Aware of the important role of the media in raising awareness and popularizing information, the Insurance and Social Security Supervisory Authority (ACAPS) organized, this Wednesday, June 29, 2022 in Casablanca, a Master Class on the theme of “Takaful insurance”.
The workshop for the benefit of around forty journalists was led by ACAPS experts. This meeting made it possible to review the various questions relating to this insurance which has recently become operational.
As of today, ACAPS has issued decisions relating to insurance products and granted approvals to seven participating banks, one of which just yesterday, following the assent issued by the Superior Council of Ulema (CSO) relating to management regulations, Takaful insurance contracts and general regulations on redemption and advance.
Takaful insurance operations subject to approvals being: Life and death; Takaful investment; Insurance operations against the risk of bodily injury; Insurance operations against fire and natural elements; Insurance operations against glass breakage; Insurance operations against water damage.
This sesame or green light from ACAPS and the CSO should allow the marketing of Takaful insurance products and already, alliances are made and broken between the participating banks and the Takaful companies for a common delicacy. This is notably the case of BTI Bank (Bank Al-Tamweel Wa Al-Inma of the Bank Of Africa group) and Wafa Takaful (100% subsidiary of the Wafa Assurance group), which have entered into a partnership agreement. But others who have won approval have just as many ambitions. An alternative to conventional insurance products, Takaful insurance is a financial product whose main feature is its compliance with the precepts and requirements of Islamic religious law, “SHARIA”. Takaful insurance is based on the pooling of a “Takaful” fund made up of several people (participants).
ACAPS supports local insurance and reinsurance companies, in particular through the provision of model management regulations and specimen contracts, after submission, of course, with the assent of the CSO. The objective is to make it easier for the companies concerned to speed up exchanges with the CSO on these subjects. Takaful insurance operations and the management activity of the Takaful insurance fund by an insurance and reinsurance company may not, under any circumstances, give rise to the collection or payment of interest.
Takaful insurance is based on a large number of principles and foundations respecting Sharia, the main ones being the donation (Tabarûu), the separation of funds from shareholders and participants, the operator (company or Wakil) acting as agent of investment for the management of the assets of the said fund, the management of the surplus for the benefit of the common interest of the participants, the governance (representation of the participants within the board of directors) and the respect of the rules and principles of the Sharia in all activities and all investments made with the appointment of a Sharia Compliance Committee whose fatwas have the force of law and the establishment of an internal Sharia audit committee responsible for monitoring Sharia compliance.
Also, as part of the support for insurance companies for the operationalization of Takaful insurance and in order to facilitate the granting of CSO assent, ACAPS has developed Seven reference models of the general conditions and special conditions relating to the following contracts, Death/disability for crowdfunding, Death/disability from any cause; Death ; Multi-risk building for participatory finance; Multi-risk building; Takaful investment; Takaful-retirement investment. A reference model of the General Regulation on Redemption and Advance (RGAR) which must be annexed to the Takaful investment and Takaful-retirement investment contracts. These reference models cover all insurance operations covered by the four licenses granted to the Takaful insurance companies referred to above.
It should also be noted that Takaful insurance complements the participatory financial ecosystem. Its purpose is to cover the risks provided for in the Takaful insurance contract or even the Takaful investment, through what is called a Takaful Insurance Fund. This fund will be used to insure these same people against potential risks that may affect them, to cover them against different types of damage (physical or material) that they may suffer. It is also a Fund, endowed with legal personality and financial autonomy, created and managed by a Takaful insurance company, for the benefit of the participants of which it is considered to be the agent, in return for ‘a remuneration.
The Takaful Insurance Fund is made up of several accounts funded by participants’ contributions as well as profits made elsewhere by these accounts. These resources are used to pay agency fees, acquisition fees and direct costs related to the operation of the Fund, as well as indemnities due under Takaful insurance contracts. Any surplus generated is distributed among the participants in accordance with the management regulations.
There are several forms of contracts that govern the relationship between the (insured) participants and the Takaful operator. The most used contracts are the mudaraba contract (profit-sharing) and the wakala contract (mandate) as well as the wakala and mudaraba contract (wakala contract adopted for subscription, and the mudaraba contract for Takaful fund investments). This approach seems to be favored by some international organizations. In all models, the Takaful operator will generally provide an interest-free loan to cover any default in the Takaful fund. The loan is repaid using future surpluses from the Takaful fund.