Takaful (Islamic Insurance)
What the exam tests
This domain tests mutual risk-sharing, the tabarru fund, operator models, surplus distribution, and retakaful. Expect questions on how takaful differs from conventional insurance in ownership and risk.
Core rules
- Participants contribute to a tabarru fund by donation to support mutual risk.
- The fund owns the risk pool; the operator manages it under wakalah, mudarabah, or a hybrid model.
- A pure wakalah operator earns a fee and does not automatically share surplus.
- A mudarabah operator may share in surplus generated from the fund.
- Surplus belongs to participants, not the operator, subject to the policy and reserves.
- Retakaful transfers risk to another takaful operator on Shariah-compliant terms.
Worked example
One hundred participants contribute 100 each, giving 10,000. The operator takes a 15% wakalah fee of 1,500. Claims are 4,000 and expenses are 1,000. The surplus is 10,000 - 1,500 - 4,000 - 1,000 = 3,500. Under a pure wakalah model, the operator does not take surplus; it may receive only its fee unless a performance fee was agreed. The surplus is allocated to participants or reserves under the policy.
Traps
Do not treat takaful as conventional insurance with Arabic labels. Do not say the operator owns the tabarru fund. Do not promise surplus. Check whether the model is wakalah or mudarabah before allocating surplus.