The Application of Wakalah Contract in Takaful: Perceptions of Practitioners
DOI:
https://doi.org/10.53840/jmm.v15i1.233Keywords:
Shariah Audit, Takaful, Gap Analysis, Shariah CommitteeAbstract
Since its establishment in the 1980s, takaful has grown significantly in Malaysia, making the nation a global leader in Islamic banking. In 1984, the industry saw the founding of Syarikat Takaful Malaysia Berhad, first propelled by regulatory support and increasing awareness of Shariah-compliant products. Wakalah is the most widely used model in Malaysian takaful industry. However, there were some issues highlighted in the wakalah contract, such as the fees being charged multiple times, which gives more return to the takaful operators. This will defeat the basic purpose of mutual cooperation in Takaful. The main purpose of this study is to explore the perceptions of the practitioners on the application of wakalah contract in the takaful operation. This study employed qualitative methodology. Ten semi-structured interviews were conducted involving selected product development officers and strategy communications officers which directly involved in the development of a takaful product. Thematic analyses were adopted to analyse the data. It can be deduced that there is a gap between the expectations of the shariah committee and the actual practice of shariah audit which provides the area of improvement in the future. These findings provide useful insights for takaful operators to enhance alignment with shariah governance, particularly through improving communication and standardising audit practices.
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