2. LEGAL & REGULATORY FRAMEWORK IN TAKAFUL BUSINESS
K. M. MORTUZA ALI
Managing Director
PRIME ISLAMI LIFE INSUARANCE LTD.

3. CONCEPT
TAKAFUL AS AN ALTERNATE SYSTEM OF CONVENTIONAL INSURANCE IS BASED ON THE CONCEPT OF BROTHERHOOD SOLIDARITY & TRUSTEESHIP.
TAKAFUL
BROTHERHOOD
SOLIDARITY
TRUSTEESHIP

4. CONTRACT
TAKAFUL IS BASICALLY A CONTRACT OF COOPERATION BETWEEN AN INDIVIDUAL OR ORGANIZATION & THE POOL OF PARTICIPANTS.
THERE ARE SEVERAL FORMS OF CONTRACT THAT GOVERN RELATIONSHIP BETWEEN THE PARTICIPANTS AND THE OPERATORS.

5. HOW TAKAFUL SCHEME OPERATES ?
REGULATOR
BOARD
S.S.B
OPERATOR
BROTHERHOOD
SOLIDARITY FUND
TRUSTEESHIP
PARTICIPANTS

6. BASIC PRINCIPLES OF TAKAFUL OPERATION
RISK SHARING PROGRAMME FOR THE WELL BEING OF
THE COMMUNITY
SHARIAH GUIDELINES MUST BE FOLLOWED IN
TAKAFUL OPERATION
TAKAFUL OPERATORS BE REWARDED FOR THE
SERVICES THEY RENDER
THERE ARE SEVERAL MODELS OF TAKAFUL
OPERATION WITHIN SHARIAH FRAME WORK.

7. WHY WE NEED TAKAFUL LAW & REGULATION
TWO SEPARATE FUNDS NEED TO BE ESTBLISHED
ASSETS NEED TO BE INVESTED AS PER SHARIAH
FRAME WORK
 DISTRIBUTION OF SURPLUS NEED TO BE SPECIFIED
CAPITAL ADEQUACY NEED TO BE ASSESSED TO
MEASURE ABILITY FOR PROVIDING INTEREST FREE
LOAN
GUIDELINES BE FRAMED FOR WINDOW OPERATORS

8. WHY WE NEED TAKAFUL LAW & REGULATION
FITNESS AND RESPONSIBILITIES OF SHARIAH
MEMBERS NEED TO BE DEFINED
GUIDE LINES NEED TO BE PROVIDED FOR SHARIAH
AUDIT.
DISCLOSURES TO PARTICIPANTS IS FORMIDABLE
PART OF TAKAFUL CONTRACT. THIS NEEDS SPECIFIC
STANDARD GUIDELINES.
PARAMETERS AND MODUS OPERANDI OF DIFFERENT
MODELS NEED TO BE DETERMINED.

9. OBJECTIVES OF REGULATION
TO ENSURE FAIRNESS AND TRANSPARENCY OF
TAKAFUL OPERATIONS.
 TO ENSURE PARTICIPANTS LEGITIMATE INTERESTS.
TO PROTECT OPERATORS FROM MISMANAGEMENT
AND INSOLVENCY.
TO ENSURE THAT PEOPLES CONFIDENCE ON TAKAFUL
IS NOT SHAKEN.
TO ENSURE STABILITY AND ORDERLY GROWTH OF
TAKAFUL MARKET AND THE ECONOMY.

10. STRUCTURE OF LEGAL AND REGULATORY FRAME WORK
GOVERNMENT
ACT & RULES
REGULATOR
REGULATIONS
MARKET PLAYERS
BALANCED COMPETITION
INTERMEDIARIES
LICENSING & TRAINING
PARTICIPANTS
CONSUMER PROTICTION

11. KEY ISSUES 1. WHO SHOULD REGULATE?
2. WHO SHOULD BE PERMITTED TO OPERATE?
3. WHAT APPROACH SHOULD GOVERN SOLVENCY
REGULATION?
4. WHAT STEPS NEED TO BE TAKEN WHEN
OPERATORS ARE IN FINANCIAL DIFFICULTY?
5. WHAT PROTECTIONS TO BE AFFORDED TO
PARTICIPANTS OF INSOLVENT OPERATORS?

12. CRITICAL ROLE OF REGULATOR
1. REGULATE PROMOTE & ENSURE GROWTH.
2. PROMOTE & DEVELOP PROFESSIONARISM .
3. REGULATE INVESTMENT OF FUNDS & FIX
MARGIN OF SOLVENCY.
4. PROTECT INTERSTS OF POLICY HOLDERS AND
OTHER STAKEHOLDERS.
5. MONITOR PERFORMANCE OF RETAKAFUL
OPERATORS.

13. CRITICAL ROLE OF REGULATOR
6. ENSURE STANDARDS OF ACCOUNTING &
TRANSPARENCY OF BALANCE SHEETS.
7. PRESCRIBE CEILING FOR MANAGEMENT
EXPENSES & SALE COST.
8. SET PROCEDURE FOR GRANTING REGISTRATION,
CONVERSION, MERGER ACQUISITION & WINDOW
OPERATORS.
9. ADOPT CAPITAL ADEQUECY PRINCIPLES.
10. DETERMINE ITS ROLE IN RELATION TO
SHARIAH COMPLIANCE.

14. Raj Bhaban (6th Floor), Dilkusha C/A, Dhaka-1000, Bangladesh.
Thank You
CORPORATE OFFICE
Raj Bhaban (6th Floor), Dilkusha C/A, Dhaka-1000, Bangladesh.
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