The legal qualification under the Shariah law of Takaful contributions

Scholars unanimously recognize that Tabarru is a noble concept of the Muslim jurisprudence. This practice in the Takaful industry, however, raises a crucial issue as the contributions paid by the participants are not a pure gift, but rather a conditional gift: each participant gives an amount in expectation of receiving a financial benefit in the future.

In addition, the amount of the donation is adjusted according to the nature of the risk to be covered. This is problematic from the Shariah point of view because the amount given as Tabarru is supposed to be voluntary and not obligatory.

The terms Tabarru and Hibah are in principle interchangeable and share a common sense of ‘donation’.

When a person performs an act of Tabarru or Hibah, he does so in a disinterested manner, without seeking anything in return or for his own spiritual fulfillment.

This has the legal consequence that once the donor has made the gift, the property is immediately transferred to the donee in perpetuity.

In a Takaful fund, the participant settles a contribution for which the operator and the participant mutually agree that it will be intended to cover the secured risk.

In the case of realization of the risk, the Takaful fund will pay a compensation to cover the loss, and in case of the nonrealization of the risk, the participant will have the right, depending on the technical result, to receive a share of the surplus.

The contribution paid into a Takaful fund cannot be considered as Tabarru or Hibah, since the participant expects a guarantee in return.

Given that in a Takaful contract, the participant essentially pays a contribution for the purpose of the material benefits, it procures and not in consideration of spiritual benefits, Prof Dr Md Ma’sum Billah believes that the contribution paid by the participant should instead be considered as a Musahamah contribution rather than as a Tabarru donation.

With a Tabarru gift, the property is transferred with a spiritual benefit to the donor while with a Musahamah contribution; the contributor retains the material and legal benefits of its contribution. The Musahamah is, in an insurance contract, a monetary counterparty paid by the participant under the contractual obligation, which obliges him to pay a contribution in exchange for the coverage of the insured risk.

The Musahamah does not necessarily imply the idea of donation; it does not necessarily have to be in favor of others, and can be realized for the benefit of the contributor himself. In a Musahamah, the contributor does not lose his right to
receive his contribution.

Through this legal classification of the contribution as a Musahamah, there is no longer any legal incompatibility with the Shariah that prevents the contributor from benefiting from it. Because of this legal qualification, participants no longer have any restrictions in claiming any form of mutual benefit from the fund to which they have contributed.

This article was first published in Islamic Finance news Volume 14 Issue 39 dated the 20th September 2017.

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La qualification juridique des contributions Takaful

Les jurisconsultes reconnaissent à l’unanimité que le Tabarru est un concept noble de la jurisprudence musulmane. Sa pratique dans l’industrie Takaful soulève cependant une question cruciale car les contributions versées par les participants ne sont pas un don au sens pur, mais plutôt un don conditionnel : chaque participant donne un montant dans l’attente de recevoir en retour un avantage financier futur. En outre, le montant de la donation est ajusté en fonction de la nature du risque à couvrir : plus l’exposition au risque est élevée, plus la contribution est importante. Cela est problématique du point de vue de la Charia car le montant donné en tant que Tabarru est censé être volontaire et non obligatoire.

Les termes de Tabarru, et de Hibah sont en principe interchangeables et partagent un sens commun de « donation ». Lorsqu’une personne réalise un acte de Tabarru ou de Hibah, elle le fait de manière totalement désintéressée, sans rechercher quoi que ce soit en retour en faveur de quelqu’un ou pour son propre accomplissement spirituel. Cela a pour conséquence légale qu’une fois que le donateur a effectué son don, la propriété est immédiatement transférée à perpétuité au donataire.

Alors que dans un fonds Takaful, le participant règle une contribution pour laquelle l’opérateur et le participant conviennent mutuellement qu’elle sera destinée à couvrir le risque garanti. En cas de réalisation du risque, le fonds Takaful versera une indemnité destinée à couvrir le préjudice, et en cas de non réalisation du risque le participant aura le droit, en fonction du résultat technique, à la redistribution d’une part de l’excédent. La contribution versée dans un fonds Takaful ne peut pas être considérée comme Tabarru ou Hibah, puisque le participant attend une garantie en retour.

Étant donné que dans un contrat Takaful, le participant verse essentiellement une contribution dans le but des avantages matériels qu’elle procure et non pas en considération d’avantages spirituels, le Prof. Dr. Md. MA’SUM BILLAH estime que la contribution versée par le participant doit plutôt être considérée comme contribution Musahamah plutôt que comme donation Tabarru.

Avec le don Tabarru, la propriété est transférée en considération d’un avantage spirituel pour le donateur alors qu’avec la contribution Musahamah, le contributeur conserve les avantages matériels et légaux de sa contribution.

La Musahamah est dans un contrat d’assurance une contrepartie monétaire, versée par le participant en vertu de l’obligation contractuelle qui le contraint à verser une contribution en l’échange de la couverture du risque assuré.

La Musahamah n’implique pas nécessairement l’idée de donation, elle ne doit pas forcément être en faveur d’autrui, et peut être réalisée au profit du contributeur lui-même. Dans une Musahamah, le contributeur ne perd pas son droit de bénéficier de sa contribution.

Au travers de cette qualification juridique de la contribution en Musahamah, il n’y a plus d’incompatibilité juridique avec la Charia qui ne s’oppose pas à ce que le contributeur puisse en tirer avantage. Grâce à cette qualification juridique, les participants n’ont plus aucune restriction dans la revendication de toute forme d’avantage mutuel sur le fonds auquel ils auront contribué.

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Sukuk souverain : l’Italie ferme la porte à la finance islamique

À l’heure où ses voisins européens comme le Royaume-Uni et le Luxembourg embrassent chaleureusement le développement de la finance islamique, l’Italie lui ferme la porte.

La troisième plus grande économie de la zone euro, en dépit d’être ébranlée par des problèmes économiques et financiers inquiétants, semble fermer ses portes aux instruments islamiques : d’après Islamic Finance News, le gouvernement a rejeté un projet de proposition de loi pour une émission souveraine de sukuk lequel n’a jamais été présenté au Parlement.

Stefano Padovani, associé du cabinet d’avocats milanais NCTM qui a présenté ce projet de proposition de loi, a ainsi déclaré : « Malheureusement, la proposition n’a jamais été considérée et n’a jamais été soumise au vote du Parlement parce qu’en l’absence de volonté politique le ministère des Finances n’était pas intéressé. »

Le gouvernement de Paolo Gentilonia a sans aucun doute raté l’opportunité de donner une bouffée d’oxygène au financement de son économie, lui permettant de rejoindre les rangs des émetteurs européens ayant réussi à attirer l’attention des investisseurs moyen-orientaux.

Les autres pays européens intéressés par ce financement alternatif

Pour mémoire, le Royaume-Uni, en 2014, a pu lever 200 millions de livres, suivi du Luxembourg avec une émission souveraine de 200 millions d’euros, lesquels ayant été sursouscrits au moins 10 fois. Une décennie plus tôt, le gouvernement allemand de l’État de Saxe-Anhalt a levé 100 millions d’euros sur les marchés de capitaux islamiques, en étant le premier état d’Europe à émettre un sukuk souverain.

L’espoir d’assister à une émission italienne de sukuk souverain a-t-il disparu ? Dur à dire. L’actuel ministre des Finances semble avoir peu d’intérêt pour cette forme de financement alternatif bien que la Commission des finances de la Chambre des représentants ait formulé une proposition de loi sur le traitement fiscal des contrats financiers islamiques à l’instar des instructions fiscales relatives aux instruments financiers islamiques adoptées par la France en 2009 et 2010.

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Dirham d’argent enfin disponible en France

SAAFI offre à ses clients la possibilité d’acquérir des Dirhams d’argent en pièces de 1, 5, 10 et 20.

Pour obtenir un devis contactez-nous par téléphone au 0805 01 11 40 (numéro vert) ou via notre formulaire de contact.

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Branding and merchandising strategy for Takaful institutions in Europe

Takaful institutions Branding

The use of branding is to increase the reputation of Takaful institutions and to give it a positive image. Being well known is essential to the construction of the image of Takaful institutions but it is not suffi cient to develop a positive brand image. The communication will therefore have to propagate and make known the values of the Takaful institutions.

The more clearly and strong the positioning of the Takaful institutions, the bett er the communication will be perceived. A special focus has to be done on Shariah compliance. Compliance gives rise to trust in human interaction and ultimately can meet demand. The products’ names chosen have to mean that the products off ered are respectful of Islamic values.

Takaful Branches Merchandising

Merchandising is the marketing of the point of purchase and it will have to be developed in all the distribution network through point of purchase advertising. The purpose of these tools is to capture att ention and convince quickly. Studies have shown that memorization was superior when several senses were simultaneously solicited.

The major challenge of the merchandising of the Takaful points of purchase is to make sales by creating an eff ective communication area that has four purposes: to interest the prospect, sensitize visitors, exploit the traffi c of the branches and prepare the purchase meeting. The space must be optimized to prioritize the sales objective as well as the
comfort of the customer.

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Communication strategy for Takaful institutions in Europe

The establishment of a communication strategy involves various stakeholders: marketing, consulting agency and the executive management. To ensure the effectiveness of the communication strategy it is essential to:

  • Communicate on social networks by being transparent and sincere;
  • Integrate all media in the campaigns.

Communication should provide information and advice to clients, convince them of the benefits of the offer and give them the desire to subscribe, it will play a major role in the development of the institution’s marketing mix by integrating the whole variables as part of an overall strategy.

The objectives of the media plan

  • Use major media such as television, radio, national newspapers, posters and sponsorship;
  • Target households;
  • Deploy pedagogical efforts towards individuals in order to explain how Takaful works;
  • Develop digital communication;

A Takaful institution in Europe will have to focus on a strategy of differentiation. Today, the axes on which insurance companies are positioned are generally identical: proximity, solidity and service, they try to be different, credible and attractive.

Best practices

  • Adopt clear communication;
  • Determine the target;
  • Think « customer »;
  • Working the top of mind.

Selection of the appropriate message to be transmitted

It is necessary to avoid certain misunderstandings while having a positive impact on the perception of clients towards the Takaful institution and its products taking into account their economic and social situation and their way of life.

Communication channels

The means of communication must not concentrate solely on advertising. It is essential to turn to original channels via new information technologies and not hesitate to organize events such as conferences and use sponsorship. Intermediaries also play a central role in communication because they represent the interface between the Takaful institutions and their customers. It is necessary to develop both mass communication and proximity communication.

The effectiveness of the external field depends on the implementation of an internal communication shared by all components of the Takaful institutions. The involvement of marketing in the sphere of communication regarding commercial communication, that is to say the campaigns to promote products and generate customer contacts. These campaigns will use all or part of existing media: public relations, sponsorship and patronage, media:  TV, billboards, press, radio, non-media campaigns: direct marketing, e-mailing, SMS, promotional tools, editing advertising brochures, pamphlets, brochures, documentation, sales assistance tool and internet.

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SAAFI à l’Institut de Recherche et de Formation en Finance Islamique (IRFFI)

Le Directeur de SAAFI était à l’Institut de Recherche et de Formation en Finance Islamique (IRFFI) d’Algerie pour former les collaborateurs de la Banque Agricole et de Développement Rural.

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Marketing strategy for Takaful Institutions in Europe

The marketing approach has to be based on a triple vision: cultural, organizational and strategic.

Marketing must reflect the institution’s atmosphere; it must have the purpose of maintaining coherence of actions and ensure veracity of speech.

As in all key areas of the institutions, the commitment of leaders is essential. Marketing can be defined as the effort to adapt organizations to competitive markets, in order to influence the behavior of the public on which they depend, by an offer whose perceived value is higher than competitors.

Marketing is therefore a customer-oriented mindset but also profitability. It is the set of techniques that enable the meeting of products and services intended to satisfy the expectations and needs of consumers.

Today, the power of customers is growing, thanks to the development of blogs, forums and social networks. It is possible to inquire before a purchase, to testify as a result of good or bad experiences, to propose improvements products, etc. The institutions must learn to take this into account in a transparent and respectful manner.

The roles of marketing in Takaful are multiple:

  • At the institution’s highest strategic level;
  • At all levels of the institution as market scout;
  • At the operational level as sales accelerator;
  • On the Internet for the animation of networks.

Key success factors of Takaful on the European market

  • Take into account technical and management constraints without cannibalizing marketing;
  • Integrate the network dimension into product design and marketing actions;
  • Addressing brand communication and communication in synergy;
  • Integrate the Internet and ICT dimension into all strata of the institution;
  • Ensure a good coherence between the marketing actions, the environment of the institution;
  • Ensure a good mix and consistency over time of marketing actions
  • ricing policy determination regarding existing offers on the market

Pricing policy determination regarding existing offers on the market

In insurance the price is a part of the product offer, the price must always be competitive and its determination is carried out according to a two-fold approach:

  • Objective, determined by actuaries and lawyers on the basis of technical characteristics: technical components, performance and associated services;
  • Subjective determined by consumer perception: product concept, positioning and brand.

The price factor is decisive in order to capture the shares of this concentrated market. Demand is elastic and low switching costs allow consumers to easily change insurance. The offer may also try to play on other parameters such as service, quality and highlight its religious compliance through awareness campaigns.

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