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LEGAL & REGULATORY FRAMEWORK IN TAKAFUL BUSINESS

LEGAL & REGULATORY FRAMEWORK IN TAKAFUL BUSINESS. K. M. MORTUZA ALI . Managing Director. PRIME ISLAMI LIFE INSUARANCE LTD. E-mail : mortuzaalimd@yahoo.com. CONCEPT. TAKAFUL AS AN ALTERNATE SYSTEM OF CONVENTIONAL INSURANCE IS BASED ON THE CONCEPT OF BROTHERHOOD SOLIDARITY & TRUSTEESHIP.

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LEGAL & REGULATORY FRAMEWORK IN TAKAFUL BUSINESS

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  1. LEGAL & REGULATORY FRAMEWORK IN TAKAFUL BUSINESS K. M. MORTUZA ALI Managing Director PRIME ISLAMI LIFE INSUARANCE LTD. E-mail : mortuzaalimd@yahoo.com

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

  3. 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.

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

  5. 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.

  6. 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

  7. 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.

  8. 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.

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

  10. 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?

  11. 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.

  12. 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.

  13. Thank You CORPORATE OFFICE Raj Bhaban (6th Floor), Dilkusha C/A, Dhaka-1000, Bangladesh. Tel : 88-02-9554538, 7160074, 9560889. Fax : 88-02-9564390 E-mail : plicl@bdonline.com, Web : www.primeislamilifebd.com

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