Index
A
AAOIFI standards
Financial Accounting Standard No. 12 (FAS, 12)
income statement
Paragraph, 3/1
statement of policyholders' revenues and expenses
statement of sources and uses of funds in zakah and charity fund
statements of changes in shareholders' equity and policyholders' surplus
statements of financial position and cash flows
Financial Accounting Standard No. 13 (FAS, 13)
access to capital, conventional versus takaful
accounting, rating issues
challenges, addressing ability,
Fitch's review
multiple applicable accounting standards
Shari'ah compliance
actuarial risk in takaful undertakings
Agency Theory (AT),
agilah
asset risk,
asset management capabilities issue
raised by retakaful,
Audit Committee
B
balance sheet analysis, of takaful undertakings risk
bancatakaful model,
arrangements between bank and TO
selling with brand names of Tos
selling with own brand name,
distribution channel
white label bancatakaful model,
Basel Accords framework
Basel I
risk-based capital in takaful
Basel Committee
board of directors (BoD)
additional organs of governance in
Audit Committee
Nominations Committee
Remuneration Committee
in shareholders' interests protection, difficulties
bonding, neo-classical model of CG
British mutual Equitable Life
business conduct in Islamic insurance, See also emerging markets
critical drivers for
data, collecting and sharing
educating markets and consumers on standards
ethical market discipline encouraging
financial inclusion, promoting
formal training programs
institutional development and marketing, promoting
insurance education supporting
insurance regulation improving
market discipline on institutions, invoking
market-led initiatives
micro-level outcomes
on-the-job training
risk-based approach to business conduct
self-regulatory organizations promoting
Shari'ah arbitrage
Shari'ah compliance throughout product life cycle
supervision, improving
systemic level outcomes
in emerging markets
ex ante Shari'ah compliance
framework of
IAIS Insurance Core Principles, See also individual entry
market conduct requirements
frequency of reporting
intermediation
issues
offsetting factors
ongoing monitoring of compliance
principles for
complaints
conflicts of interest
disclosure of information to customers
information about customers
integrity
management and control
prudence
relationship with regulators
skill, care, and diligence
transparency
business continuity risk, in takaful undertaking
business models in takaful, See also Shari'ah principles; standard models and variants
basic structure
for family takaful
for general takaful
capital adequacy
commissions (in family takaful)
disclosure
multiple fees and charges
solvency
transparency
business risk
business structures
complexity of
white label bancatakaful model
governance structure, embodiment of participants' interests in
C
capital, See also risk-based capital (RBC) in takaful
capital adequacy in takaful, See solvency
requirements issue raised by retakaful
capitalization, rating issues
Fitch's review
investments
overall undertaking assessment
qard hasan,
suitable contractual and other documentation
suitable local legislation
takaful fund assessment
takaful operator assessment
mutual takaful firms
ceding
challenges facing takaful firms addressing
commissions
in family takaful
long-term contracts
pro rata payments
surplus sharing
common authorities
compatibility, retakaful model
mudarabah model
wakalah model
premium flow
waqf model
compensation
conventional versus takaful
for damages
competence of supervisory staff, issue
in a formal sense
in a practical sense
complexity of business structures
compliance risk with regard to Shari'ah rules
comprehension issue
comprehensive regulatory framework for takaful
need for
scope of
‘conditional donation’
concentration risk
concept of takaful
dhulum (injustice)
gharar (uncertainty)
maisir (speculation)
riba
tabarru'
conceptual issues confronting takaful
conceptual meaning, takaful,
Consumer Protection
contract administration charges
contracts, takaful, shari'ah principles governing
basis of
gharar
inter alia
riba
Contracts Act
contractual clauses manipulation issue
contractual relationship conventional versus takaful
control rights
control structure in takaful undertakings
conventioanl mutuals
conventional insurance
drawbacks in
sub-marginal risks in
waqf and
conventional insurance and takaful, comparison
access to capital
contractual relationship
differences between
mutual insurance
proprietary insurance
insurer/operator, liability
investment of fund
policyholders/participants responsibility
corporate governance (CG) in Islamic insurance, See also neo-classical model; neo-corporatist model
conventioanl mutuals See also mutual insurance
corporate social responsibility issue
definition
Fitch's review
governance issues
issues
policyholders as stakeholders
rating issues
shareholders as stakeholders
underwriting surplus
proprietary companies, See also proprietary insurance
risk management and investment
corporate sukuk,
coverage, reinsurance
credit rating, See also Fitch's review
basics
qualitative factors
quantitative factors
sukuk ratings
Fitch's review
international scale
‘investment grade’ rating scale
national scale ratings
speculative grade rating scale
types
credit risk
D
data, collecting and sharing, for business conduct
Dawawin
deficits, cover
takaful participants in
dharuura (necessity)
dhulum (injustice)
different tiers of capital
disclosure issue
disclosures to market
distribution channel
donation (tabarru')
‘conditional donation’
‘double-gearing’
E
educating markets and consumers on standards, for business conduct
emerging markets See also business conduct in Islamic insurance2 business environment in
accounting systems
gambling
lax management problem
regulation framework
reliable basic data
reliable mortality tables
supervision framework
take-up of insurance
common market conduct compliance criticisms
ethical market discipline, encouraging, for business conduct
ex ante Shari'ah compliance
ex gratia payments
explicit solvency requirements
F
facultative/obligatory reinsurance
facultative reinsurance
family fund/family takaful
commissions in
investment portfolio composition
equities
investment accounts
long-term investments
risk protection
savings
short-term investments
sukuk
ownership of funds in
pension plans
run-off
structure of
participants' investment accounts (PIAs)
participants' investment fund (PIF)
participants' risk accounts' (PRAs)
participants' takaful fund (PTF)
shareholders' fund (SHF)
undertakings, risk issues in
fatwa (religious edict)
fiduciary risk management in takaful undertakings
investment risk
underwriting risk
final risk bearer, conventional versus takaful
financial flexibility, rating issues
financial inclusion, promoting, for business conduct
financial issues
asset risk
assets valuation
concentration risk
disclosures to the market
displaced commercial risk
family takaful business
group supervision
insolvency
liabilities valuation
in prudential supervision
reinsurance receivables
run-off
family takaful
general takaful
takaful-specific issues
entities identification
legal entity
financial reporting in Islamic insurance, See also stakeholders need of transparency
AAOIFI standards
financial review, Fitch's
financial strain
‘firm within a firm’ dichotomy
Fitch's review of insurance company, See also under capitalization
corporate governance review
financial review
industry review
management review
operational review
organizational review
formal training programs, for business conduct
fraud
frequency of reporting
fund deficit, qard facility to meet
fund management charges
G
general funds/general takaful
GCC versus Malaysia, 2002–
aggressive investment
analysis
long-term investment portfolio
short-term investment portfolios
investment portfolios
ownership of funds in
structure of
participants' risk accounts' (PRAs)
participants' takaful fund (PTF)
shareholders' fund (SHF)
total general fund investment portfolio
undertakings, risk issues in
gharar (uncertainty)
Glass-Steagall Act
global standard of retakaful,
globalization challenge of corporate governance
Governance Committee (GC) set up proposal
governance issues, in Islamic insurance
dissatisfaction with TO
in supervision See also under supervision
underwriting surplus
governance risk
governance structure, embodiment of participants' interests in
government sukuk
growth related issues
Gulf Cooperation Council (GCC) group study, See also under general funds
H
‘hybrid’ approach
I
IAIS Insurance Core Principles, 2
ICP 24 Intermediaries
ICP 25 Consumer protection
ICP 26 Information, disclosure and transparency toward the market
ICP 27 Fraud
ICP 28 Anti-money laundering, combating the financing of terrorism (AML/CFT)
ijarah
implied authorities
indemnity
industry review, Fitch's
information rights
insolvency
institutional development and marketing, promoting, for business conduct
institutional issues confronting takaful
mutual structure adoption, obstacles
insurance education, supporting, for business conduct
insurance regulation, improving
for business conduct
Insurer Financial Strength (IFS) rating
insurer/operator liability, conventional versus takaful
inter alia
interest-free loan, See qard hasan
intergenerational equity issue in mutual insurance
intergenerational equity
intermediaries
essential criteria
ICP
supervision issues in
intermediation, Islamic financial
internal capital model
International Association of Insurance Supervisors (IAIS), See IAIS
International Financial Reporting Standards (IFRS)
international prudential guidelines for takaful undertakings
developments in
IFSB in
international scale
investment activities of takaful operators
‘investment grade’ credit rating scale
investment of fund, conventional versus takaful
investment portfolios of takaful undertakings, See also family fund; general funds; share holders' funds
Gulf Cooperation Council (GCC) group study
family funds
general funds
shareholders' funds
participants' funds, related parties influence on
non-parametric Wilcoxon Ranked Signed Test
total investment portfolio
investment risks
in takaful undertakings
investments, rating issues
Islamic Financial Services Board (IFSB)
K
kafalah
L
legal issues in takaful
conflict of laws and their interpretation
contractual clauses manipulation
effective framework, call for
‘firm within a firm’ dichotomy
‘hybrid’ approach
investment activities of takaful operators
in Malaysia
mandate (and breaches of it) by takaful agent
common authorities
express authorities
implied authorities
nomination clause effect, on mirath
proprietorship licensed as takaful operator
qard facility to meet fund deficit
retakaful
Shari'ah boards status
Shari'ah issues
structure through which takaful undertaking is offered
waqf framework
licensing process issues
life insurance
CG issues in
liquidity risk
loss distribution under proportional reinsurance
M
maisir (speculation)
management review, Fitch's
management strain
management takaful models
mudarabah
TO engagement modes in
wakalah
and mudarabah combination
mandate (and breaches of it) by takaful agent
common authorities
express authorities
implied authorities
Mann-Whitney U Test
market, reinsurance
market conduct issues
capital adequacy
comprehension
contract terms
disclosure
ex gratia payments
market conduct regimes
point of sale
pricing
suitability
market discipline on institutions, invoking, for business conduct
market issues
growth related
financial strain
internal new product approval process
licensing process
management strain
supervisory considerations
market-led initiatives, for business conduct
market risk
micro-level outcomes, for business conduct
models of takaful and their impacts
modified mudarabah model
monitoring, neo-classical model of CG
mudarabah (profit-sharing) model/contracts
in Malaysia
management
practical features
modified mudarabah model
mudarabah and wakalah contracts, comparison
investment
management expenses
underwriting
pure mudarabah model
Shari'ah compliance of
mudarib share
multiple fees and charges
contract administration charges
fund management charges
upfront payment
mutual insurance
mutual insurance, CG issues in
governance structure creation
underwriting reserves related
equitable life crisis in U.K
intergenerational equity
‘orphan assets’
policyholders failure to exercise control rights
mutuality element
in risk pool for takaful
N
national scale ratings
neo-classical model of CG
considerations
bonding
monitoring
principal-agent problems
in U.K.
in U.S.
corporate social responsibility issue
globalization challenge
‘responsible shareholder’ concept
neo-corporatist model of CG
corporate social responsibility issue
globalization challenge
two-tier board structure
nomenclature, takaful
nomination clause effect
Malaysia
on mirath (succession or inheritance)
Pakistan
on wasiyah (will or bequest)
Nominations Committee
non-commercial takaful business model
non-life insurance
non-parametric Wilcoxon Ranked Signed Test
non-proportional reinsurance
first layer reinsurers
loss allocation of
second layer reinsurers
structure of
third layer reinsurers
non-Shariah-compliant
O
obligatory reinsurance
ongoing monitoring of compliance
on-the-job training, for business conduct
operational review, Fitch's
operational risk
operator's (or shareholders') fund
organizational review, Fitch's
‘orphan assets’ issue in mutual insurance
ownership of takaful fund
family takaful
in general takaful
participants
P
participants' interests,
in governance structure, embodiment of
actuarial recommendations
Governance Committee (GC) set up proposal
mandate of the Shari'ah board extension proposal
proposals for
participants' investment account (PIA)
participants' investment fund (PIF)
participants' risk accounts (PRAs)
participants' special accounts (PSAs)
participants' takaful fund (PTF)
policyholders
needs, in financial reporting
policyholders/participants responsibility
conventional versus takaful,
as stakeholders, issue in CG
status issue in proprietary insurance
premium
flow of proportional reinsurance
pricing issue
pro rata payments
‘profit equalization reserve’ (PER)
profitability, rating issues
property rights
proportional facultative reinsurance
proportional reinsurance
loss distribution under
premium distribution under
premium flow of
proportional treaty reinsurance arrangements
reinsurance commission
risk under
proportional treaty reinsurance
proprietary insurance
CG issues in
neo-corporatist perspective
policyholders status
regulatory requirements regarding information rights
prudential standards for insurance and takaful, developments in
pure mudarabah model
Q
qard hasan (interest-free loan)
credit for existing interest-free loans
equity credit
Fitch's ‘weakest link’ methodology
credit for potential future interest-free loans
to meet fund deficit
as regulatory capital of risk fund
R
rating issues in takaful companies, See also accounting; capitalization; credit rating
fitch ratings
key issues
accounting
business structure
capitalization
CG and management
effective business model
financial flexibility
investments
legal and regulatory framework
mudarabah contracts
non-commercial takaful business model
products
profitability
rating methodology issues
regulation
reinsurance
risk management
shareholders' fund separated from policyholders' fund
Takaful Act of
wakalah contracts
methodology issues
takaful/retakaful firms
raised by retakaful
typical ratings process
ratio-based solvency requirements
regulation, rating issues
key challenge for regulators
protection of participants
regulatory implications
regulatory perspectives
and supervision
reinsurance, See also non-proportional reinsurance; proportional reinsurance; retakaful
description
facultative reinsurance
facultative obligatory reinsurance
functions of
market
methods of
non-proportional facultative
non-proportional treaty
obligatory reinsurance
proportional facultative
proportional treaty
rating issues
reinsurance coverage
treaty reinsurance
types
related party influence, on participants' funds
related party transactions
Remuneration Committee
remuneration structure of TO
reputational risk
‘responsible shareholder’ concept
retakaful, 77
advantages
arrangement
global standard of
main issues raised by
asset-management capabilities
capital requirements
full Shari'ah compliance
handling high-severity low-frequency risks
rating
retakaful pool, building
need for
retail takaful operation
retakaful arrangements
solvency computing of retakaful undertakings
retakaful models
basic features of
mudarabah model
wakalah model
waqf model
basic model
retakaful contracts
retakaful contribution
retakaful operator
retakaful pool
tabarru',
compatibility
in the market
retakaful operators
retakaful pool, building, issue raised by retakaful,
retrotakaful firms
riba (usury)
risk
definition
handling high-severity low-frequency risks issue raised by retakaful
risk cover, in conventional insurance
risk fund
risk-based approach
to business conduct, for business conduct
to solvency
risk-based capital (RBC) in takaful,
Basel Accords framework
capital adequacy requirement
capital for regulatory purposes
credit risk
different tiers of capital
difficulties in
funds in
operator's (or shareholders') fund
risk fund
internal capital model
liquidity risk
lower-quality capital
market risk
minimum capital requirement calculating
nature of capital
operational risk
qard hasan as regulatory capital
Solvency II
solvency requirements
benchmark
risk analysis
standard risk weighting models
top-quality capital
underwriting risk
risk issues in takaful undertakings
actuarial risk
associated with funds
balance sheet analysis
family takaful
shareholders' funds
underwriting (takaful) funds
contractual relationship between TO and participants analysis
family takaful pension plans
family takaful undertakings
general takaful undertakings
investment risk
asset risk profile
‘liquidity risk’
‘market risk’
solvency
TO and takaful participants, relationship between
underwriting risk
risk management in takaful,
business risk
fiduciary risk
fundamental principles
ceding
riba,
tabarru',
importance of
investment risks
liquidity risk
operational risk
rating issues
reputational risk
risk management in takaful undertaking
broad-based risk management system
business continuity risk
compliance risk with regard to Shari'ah rules
fiduciary risk
governance risk
investment risk
objectives
operational risk
relating to TO
reputational risk
risk-reward in takaful undertakings
risk sharing vis-a-vis risk transfer
risk transfer, conventional versus takaful,
risks, takaful operators (TOs) exposed to
run-off
general takaful,
S
self-regulatory organizations promoting, for business conduct
separate fund solvency
share holders' funds (SHF) investment portfolios
in Bahrain
in GCC countries
between GCC countries and malaysia, analysis
GCC versus Malaysia
Malaysia
management strategies
sukuk proportion in
shareholder surplus and regulatory surplus, relationship between
shareholders as stakeholders issue in CG
Shari'ah arbitrage, for business conduct
Shari'ah board
extension mandate for participants' interests
status issue in takaful
Shari'ah compliance
issue raised by retakaful,
throughout product life cycle, for business conduct
Shari'ah principles governing takaful models See also management takaful models
commercial perspective
donation
economic perspective
fatwa
liquidation of TO
ownership of takaful fund
qard hasan,
risk fund
risk sharing vis-á-vis risk transfer
risk transfer
tabarru'
takaful contracts, governing See also contracts
takaful operator obligation in takaful fund deficit
TO's perspective
underwriting surplus
solvency in takaful, See also risk-based capital (RBC)
computing of retakaful undertakings
need for
principle of
separate fund solvency
shareholder surplus and regulatory surplus, relationship between
Solvency I
Solvency II
of takaful undertaking
traditional approaches to
explicit solvency requirements
International Association of Insurance Supervisors
ratio-based
specificities of Islamic insurance companies
conventional and takaful, comparison
speculative grade rating scale
stakeholder rights in Islamic insurance, See also neo-classical model; neo-corporatist model
board of directors (BoD) in
control rights
information rights
property rights
stakeholders need of transparency in financial reporting
comparability
definition
financial information disclosure
information disclosure
meaning
sound reporting, criteria for
specificities
timeliness
understandability
voluntary financial reporting
current market practice
future financial reporting trends
stakeholders of Islamic insurance companies
financial reporting needs of
existing reports, improving
IFRS
policyholders
regulators
shareholders
Shari'ah supervisors
stakeholders
standard models and variants in takaful, See also bancatakaful model; mudarabah (profit-sharing) model; wakalah (agency) model
sub-marginal risks
in conventional insurance
in takaful subrogation
Sudan, Islamic insurance model in
Policyholders Protection Fund (PPF)
policyholders rights
shareholders rights
suitability issue
sukuk credit ratings
sukuk proportion in share holders' funds
corporate sukuk,
in GCC countries
government sukuk
supervision supervisory issues in takaful, See also financial issues; market conduct issues; market issues
governance issues in
conflicts in investment management
failures of Shari'ah governance
firms operation
misalignment of the interests in arrangement
policyholders' interests protection issue
at regulatory level
shortage of Shari'ah scholars
takaful-specific issues
improving, for business conduct
preconditions for
in prudential supervision
regulatory provisions and
supervisory competence
supervisory priorities
windows
‘surrender value’
systemic level outcomes
T
ta'awun (solidarity and mutual assistance)
tabarru (donation or contribution) concept
Takaful Act
takaful fund
takaful operators (TOs)
obligation in takaful fund deficit
takaful participants (TPs)
in deficit cover
takaful scheme
takaful undertakings
international prudential guidelines for, IFSB in
structure, unresolved issues of
temporary interest free loan
total investment portfolio of takaful undertakings
traditional approaches to insurance solvency
Transactions Cost Economics (TCE)
transparency in Islamic insurance, See also stakeholders need of transparency
creation, ways of
enhanced disclosures
proper application of the financial reporting framework
robust CG rules, implementation
Shari'ah supervisory boards' decisions and fatawa, proper communication
treaty reinsurance
‘tri-partism’
turnover-related fees
U
uncertainty
frequency
severity of the occurrence
underwriting in takaful,
deficit in waqf model
underwriting surplus
unresolved issues, takaful undertakings structure
upfront payment
V
variants in takaful
modified mudarabah model
wakalah model with performance fees
voluntary financial reporting transparency in, See also under stakeholders need of transparency
W
wakalah (agency) model
management
practical features
with performance fees
turnover-related fees
wakalah mudarabah model
wakalah mudarabah waqf model
wakalah contracts
wakalah/mudarabah combination, management
practical features
waqf (endowment) models
issue in takaful
purpose of
Shari'ah scholars
in underwriting deficit
‘weakest link’ methodology Fitch's
white label bancatakaful model
Wilcoxon Ranked Signed Test
windows
existence, implications