Towards Integrating Trust In Takaful Model

ABSTRACT

Statement of Problem: The current Takaful models practised in Malaysia are facing issues and challenges with respect to Shariah compliance and good governance. For instance, Tabarru' funds in Malaysia have attracted tax on their investment returns. In addition, these Takaful models may not be in line with the legal framework of certain common law countries. These non-alignments may create difficulties for Takaful operators to penetrate non-Muslim countries.

The Key Objective: To study the weaknesses of the existing Takaful models and make recommendations that will enable Takaful operators to realise their full potential. We hypothesize that this can be done by adopting concept of trust, which is similar to the concept of cash Waqf, in the Takaful model.