Takaful and Retakaful Challenges

What is the main challenge faced by Takaful operators in using Retakaful companies?

• Retakaful companies charge higher premiums than conventional reinsurance companies

• There are limited Retakaful companies available to cover large claims

• Retakaful companies operate under different Shariah principles

• Retakaful companies are only available in specific regions

Why is the use of conventional reinsurance by Takaful operators considered a Shariah issue?

• Conventional reinsurance companies have higher fees

• Conventional reinsurance involves prohibited elements like riba, gharar, and maysir

• Conventional reinsurance does not pay claims in a timely manner

• Conventional reinsurance operates without international standards

Why are retakaful companies relatively fewer than reinsurance companies?

• Because the retakaful market is relatively niche compared to conventional reinsurance, so there might be less incentive for new players to enter the market.

• Because retakaful companies are not allowed to operate internationally.

• Because conventional reinsurance companies offer better compliance with Islamic principles.

Why do takaful operators need to go to retakaful companies?

• To share and manage risks that are too large for a single operator to handle alone.

• To increase their profits through interest-based investments.

• To avoid offering products that comply with Islamic values.

What is a commission (in a retakaful contract)?

• payment made by retakaful operator

• payment received by takaful operator

• payment received by retakaful operator

• claims received by takaful operator

What element might potentially be removed from the retakaful contract, for the commissions received?

• tabarru'

• gharar

• 'adl

• shura

What are the benefits mentioned by having collaboration with the authorities & professional organisation?

• Incentives for new entrants

• Promote the advantages of retakaful

• Accelerating licensing process

• Uphold the reputation of the organisation

The reason we collaborate with the authorities & professional organisation is to expand retakaful companies.

• True

• False

Shariah Governance could be enhanced through:

• Effective Management Strategies

• Ignoring Regulatory Compliance

• Lack of Transparency in Decision-Making

• Disregard for Stakeholder Interests

Some factors of effective management strategies is Employment security, Selectivity in Recruiting  and Training & Skill Development

• True

• False