surplus
distribution

Valuation of Liabilities

Set appropriate & adequate
provisions

Investment of Takaful Funds

The investment must be in line with
Shariah requirements and participants' expectations

Investment strategy consideration

Nature

Term

Currency

Amount and timing
of takaful liabilities

Tolerance of risks' fund

Claims Management

appropriate systems
& controls

Retakaful

Shall not cede out risks to insurance or
reinsurance companies unless in cases where it is unavoidable

There is no existing takaful or retakaful operator that accepts a particular risk

No existing takaful or retakaful operator that has the capacoty or expertise yo accept a particular risk

A retakaful arrangement with existing takaful or retakaful operator.

Shall not accept inward reinsurance from insurance or reinsurance where risk and agreement bound to Shariah Compliance

Retakaful arrangement must be consistent with the interests of the takaful funds

Takaful Product Design and Pricing

shall exercise diligence in product design and ensure that the products offered include adequate takaful coverage and, are suitable and appropriate to the targeted market segment.

prudence must be maintained to avoid under pricing and balanced with due care to avoid participants from being charged excessively

pooling of contribution by participants for the purpose of meeting claims arising from a pre-agreed event, sufficient amount of contributions must be allocated to the takaful funds

shall ensure adequate tabarru‟ allocation into the PRF to cover risks and obligations associated with the takaful contract