Author: Lejla Taslaman
The sudden development of Tekaful Islamic insurance is particularly present in the global insurance market recently. Activities in the insurance segment that are implemented in accordance with Islamic principles and which include the principles of Sharia in the segment of Islamic economy, finance and insurance have largely contributed to the sudden growth of interest of insurance users. The benefits and concept of Takaful insurance are not only present in Muslim countries but also beyond. This model is particularly interesting in Western countries where insurance companies see new business opportunities. But first, let’s take a brief look at what Tekaful Islamic insurance actually is.
In the Far East, Malaysia emerged as a leader in the development of Takaful insurance which together with the Central Bank (Bank Negara) introduced separate regulations for Islamic insurance and banking in 1984 and this act is known as the Takaful Act 1984. Soon after, Singapore, Indonesia and Brunei have followed the example of establishing Islamic insurance companies. In the Middle East, Takaful insurances have developed in Saudi Arabia, Bahrain, Iran, Qatar, Egypt, the United Arab Emirates, Jordan, Kuwait and other countries. In addition to these two regions, Tekaful insurance is also being introduced in Europe and America.
What exactly is the difference between conventional and Takaful Islamic insurance and what justifies this growth and development? One of the main goals of conventional insurance companies is profit. The general disruption of the value system in today’s age greatly contributes to this and everything is subordinated solely to the goal of maximizing profit, ignoring basic rights and principles of justice. Many people or companies think that they have solved the problem of risk if they insure themselves in the way that conventional insurance offers without taking into account the concept of risk and the basic goal and principles of operation of conventional insurance. The fact is that there are benefits from this insurance, but the very concept of speculation is forbidden in Islam.
Conventional insurance (life, property, etc.) is a type of insurance in which the insured pays a certain amount or installments in exchange for damage compensation, and the amount of which the insured cannot withdraw or dispose of except in the event of an accident. Tekaful – The Islamic concept of insurance is based on mutual guarantee and for the sake of comparison, it can be briefly said that it is the most similar to classical mutual funds. Mutual insurance is a contract of several persons exposed to similar risks and dangers where each of them participates with a certain percentage, in order to mitigate a possible accident. Therefore, each of them is an insurer and an insured, and the goal is to help above all, not material profit, and each of them will receive the amount they paid increased by the corresponding profit.
Tekaful insurance essentially differs from conventional insurance in the way of understanding and managing risk, as well as in the way of managing the asset fund. Further differences are still present in the relationship between the operator (insurer) and the participant (insured). In risk management, Tekaful does not allow what is called Gharar (uncertainty, speculation) and Maisir (gambling). Also, in the process of managing the fund of funds, Riba (interest) is especially prohibited.
These three segments basically have to be absolutely satisfied in the Tekaful model and this is what differentiates it from the conventional model.
It is also interesting to think about the possibilities of applying the Tekaful model within the legal framework in Bosnia and Herzegovina. The legal framework related to the field of insurance in Bosnia and Herzegovina is defined at the entity level. Mutual guaranteeing is not unknown and according to the current legal framework it is possible to establish a joint-stock insurance company and a mutual insurance company. As such, a mutual insurance company can be the basis for the establishment of Tekaful insurance. Of course, this concept would also require additional regulation and detailed regulation of the way of work and functioning of both the company and the fund. However, the benefits and benefits of introducing this model in Bosnia and Herzegovina are multiple. The takaful industry is growing rapidly, with participants being all, regardless of religion. Currently, there are more than 110 Tekaful operators worldwide. The Takaful industry is gaining momentum and is recognized as a significant factor in the world and the overall Islamic financial system.
The principle of Islamic insurance would be particularly useful in our country as an alternative to commercial insurance, because many would participate and support this method, and it would certainly attract investments from foreign countries, especially Islamic ones. The example of Great Britain, as currently the fastest growing Tekaful insurance market, speaks volumes about the enormous importance and potential of this insurance model as a chance for the growth and development of the insurance market in Bosnia and Herzegovina.
