KUCHING: Following the meeting of the Shariah Advisory Council (SAC) of Bank Negara Malaysia (BNM) in its 165th meeting dated January 26, the SAC has decided on the concept of several takaful applications.
BNM in a statement yesterday said the SAC has decided that the underlying concept or principle for takaful scheme is tabarru` and ta`awun (mutual assistance) among the takaful participants.
The central bank explained that tabarru` in takaful is applied through contributions from the participants to the tabarru` fund which is managed by (and entrusted to) takaful operator in the interest of takaful participants based on the agreed terms and conditions.
Financial obligation (zimmah maliyah) of tabarru` fund is independent from the financial obligation of takaful operator and individual takaful participant.
BNM explained that the ruling of tabarru` has considered among others the underlying concept for takaful is tabarru` which is applied among the takaful participants based on the agreed terms and conditions in relation to the utilization of the tabarru` fund and contribution by the participants based on tabarru` has transferred the ownership of the contribution to the tabarru` fund.
Financial obligation (zimmah maliyah) of tabarru` fund is independent from the financial obligation of the individual takaful participant because the individual takaful participant is no longer the owner of the takaful contribution and has no obligation in relation to it once the tabarru` is made to the fund.
In the context of takaful practice in Malaysia, individual takaful participant is not responsible to fulfil any financial obligation of tabarru` fund if the fund is incapable of fulfilling its own financial obligation.
The takaful operator as the party who is entrusted in managing the tabarru` fund has fiduciary duty that has to be performed based on the agreed terms and conditions as well as the duties outlined by the regulator of takaful industry.
“The clarity from syariah perspective in relation to the application of tabarru` contract in takaful will be the basis for formulation of takaful-related policy and operational aspects for takaful in Islamic financial system,” BNM said.
“(In addition), the SAC has decided that in hibah contract, generally, the ownership of the hibah asset is transferred effectively once the hibah recipient takes the possession (qabd) of the hibah asset physically or constructively.
“This forms the basis for transfer of ownership of hibah asset. Without qabd, the donor may still revoke the hibah.
“However, in conditional hibah, the ownership of the hibah asset is effectively transferred to the hibah recipient upon the occurrence of agreed conditions.
“This forms the basis for transfer of ownership of hibah asset in conditional hibah.
“As such, in conditional hibah, it is not possible for the donor to revoke the hibah upon the occurrence of the agreed hibah conditions even though the hibah recipient has yet to take possession of the hibah asset physically or constructively.”