International Center for Education in Islamic Finance (INCEIF) Chartered Islamic Finance Professional (CIFP) Part II

TK2002 - Takaful and Actuarial Practices

Project Paper: Issues and Challenges Facing By Takaful Industry in Dual System

Name: Abdirahman Sh. Mohamed Omer Student ID: 1000366

Kuala Lumpur 2011

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Table of Content 2 Introduction.3 The concept of takaful4 The origin of Takaful ..5 Challenges and issues that faced by Takaful industries: 1. Development of human resource.6-7 2. Lack of awareness7-8 3. Regulatory framework 8-9 4. Solvency and capital requirement.9-10 5. Cooperate governance..10-11 6. Shortage of shariah-compliant assets11-12 7. Distribution channel.12-13 8. Lack of standardization...13-14 9. Re- Takaful.14-15 Does the Takaful Industry Benefit from the Dual System...........................................16-19 Conclusion ............................................................................................................................20 Recommendation ..................................................................................................................21 References ..............................................................................................................................22

Introduction: Takaful is derived from its Arabic root word kafala which literally means to guarantee. In terms of usage and implication, the term kafala certainly denotes the agreement by one party to Indemnify another for any liability that has been pre-agreed upon. Since Islamic banking is developed to an system that carries the principle of shariah, and also shariah prohibits the payment or acceptance of interest fees for lending and accepting of money respectively, and also Islam prohibited any kind of investment in business that involve interest (Riba), or goods and service that considered contrary to its principles forbidden.

At recently, every person is likely to meet any kind of disasters that causes loss of wealth, life and many other things that have importance to the human life, in order to rover the losses, human being should have Takaful. Notwithstanding belief of all Muslims in Allah and Qadha-o-Qadr, Islam provides that one must find ways and means to avoid such catastrophe and disaster wherever possible, and to lighten his or his family's burden should such event occur. One possible resort in this contest is insurance cover as available in the conventional system.

Takaful is the Islamic principle that Islamic shariah accept and it is the counterpart of conventional insurance, it deal with both life (family) and general forms. Takaful system embodies the elements of shared responsibility; joint indemnity, common interest and solidarity, as well as Takaful will consist of a two-tier structure that is a hybrid of a mutual and a commercial form of company. This in itself poses significant issues for regulation and supervision. In addition, all the functions of a Takaful undertaking should conform fully to Islamic law (Shariah), and this has implications in other areas of regulation and supervision.

The concept of takaful The concept of Takaful is very wide and clear. The concept of Takaful is to protect the human being especially, when they are harm. It is nature, when one person is harm or in danger, the rest of people will help that person who suffering the loss. Besides, it seems that every person take care about others. Such a feeling of responsibility is being reinforced by the Islamic teachings as found in the following injunctions: (1) Allah SWT precisely explains in the Quran the human being should help each other when they are in danger or need help. And there are a lot of verse in Quran that encourages human being to help each other, these verse are, Surah AlMaidah (5): 3 ,Surah AlMaidah (5): 3

Essentially Takaful is a cooperative insurance where members are those who face the same risk or danger of incurring losses and who willingly contribute a certain sum of money which will be used to compensate those members of the group who incur such losses. As in the case of ancient Arab tribal custom, every member of the tribe faces the same danger of being inflicted harm by another tribe which is at war with them.

Takaful is not only concern to protect individual or ones own life, it is based on to protect and help in whole society especially, those who are suffering from financial problems. It is one of the means of providing a material safeguard for offspring and is thus in line with the saying of the holy prophet SAW. He (SAW) spoke to this effect: "it is better for you to leave your off-spring wealthy than to leave them poor, asking others for help". The Holy Prophet (SAW) also encouraged the providing of security for the widows and poor persons as he highlighted in one of his traditions: "The one who looks after and works for a widow and for a poor person (dependent), is like a warrior fighting for The Cause of Allah (SWT), or like a person who fasts during the day and prays throughout the night.
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) Enguku Rabiah Adawiah Engku Ali, Hassan Soccot p. Odierno, Essential Guide to Takaful( Islamic Insurance), 2008, page 4-5.

The origin of Takaful The origin of Takaful is derived from several practices from ancient Arab tribal custom and the companions of the Prophet. For example, under the custom of al-aqilah, it is mutually agreed among the tribes that if a person is killed unintentionally by a person of a different tribe, the accusers paternal relatives will take the responsibility to make a mutual contribution for the purpose of paying the blood money to the victims relatives. This kind of practice was existed for a long period of time and it is based on giving lam sum of money to the victims relative. The first Islamic insurance was introduced in Sudan, and it was based on a cooperative model not dissimilar from a conventional mutual insurer. And later was implemented in many countries such as Malaysia and Saudi Arabia. Currently, Takaful is growing and it attracts so many different customers both Muslin and non-Muslim. The development of Takaful is now seen as a key component of the development of Islamic finance in general, not least because of its ability to mobilize funds for investment in a similar way to conventional insurance. Takaful now operates more than 60 companies in 23 countries and has now evolved into a rapidly growing industry. More recently, re Takaful, the equivalent of conventional reinsurance has been developed, initially in Malaysia. Insurance in Islam Islam is not against the concept of insurance itself but against some of the means and methods that are currently used in conventional insurance. Islamic religion welcomes Takaful, because Islamic religion is very clear religion and it talks about many different aspects of life. Therefore, in order Islam accept Takaful, it should be free from any element that is prohibited, such the elements of riba (interest), maisir (gambling) and gharar (uncertainty), though elements of gharar may be forgivable depending on the circumstances. 2

) same references on above , page 8-10.

Challenges and issues that faced by Takaful industries: There are few challenges and issues that mainly faced Takaful industry especially when they are operating within a dual banking and insurance regime. Some of the challenges are as follows:-

1. Development of human resource: Since Takaful industry has tremendously growing and developing day after day, but there is still obstacle and challenge that put behind the development of Takaful which is really less human resource development. In order to address this challenge and to achieve further improvements, we cannot ignore the fact that we need talented people. So far there are less people who have mainly understood the concept of Takaful. There is shortage of human skill that regarding or have no enough knowledge, experience about Takaful. Progress is being made in some regions currently, for example, in Malaysia the Islamic banking and finance institutions Malaysia offers a compressive training programmers which is more regarding Islamic banking and Takaful industry, also training programs that enhance financial industry experts. But it is not widely solved because of small number of people have knowledge about Takaful. However, its more appropriate to have great people or scholars who have knowledge and understand the concept of Takaful in Islamic way of method.

Scholars, in particular, have to play a greater role for improving the concept of Takaful or Shariah concept that regarding Takaful. Scholars may have to operate differently in order to facilitate the innovation process, without compromising Islamic principles. They have to be involved in the new product development process and also the way to implement and practice it. In addition they do have come out new strategy to develop the new product that issued. Other

responsibility that Scholars have to do is to supervise and work with other people in order to insure that the new product is implement as it was intended and also work is been done as it is( 3)

Furthermore, scholars have to understand customers needs, safeguard their interests and represent them to the management of the organizations. Finally, scholars have to develop Shariah compliance systems that can deal with the standard developed by AAOIFI and other Islamic banking institutions. In order to solve this challenge, it is good to teach people Takaful concept and also its good to reeducate the talent people have forced to operate as conventional insurers, because they are best people who can understand Takaful concept easily.

2. Lack of awareness: The Islamic financial institutions play a significant role in developing and implementing Takaful concept through the entire world. But currently, it seems like that Islamic financial institutions are not putting too much effort in developing Takaful. Actually, it is big challenge and it is one of the reasons that Takaful is not widely know and also it is the reason why it less developed. Apart from Scholars or talent people, it is crucial for marketers to enhance the development of the industry and maintain the innovation and development of new products. Financial markets are increasing in sophistication; so that they should aware a lot of consequences that could possibly face while they are marking the new product, because, currently, the world is changing and there is competition. Financial markets must understand the needs and wants of customer in order to match the desire of the customers, because we are of, as customer you need a product that meet your needs and wants as well as your desire.
(4)

) Mr Chakib Abouzaid, Takaful Market: The Challenges of the Fast Growing Industry, (Sep 2007), p: 72.

Despite all these efforts of Islamic financial markets, many consumers are still unaware the concept of Takaful. Some of them they even do not know that there is Takaful. Many consumers are still stick to conventional insurance, and they adopt more than Takaful which is Islamic insurance. In order to decrease this challenge, it is mainly important to address educational issues surrounding Takaful and also to develop consumer awareness. Finally, the financial markets should address the best way to deliver the new product to the customers. To solve this challenge, Islamic financial markets have to make great progress in developing new product and enhancing the awareness. (5)

3. Regulatory framework One of the serious challenges that Takaful face mostly is regulatory framework, to establish a suitable framework is usually takes long process and sometimes it happed that the scholars will not agree each other. So in order to place Takaful in good place, it is appropriate that all the scholars should take the responsibility to regulate and supervise all the framework of Takaful.

In some countries there is dual financial system, so that statutorily required of the conventional financial system such as good governance, compliance of regulations and other provisions should also be applicable to the Islamic financial system. In some reason of Takaful, the legislative may require a minimum solvency margin in order to impose on conventional insurers should also be applied to Takaful. Such requirement can only be effected by law. With a proper legislative framework, it would also enable the authority to regulate whole gamut.

4)

Mr Chakib Abouzaid, Takaful Market: The Challenges of the Fast Growing Industry, (Sep 2007), p 71.

5) Adnan Alamasi, Surveying Developments in Takaful Industry: Prospects and Challenges, (Nov 2010) , p 208.

Besides that, Takaful industry is growing, and of course there are a lot of challenges that could possibility face and put obstacle the progress of Takaful industry. Therefore, there is wide disagreement between the scholars in terms of regulatory framework and many other issues. These disagreements are based on different issues, for example, the issue of different regions.

This regional dispute is mainly passed on the practice of Takaful, for example, Malaysia wants to be more liberal and also combine modern conventional concept with Takaful framework, while in middle east countries are more conservative, and they are not want to deal with modern conventional insurance with Takaful framework. According to this debate, it seems that every region practice its own system of believe that regarding the concept of Takaful framework. And sometimes, its hard to be transferred one concept of Takaful that one region practice to the other region.

In addition, there is also debate that about the model of Takaful is being practiced by specific region. There are various models that adopted in different regions in Takaful industry. These various are mainly caused by different interpretation of scholars. For example, in Saudi Arabia (SAMA) Saudi Arabian monetary agency approves a cooperative model in which only 10% in surplus is mandatory for distribution to policyholders. This model is not agree all the scholars some scholars are against it because they said it is not acceptable or meets the requirement of shariah compliance. (6)

4. Solvency and capital requirement Since most of framework is based on local approaches that mainly believed by the local scholars in a particular region especially level playing field have some similarities to the conventional

6) Islamic Financial Services Board, International Association of Insurance Supervisors, Issues in Regulation and Supervision Of Takaful (Islamic Insurance), August 2006.

insurances. Therefore, there could be challenges that can face the insurance or takaful. These challenges could be. for regulatory regimes it is hard to give more consideration to interest free loan or what to call Qard in order to know the solvency requirement for Takaful companies attention to whether the level playing field can stay in long term for Takaful Giving priority to the surplus distribution and contingency reserve approaches, which may be cause in a lower capital requirement for Takaful entities. Consideration to the treatment and approaches of rating agencies towards Takaful entities.

Currently, IFSB announced and published standard to fellow, which is about Standard on Solvency Requirement for Takaful (Islamic insurance). This standard is mainly explains all the above issues and there could not be misunderstanding and confusion if this standard is completely practiced. This standard will simplify to clarify the difference between Islamic insurance and conventional insurance. (7)

5. Cooperate governance Even though there is relationship between the Shariah Supervisory Board and the board of directors of the Takaful operator which is based on mutual trust and honest, but there is quite self interest between them. Actually, there is no clear mission and responsibility of shariah board, because at the present time in industry field there are no manual and standard terms of reference for shariah boards and also there is additional issue and conflict of interest between shariah scholars. In addition, there is risk which shariah boards has to put into account that mainly

) Islamic Financial Services Board, International Association of Insurance Supervisors, Issues in Regulation and Supervision Of Takaful (Islamic Insurance), August 2006.14-16.

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concern expenses such as underwriting and wider risk management. Besides, on management perspective, it is the interest to maximize the shareholders values which could create potential conflict from shariah-compliance aspects. There could be also risk of interest conflict that regarding management of assets invested in related companies (8)

6. Shortage of shariah-compliant assets

As far as we concern, takaful industry is growing fast and fast recently, but there is always shortage of tradable shariah-compliant assets in the market. The serious challenge faced this factor of shortage of shariah compliant assets is lack of investment or shortage of investment, here are some points, we can summarize this challenge.

The lack of appropriate investment vehicles, especially with the long term duration. Actually, there could be many ways to enhance the shariah complaint assets and one of ways is to make investment in order to operate accurately and clearly in Takaful industry. For example developing the concept of sukuk is good example of making investment and developing shariah compliant assets. As far as Takaful growth, there could be confusion to figure out the best asset to invest because the Shariah Scholars may not agree the factor that could possibly develop the Takaful industry.

The limited range of shariah compliant asset could be the result of asset risk. The restriction of asset could be danger of making investment, because it happened that investment may not developed and to implement this investment needs to give further consideration of understanding its nature of contribution towards the Takaful industry.

) same references, p: 12-16.

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Asset-Liability Management (ALM)

for Takaful operators would be more

challenging because of the limited availability of Islamic investment vehicles of suitable duration and liquidity. If we take as example, long term Sukuk investment, it could be risk if Sukuk is going to be reinvested specially, the Takaful industry that are more concerning about family Takaful issues.

Therefore, Takaful industry is forced to invest in volatile regional equity or real estate markets. This kind of investment will help Takaful industry to create mismatch between its assets and liability profile, so that this may cause in higher capital requirement under the risk based capital (RSC).

Potential cost to maintain shariah complaint investment. Actually there is huge cost that born with the implication of investment to any asset. The cost can be based on the clarification of Shariah boards about the kind of investment that needs to be taken. In addition, when Takaful industry wants to make investment, Takaful industry first recognizes type of investment and second the industry will look for any professional agent to simplify the project or asset which is going to be invested. This kind of hiring professional agent needs money to work and it will be cost to Takaful industry.

7. Distribution channel As far as we know the main target market for Takaful is the low-income population especially in rural areas, the middle class and the small and medium-sized businesses. Takaful companies should activate their distribution channels in proper way and also its more importation to develop their ways of distribution, because distribution channel is the main factor for every
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industry. In order to enhance and progress, the Takaful industry must implement the following factors (9)

Micro-insurance: As a long-term objective to bring takaful to the very low income population. Although some Southeast Asian companies have started looking at this option as a corporate social responsibility project, most of the takaful companies are still competing with existing conventional for industrial and commercial risks, which by definition are not sensitive to the takaful argument. They are more sensitive to the cost versus protection argument.

Life: The family takaful (life) is a long term saving, which provides the national economy resources for development. But on the social level, the family takaful is an excellent tool to protect the low income families against the risk of death and lost income for the family. Banc assurance is now developing in all countries; and the banks have better regional spread all over the countries especially in the small towns and some rural areas. The association with banks will bring new clients and offer better territorial coverage10

8. Lack of standardization in the industry that is due to shariah interpretation.

As the Takaful industry has been established recently, there are many issues that is debated among the scholars and not yet agree, because of interpretation. The main issues that not agree is

9) Mr Chakib Abouzaid, Takaful Market: The Challenges of the Fast Growing Industry, (Sep 2007), p 72. 10) ZIa Ahmed khan, Islamic Insurance Takaful Introduction and Present Market.

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way of definition and practicing because every region has its own definition and practice. This kind of differences causes confusion to the customers or people who want to be insured.

Other issues which is very famous among industry is kind of model of Takaful is using. There are many different models that are using and practiced, So that every nation has its own model of Takaful. In addition, the issue based on source of capital, which is used is also big issue among the scholars whether it is necessary for Takaful operator to provide initial capital is a shariah compliant. Actually these severe issues still exist, and still there is no actual agreement among scholars even among Takaful industries.

The great misunderstanding among scholars in terms of standardization is mainly based on different regions. As far as we concern, every region has its own way of interpretation that about Takaful. In general, thing that suitable for one region is not suitable for another region, the lack of standardization will harm the development of Takaful and Takaful industry will confuse which model to use and how it will practice or implement. Besides, it will create confusion and will have negative impact to the consumer protections, transparency, disclosure, and overall ethics of insurance. (11)

9. Re- Takaful:

The issue of re-takaful or reinsurance in accordance with the requirements and practices of Shariah will occupy the takaful operators for some time. Like insurance, sound retakaful arrangement is a necessity. Although in a situation where re-takaful is still inadequate to meet the needs of takaful operators, Shariah allows them to deal with conventional reinsurers.
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) ZIa Ahmed khan, Islamic Insurance Takaful Introduction and Present Market.

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Nevertheless at the same time, serious efforts ought to be undertaken, in particular by the takaful operators themselves to establish their own re-takaful facility. A proper way obviously would be establishing special re-takaful operator as in the case of ARIL. But without sufficient number of players, it would perhaps be rather difficult for such re-takaful operator to survive in terms of business support.

Ideally, re-takaful should solely depend on the cessions from takaful operators. Practical commitment of the various Islamic countries and their political willingness are urgently needed to demonstrate their readiness in allowing takaful operators to be incorporated in their respective countries which then would create the necessary playing field for re-takaful operation.(12)

Does the Takaful industry benefit from the dual system?

Currently, it is understood that there are around 40 takaful operators in worldwide, mostly providing business. It is at the same time estimated that the combined total assets and contributions (premium) of these operators stand at around a lot of money. It is clear that; this amount is reasonable and very insignificant compared with the total number of Muslim population of Islamic countries, estimated at around 800 million people.

The takaful industry in Malaysia has consistently registered strong growth in the last 20 years. It has proven to be resilient in the face of intense competition from the more advanced insurance

12

) Rohail Alikhan, Retakaful Opportunities & Constraints, presentation in takaful Pakistan.

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industry. The industry has recorded average annual growth rates of 57.9% and 44% in assets and net contributions respectively since 1986. The takaful industry has now reached a market penetration of 5.1%, a manifestation of growing awareness of the public on the benefits of the takaful scheme. In two decades, the strength of the takaful industry in terms of total assets of the takaful funds, has increased from RM1.4 million at the outset to RM5 billion as at end- 2004. The takaful industry has proven its resilience during the period of the Asian financial crisis, maintaining a strong average annual growth rate of 61.9% in terms of assets from the year 1997 to 2000. The total net contributions for both general and family takaful businesses has also increased significantly over the same period to RM1.1 billion at end- 2004. Family takaful business, which caters to the financial planning needs of the population in ensuring their longterm financial security, has expanded with its share constituting 70.7% of total net contributions as compared with only 37.5% in 1986.

The favorable economic condition and expanding disposable income augur well for the family takaful business. The current four takaful operators have achieved sustainable growth comparable with the domestic insurers. The industry has proven its viability in achieving an average return on equity of 22.1% between2000 to 2004.

The growth of the takaful business in the Dual system remains promising. This is supported by the increase in public awareness on takaful products coupled with more efficient and diversified distribution channels that will provide greater access to a larger segment of the population. The takaful sector has emerged as an important component of the financial system and has successfully integrated with the other components of the Islamic financial system.

The conducive environment through the provision of a sound legal, regulatory and Shariah framework will continue to facilitate the industry in sustaining its rapid growth. Product
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innovation and excellent customer service will remain as key enablers for future growth of the industry.

At the international front, the Governments vision of expanding takaful globally provides the impetus for Malaysian takaful operators to increase their global presence. Enhanced capacity and the availability of resources, particularly human capital, are essential in expediting the pace of progress in these efforts. For the regulator, the challenge lies in providing conducive environment for greater product innovation while at the same time, ensuring that the risk mitigation mechanism is in place.

However, the end ever to create a resilient and sound Takaful industry within the sphere of a dynamic Islamic financial system, although a challenging task has been a worthwhile experience. The efficient Islamic financial sector that culminates from this effort will contribute towards the overall economic growth and prosperity of the nation.

In fact, Takaful would be ideally positioned to infiltrate far and wide and create awareness and demand for insurance products that not only are tailored to the specific needs of the businesses and personal lines segments but are also in full compliance with the shariah.

Takaful or Islamic Insurance is only a subset of the global insurance industry of $ 2.5 trillion; where the global Takaful business is approximately $ 3 billion only. However, Takaful is the fastest growing areas of world insurance market. At present, Takaful is growing @ 20% to 25% per annum compared to world average growth of conventional insurance @ 5% to 6% per annum. The impetus to this growth would not have been there, if there was lack of demand, and if there was no prospects of potential rewards both for the customers and entrepreneurs of Islamic Insurance.
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The opportunities and potentials of Takaful are glaring at us. What is needed is better awareness about the goodness of Takaful system. For this, the Takaful Industry needs to have strong marketing and technical expertise in both insurance matters and Shariah matters. It needs to highlight goodness of the Islamic financial System and its application within Takaful practices.

It is an excellent opportunity to expand the size of Takaful market by addressing the need of the customers who have preference for this product. In a market place, the attraction of Takaful business be perceived not just for the fact that it is based on Islamic Shariah but because it is better and fair system. This aspect should be attractive to everyone, irrespect of any religious basis upon which the system stands initially.

A parallel in this matter can be drawn from the phenomenal success achieved by recently established Islamic banks in the country. Once peoples confidence was built up given the respective shariah boards, innovative riba-free Islamic products based on ijarah, Musharakah, Murabahah and the like, they lost no time in switching over their deposits and their financial transactions through these banks.

Takaful likewise, can build up public confidence and once that is achieved, people will voluntarily opt for the various takaful options in their individual as well as collective interests. Society as a whole will benefit as huge funds currently blocked up to hedge against fortuitous losses, will be willingly released and utilized in the growth of various businesses.

The Global Takaful Industry is small in comparison to Conventional Insurance counterpart. Therefore, the market needs to gain worldwide brand recognition and exceed performance
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Standard set by the Conventional Insurance Industry. It is nice to note that Takaful operators are increasingly starting to realize that the ethical guidelines and transparency of their products underpin their offering appeal to both the Muslims and more importantly the larger non-Muslims communities.

The Takaful Industry is fast evolving and entering a stable development phase. However, only a few National Regulators have enacted a Takaful framework for the industry. Malaysia & Bahrain are leading examples of having progressive Takaful Regulation.

In Summary, Takaful is evolving itself with its essence, the dual system is the motor of its success but with clear guidelines and public awareness its potential attraction can be achieved, government in Muslim countries must take the lead to its promotion and furiously battle with challenges ahead to ensure the success of such product because conventional insurance existence is prominent because of its existence period and takaful industry has faster growing rate and by upholding it as essence of customers protectionism figure will grant it success in the market because customers awareness is the trust goal to achieve future take over on the conventional issuance products.13

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http://www.financeinislam.com/article/3_37/1/474

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Conclusion:

Takaful is a viable alternative to conventional insurance for the worlds Muslims, and growing fast in the market recently and in future as well. Takaful start many years ago and now it developing all the Muslin, for example Malaysia and Middle East countries. This market of Takaful get secure all Muslim countries, however, the market faces many challenges and issues, that put obstacle its development and growing. One of the challenges is that customers are not aware that Takaful embodies Shariah-compliant.

Other obstacles that impeded Takaful is lack of skill and qualified people. There are shortages of human skill that severely face the development of Takaful industry. In order to eradicate this obstacle, it should establish the Shariah board, developing technical expertise on Shariah compliance, training staff, and implementing the appropriate technology. So, there is no doubt that Takaful industry will develop. Besides, it seems now that Takaful industry market is become larger and larger. Sooner it will appear non Muslim courtiers or far distance markets. Even though its good to have good marker, but this massive market will cause challenges. For example, in the Middle East market, it severs from immature banking infrastructure, poor communications infrastructure, and small pools of IT resources.

Finally, in order to develop a good Takaful industry, it is good to get appropriate standard to fellow and practice. It is suitable to eliminate all the challenges and issues that impede the development of Takaful industry. It should have proper element such as interment, technology and very outstanding market. It should give very good training the staffs that involves Takaful industries. Last but not least, Takaful is kind of helping those who suffering from loss Allah says in the Quran: Help one another in furthering virtue and God-consciousness (taqwa) and do not help another in furthering evil and enmity (Quran 5: 2).
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Recommendation:

Takaful is very important to the human being, every person wants to be insured in order to recover when they face loses. Natural disasters and catastrophes always have negative impact the life of the human being. In order to recover these all problems, human being should have at least some saving in their hands.

The challenges and issues that facing Takaful is not new thing, they have been existing since long time and most of the challenges are disagreements between scholars and shariah boards. To my personal recommendation, scholars should have come out one standard, model to practice in order to develop Takaful industry. Besides, riba (interest), maisir (gambling) and gharar
(uncertainty) should be eliminated from Takaful industry. As a result, I conclude the

recommendations, it is good to put too much effort all the following area, like, education, payment rate, and area of investment and employee awareness.

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References

1. Enguku Rabiah Adawiah Engku Ali, Hassan Soccot p. Odierno, Essential Guide to Takaful (Islamic Insurance), 2008, page 4-5. 2. Mr Chakib Abouzaid, Takaful Market: The Challenges of the Fast Growing Industry, (Sep 2007), p: 72. 3. Adnan Alamasi, Surveying Developments in Takaful Industry: Prospects and Challenges, (Nov 2010) , p 208. 4. Islamic Financial Services Board, International Association of Insurance Supervisors, Issues in Regulation and Supervision Of Takaful (Islamic Insurance), August 2006. 5. ZIa Ahmed khan, Islamic Insurance Takaful Introduction and Present Market. 6. Rohail Alikhan, Retakaful Opportunities & Constraints, presentation in takaful Pakistan. 7. http://www.financeinislam.com/article/3_37/1/474

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