Participants' risk fund
The pool of donated contributions from which takaful claims are paid, owned collectively by participants and managed by the operator.
The participants' risk fund accumulates the portions of contributions paid by takaful participants to meet claims and claim-handling expenses. IFSB-29 describes it as belonging to the participants collectively and managed by the takaful operator. Its underwriting result can produce a surplus, which may be distributed or retained, or a deficit, which the operator typically covers with a qard repaid from future surpluses.
Sources
This entry explains a term; it is not a Shariah ruling. Approving a product is for each institution's own Shariah board and regulator.
Related terms
TabarruThe donation portion of a takaful contribution, paid into the risk fund to meet claims as mutual help.Underwriting surplusWhat remains in the participants' risk fund after claims, expenses and reserves, plus attributed investment returns.Shareholders' fund (takaful)The takaful operator's own fund: its capital, fees and expenses, kept apart from the participants' funds.QardA loan of money to be repaid in an equivalent amount; any benefit stipulated for the lender is riba.