Browsing by Author "Ali, Salim Ali Salim Ali"

One of the most controversial issues within the takaful industry is the underwriting surplus at the end of the financial year of the takaful operator. In fact, the practice of managing, distributing and sharing the underwriting surplus of takaful operation varies depending on legal infrastructure, regulatory requirements and adopted takaful model by particular takaful operator. It is worth mentioning that Shari `ah scholars are not on agreement whether takaful operator is allowed to share in underwriting surplus or not. Consequently, there are two main practices centred in Middle East and Malaysia pertaining to sharing of underwriting surplus. Most of takaful operators do not share the underwriting surplus in Middle East, whereas most of Malaysian takaful operators share the underwriting surplus. The researcher tried to cover most relevant literatures pertaining to the subject matter. Furthermore, the researcher focused on practices of Malaysian takaful operators of managing and sharing the recorded underwriting surplus. Thus, the researcher provided conceptual and operational framework of managing underwriting surplus within the takaful industry. At the end of the research, the researcher believes that it is essential to balance between the interest of takaful participants and takaful operators. In other words, justice and fairness practices must be put in place in relation to sharing and distributing al-Shari`ah (Shari`ah objectives) as well as core principles of takajul system. Moreover, standardisation, harmonization and regulation bodies shall put in place Shari `ah parameters to ensure equity practices of managing of underwriting surplus.