The Takaful activity envisaged in Europe is able to generate significant profits. There are unmet needs such as Takaful health insurance, retirement savings or the guarantee of borrowers.
Thanks to a differentiation strategy, the solutions offered by a Takaful company are able to meet the unmet needs of the European population and are sufficiently attractive to trigger an act of purchase. And due to the absence of an existing Takaful alternative in the European insurance market, these needs
concern a large number of potential clients. That is why this activity will generate a large turnover and will be profitable.
The Takaful contract as part of its European implementation is like a traveler going to Muslim countries to acclimatize to local rules and finally return to his source to enrich himself with the specificities acquired during the trip.
The Shariah mission is to ensure that this new acclimation is done in compliance with Shariah principles set up by a Takaful company. It ensures the application of the opinions of the Shariah supervisory board by the different functions of a Takaful company. It is also in charge of the Zakat and charity auctions
and carries out research on Shariah in subjects important to a Takaful company or its clients.
In order to verify the application of the opinions of the Shariah supervisory board, the Shariah function sets up a permanent control to detect incidents and anomalies of non-conformity and also implements a punctual Shariah audit.
The Shariah audit examines the conformity with Shariah of all the activities of a Takaful company and ensures that the company does not go against the precepts of Shariah. The internal Shariah audit is an integral part of a Takaful company and operates according to established policies. The audit charter must be prepared by management and approved by the Shariah committee. Internal Shariah
auditors must have all the required skills and a sufficient academic level to carry out their duties.
Beyond its commercial ethics, a Takaful company will have to undertake and carry out charitable actions that can take different forms and reinforce its unique identity in the market.
Studies in Shariah applied to Takaful enable a Takaful company to meet clients’ expectations, in particular with regards to elements relating to inheritance law and the beneficiary clauses of insurance contracts.
This article was first published in Islamic Finance news Volume 15 Issue 13 dated the 28th March 2018.
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