Takaful operator
The entity that manages a takaful business on behalf of participants, usually for a fee, a profit share or both.
A takaful operator is any establishment or entity that manages a takaful business, usually though not necessarily as part of the legal entity in which participants' interests are held, as IFSB-29 puts it. The operator underwrites, handles claims and invests the funds on participants' behalf. It is remunerated under a wakalah fee, a mudarabah profit share or a hybrid of the two, and conduct standards require it to treat participants fairly and disclose how it is paid.
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
TakafulMutual cover: participants contribute to a common fund, as donations, to help one another against specified losses.Wakalah model (takaful)The takaful model in which participants appoint the operator as agent to run underwriting and investment for a known fee.Shareholders' fund (takaful)The takaful operator's own fund: its capital, fees and expenses, kept apart from the participants' funds.Takaful participantA person or business that joins a takaful scheme, contributes to its funds and is entitled to compensation under its terms.