5 Interactive Distance Learning Programs on Islamic Banking and Finance

Saturday, March 7, 2009

A World First For Syariah-Compliant Retakaful Wording

Bandar Seri Begawan - The world's first fully Syariah compliant retakaful wording agreement was signed yesterday, marking another milestone in the Islamic insurance industry in Brunei Darussalam, state broadcaster Radio Televisyen Brunei (RTB) reported yesterday.

The agreement was made between Takaful IBB Berhad and Labuan Re (L) Ltd. As the chairman of Takaful IBB Berhad, Ministry of Communications Pehin Oratg Kaya Seri Kerna Dato Seri SdiiZ Hj Abu Bakar Hj Apong was present to witness the signing. Signing on behalf of Takaful IBB Berhad was its acting managing director, Hjh Lily Hj Kula while CEO Dato Hj Majid Mohamad represented Labuan Re (L) Ltd.

A representative from Takaful IBB Berhad says the financial institute is among the world's first takaful operators to adopt the takaful wording in its retakaful treaty programmes for 2008 to 2009. The retakaful wording is based on the concept of waqadah and tabarruk, where Takaful IBB Berhad

as a takaful participant, has agreed to allow Labuan Re (L) Ltd to handle its takaful funds in the most applicable way.

The contents of the retakaful wording clearly define the treatment of the retakaful fund, providing the guidelines and claims payment, the mechanisms of the fee generated and the formulation of the distribution of the net retakaful surplus to the retakaful participants, in corn- pliance with Syariah requirements.

"This is a move towards the right direction to make sure all products as well as services in retakaful are fully syariahcompliant," Dato Hj Majid was quoted as saying. "This is one of the ways where Labuan Re is contributing to the spread and progress of takaful, not only in Brunei, not only in Southeast Asia, but also in the world." According to the report, takaful contributions currently stand at US$7 billion as opposed to US$2 billion in 2006.

-- Courtesy of The Brunei Times

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