ICIEC Takaful Model
In conformity with Shari’ah principles governing Takaful, the Articles of Agreement of the Corporation (Article 28) requires the Corporation to maintain two separate funds:
- The Policyholders’ Fund contains mainly the insurance contributions (i.e. premiums) and recovered claims from which insurance operation expenses are disbursed;
- The Shareholders’ Fund contains the paid-up capital and accumulated reserves from which a deficit in Policyholders’ Fund may be financed through a non-interest-bearing loan.
These requirements are reflected in the structure of the financial statements of the Corporation. In addition, the Articles of Agreement do not allow the distribution of surpluses either from Shareholders’ Fund or Policyholders’ Fund until the accumulated reserves are five times the subscribed capital of the Corporation.
Shari’ah Principles: All operations of ICIEC are in accordance with Islamic Shari’ah. All regulations, rules, policies and insurance instruments are subject to close scrutiny, before their coming into force, by the Shari’ah Board of the Islamic Development Bank (IsDB) Group which also acts as The Shari’ah Board of ICIEC. Thus, in carrying out its operations, the Corporation observes the following principles.
- Mutual co-operation of policyholders through their collective sharing of losses which any policyholder may suffer.
- Distribution of the surplus that may accrue from the insurance and reinsurance operations to policyholders after meeting statutory reserve obligations.
- Exclusion from cover of contracts for the sale of goods prohibited under Shari’ah, as well as interest accruing from export credit or investment loans.
- Removal or amendment of terms and conditions of insured agreements in case of contradictions with Shari’ah, and;
- Investments of its own funds in accordance with Islamic principles.