SHARI’AH NON-COMPLIANCE RISK MANAGEMENT IN TAKAFUL INDUSTRY
Abstract
Business and risk are not separable. Rather they come as a package. Takaful is not exceptional. Both Takaful and insurance industries face operational risks, legal risks, business risk etc. These are common to both industries. However, the Takaful industry has an additional risk, i.e. Shari’ah compliant risk since it is required to abide with the Shari’ah in all aspects of its business activities. Shari’ahcompliance is essential since it is the principal element that distinguished Takaful from conventional insurance. A lot of research has been conducted on risk management. However, there is limited study in Shari’ah risk management of the Takaful industry. Thus, the aim of this paper is to highlight on the importance of non-Shari’ah risk management in Takaful. This paper is written based on a thorough review of the relevant literature. It underscores the importance of Takaful operators to manage non-Shari’ah compliant risk. This paper will be an eye opener for the Takaful operators, investors, Takaful participants and regulators.
Keywords:
Takaful, Shari’ah compliance, Risk managementDownloads
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