Outline of Presentation

DIFFERENT MODELS OF TAKAFUL

MUDARABAH MODEL
WAKALA MODEL
WAKALA WAQF MODEL

INSURANCE MODEL
INVESTMENT

INCOME

FUND/POOL

CLAIM FUND

CLAIMS

PREMIUM

PROFIT OR
LOSS

MUDHARABAH- MODEL
FUND

INVESTMENT
S

INCOME

CLAIM FUND

CONTRIBUTION
S

SHARED BY
TAKAFUL
OPERATOR AND
PARTICIPANTS

CLAIMS

SURPLUS
OR
DEFICIT

MODARABAH MODEL
The participant and the operator enter into
a Modarabah contract from the beginning of
the relation, for indemnification and share
of the underwriting results.
The Surplus (Profit)is shared between the
participants and the takaful operator in an
agreed ratio.
This model allows the takaful operator to
share in the underwriting results from
operations as well as the favorable
performance returns on invested premiums.

WAKALA - MODEL
FUND

INVESTMENT
S

INCOME

WAQALA FEE

CLAIM FUND

CONTRIBUTION
S

CLAIMS

REFUNDABLE( IN
CASE OF SURPLUS)

SURPLUS
OR
DEFICIT

WAKALA MODEL
In the Wakala model, the operator is an
agent (Wakeel) of the participants of the
takaful
funds and is paid an upfront
fee (wakala fee) to cover operational
expenses of the fund.
The surplus in the Takaful funds, if any,
after the operators fee belongs to the
participants.
The
operators
fee
is
determined in advance with input from the
companys Shariah committee.

WAKALAH MODEL
Cooperative risk sharing occurs among
the
participants
whereas
the
takaful
operator earns a fee for services (as a
Wakeel or Agent).
The operator earns an upfront
deductible fee and shares the profit of
investments, it does not share the
results of underwriting.

WAKALA - WAQF MODEL

WAQF FUND

INVESTMENT
S

INCOME

WAQALA FEE

CLAIM FUND

CONTRIBUTION
S

CLAIMS

REFUNDABLE( IN
CASE OF SURPLUS)

SURPLUS
OR
DEFICIT

WAKALA WAQF MODEL

A Waqf Fund is established by the shareholders of
Takaful Company through the contribution of
Ceding
amount (part of the Capital) to compensate the
beneficiaries or participant of Takaful scheme. The
ceding amount of the Waqf will remain invested.
Any person by signing the proposal form,
contributing to the Waqf and subscribing to the
policy
documents shall become the member of the Waqf
fund.

WAKALA WAQF MODEL

The Waqf fund shall work to achieve
the following objectives:
To extend financial assistance to its
members in the event of losses.
To extend benefits to its members
strictly in
accordance with the Waqf Deed.

WAKALA WAQF MODEL

The Waqf Fund will lay down the rules
for distribution of its funds to the
beneficiaries and will decide how
much compensation should be given
to a subscriber/member .
The Waqf will become owner of all
contributions and has the right to act
as a legal entity as per its terms for
investment,
compensations
and
dealing with the surplus amounts.

WAKALA WAQF MODEL

The
Takaful
Company
may
distribute the surplus amounts on
the following basis:
A portion of surplus should be
kept as
reserve to mitigate the future
losses.
A portion of surplus should be
distributed among the participants

Continues..
As Operator/Manager, the Takaful Company
will
perform all functions necessary for the
operations of the Waqf against a Wakala
fee to be deducted from the Contributions
of the Participants.

As Modarib of the fund, the Takaful

Company will manage the investment of
the excess funds of the Waqf into Shariah
compliant investments and will participate
in the profit of the funds investments at a
fixed ratio of profit.

APPLICATION OF WAKALA
WAQF MODEL
Takaful can be used to cover :
Property e.g. house, factory, mosque,
offices
Vehicles (car, motorcycle etc..)
Goods ( For Import or Export )
Valuables
Health, accidents and Life

INSURANCE MODEL
INVESTMENT

INCOME

FUND/POOL

CLAIM FUND

CLAIMS

PREMIUM

PROFIT OR
LOSS

Wakala-Waqf Model
SHARE

Share
Holder
Wakalah
Fee

H O L D E R S

Investment
Income

F U N D (S.H.F.)

Mudaribs Share
of PTFs
Investment
Income

Management
Expense of
the Company

Profit/Loss

Takaful
Operator
Investment by
the Company

WAQF

Participant

Operational Cost
of Takaful /
ReTakaful

Investment
Income

Claims &
Reserves

P A R T I C I P A N T S T A K A F U L F U N D
(P.T.F.)

Surplus
(Profit)

End of Presentation
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