presented by: m vaqaruddin ceo pak-qatar general takaful ltd. karachi

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Presented by: M Vaqaruddin CEO Pak-Qatar General Takaful Ltd. Karachi

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Page 1: Presented by: M Vaqaruddin CEO Pak-Qatar General Takaful Ltd. Karachi

Presented by:

M Vaqaruddin

CEO

Pak-Qatar General Takaful Ltd.

Karachi

Page 2: Presented by: M Vaqaruddin CEO Pak-Qatar General Takaful Ltd. Karachi

Mudharabah-Based Takaful

• In this model, a clear distinction is made between the business of takaful or insurance and the business of investing funds mobilized from policyholders and/or the shareholders. The takaful operator seeks no returns from managing the takaful business in line with the spirit of takaful. It seeks returns from the business of investing the takaful funds under a mudaraba agreement with the policyholders for managing their funds. The policyholders assume the role of fund provider or rabb-al-maal. As a mudarib the takaful company receives its share of profits generated on investments.

Page 3: Presented by: M Vaqaruddin CEO Pak-Qatar General Takaful Ltd. Karachi

Mudharabah ModelPROFITS

ATTRIBUTABLE TO SHAREHOLDERS

COMPANY'S ADMINISTRATION &

MANAGEMENT EXPENSES

INVESTMENT BY COMPANY

PROFITS FROM

INVESTMENT

TAKAFUL CONTRIBUTION PAID BY

PARTICIPANT

PARTICIPANT TAKAFUL

FUND

PARTCIPANTTAKAFUL

FUND

OPERATIONAL COST OF TAKAFUL

OPERATIONAL COST OF TAKAFUL

OPERATIONAL COST OF TAKAFUL

SHARE OF SURPLUS FOR THE

PARTICIPANT

SURPLUS (PROFIT)

SHARE OF SURPLUS FOR THE COMPANY

40% (Example Only)

60% (Example Only)

COMPANY

TAKAFUL CONTRACT BASED ON PRINCIPLE OF

AL-MUDHARABAH

PARTICIPANT

Page 4: Presented by: M Vaqaruddin CEO Pak-Qatar General Takaful Ltd. Karachi

Wakala-Based Takaful

• In the wakala-based model, the takaful operator acts as the wakil or agent of the policyholders. As such it is entitled to a known remuneration. It incurs all the operational expenses on behalf of its principal.

Page 5: Presented by: M Vaqaruddin CEO Pak-Qatar General Takaful Ltd. Karachi

PROFIT / LOSS ATTRIBUTABLE TO SHAREHOLDERS

TAKAFUL ADMIN & MARKETING EXPENSES 25% TO 35%

INVESTMENT BY FUND

PROFITS FROM INVESTMENT

TAKAFUL CONTRIBUTION PAID BY

PARTICIPANT

PARTICIPANTTAKAFUL

FUND 65% TO 75%

PARTCIPANTTAKAFUL

FUND

OPERATIONAL COST OF TAKAFUL /

RETAKAFUL

OPERATIONAL COST OF TAKAFUL

OPERATIONAL COST OF TAKAFUL

SHARE OF SURPLUS FOR

THE PARTICIPANT

SURPLUS (PROFIT)

100%

COMPANY

TAKAFUL CONTRACT BASED ON PRINCIPLE OF

AL-WAKALAH

PARTICIPANT

60%

SHARE OF PROFIT FOR THE COMPANY

40%

MANAGEMENT EXPENSES OF

COMPANY

Wakala Model

Page 6: Presented by: M Vaqaruddin CEO Pak-Qatar General Takaful Ltd. Karachi

• Waqf: Charity, religious endowment testamentary bequest of

real estate.• Waqf can be made for Property, Money or any other

asset.• Waqif should be Sain, Adult, Owner, Free.• It is not necessary for the Waqif to be a muslim.• The Waqif can put conditions at the time of Waqf.• ( Hazrat Usman RA)

Page 7: Presented by: M Vaqaruddin CEO Pak-Qatar General Takaful Ltd. Karachi

Wakala-WAQF Based Takaful• Some of the Shariah scholars have critically analyzed the

Wakala system and have suggested to incorporate the concept of Waqf into the Wakala model. Under this revised model, the operator would initially make a donation to establish a benevolent fund called the Waqf Fund. When this Waqf is created, the shareholders will lose their ownership rights on the waqf. However, this fund will be administered by the operator. The donations received from the participants, seeking takaful protection, will also be deposited into this fund and the combined amount will be used for investment. Profits earned will be deposited into the same fund. Participants will be given benefit from this Waqf fund. The Waqf fund would be allowed to form contingency reserve fund apart from usual technical reserves. The Waqf fund rules would define the basis for compensation and financial help, and rules for sharing surplus between the members and operators.

Page 8: Presented by: M Vaqaruddin CEO Pak-Qatar General Takaful Ltd. Karachi

PROFIT / LOSS ATTRIBUTABLE TO SHAREHOLDERS

TAKAFUL OPERATOR FEES FOR ADMIN & MARKETING EXPENSES

25% TO 35%

INVESTMENT BY FUND

PROFITS FROM INVESTMENT

TAKAFUL CONTRIBUTION

PAID BY PARTICIPANT

WAQF FUND 65% TO 75%

WAQF FUND

OPERATIONAL COST OF TAKAFUL /RETAKAFUL

OPERATIONAL COST OF TAKAFUL

OPERATIONAL COST OF TAKAFUL

SHARE OF SURPLUS FOR

THE PARTICIPANT

SURPLUS (PROFIT)

100%

COMPANY

PARTICIPANT

60%

SHARE OF PROFIT FOR THE COMPANY

40%

MANAGEMENT EXPENSES OF

COMPANY

Waqf

INITIAL DONATION BY SHAREHOLDERS TO CREATE WAQF FUND

Waqf

PROFIT SHARING ON MUDARABHA BASES

Wakala Waqf Model

Page 9: Presented by: M Vaqaruddin CEO Pak-Qatar General Takaful Ltd. Karachi