لخّصلي

INTRODUCTION The takEful sector has grown significantly over the past three decades.Besides the AAOIFI standard, Bank Negara Malaysia (BNM) has issued the Guidelines on TakEful Operational Framework (TOF), outlining the fundamental obligations of takEful operators in Malaysia towards participants in terms of conformity to SharENah principles, the undertaking of fiduciary duties, and the meeting of prudential standards (BNM, 2012).4 o Issue 2 o 2012 TakEful from a MaqEIid al-SharENah Perspective According to Muslim jurists, the SharENah's provisions for the protection of wealth include rules that safeguard ownership rights, specifically with regard to acquiring and developing wealth and protecting it from damage and transgression, but the SharENah also places great emphasis on the circulation of wealth to all sectors of the society (Dusuki and Bouheraoua, 2011).On

the other hand, the Accounting, Auditing and Governance Standards for Islamic Financial Institutions (AAOIFI, 2007) states: "Islamic insurance is a system through which the participants donate part of or all of their contributions, which are used to pay claims for damages suffered by some of the participants. The company's role is restricted to managing the insurance operations and investing the insurance contributions."IV. PRELIMINARY FINDINGS The preliminary findings obtained in this research clearly indicate that the principles of maqEIid al-SharENah are reflected in the schemes of takEful being offered, namely endorsement of the concepts of brotherhood, solidarity and mutual assistance.This is well supported by the first guiding principle in the TOF (BNM, 2012) that requires the takEful operator to conform to SharENah principles and to be consistent in the essential features of takEful.Specifically, in the takEful industry, protection of wealth is achieved through the elimination of prohibited elements such as ribE (interest), maysir (gambling) and gharar (contractual uncertainty).These SharENah principles and the rules derived in consideration of them must guide the operations of Islamic financial institutions (IFIs).They link the commercial operations of takEful with the ethical concerns of providing mutual protection benefits and dispelling or reducing peril through shared responsibility.* Syahida Abdullah is a Researcher at the International SharENah Research Academy for Islamic Finance (ISRA).4 o Issue 2 o 2012 TakEful from a MaqEIid al-SharENah Perspective II. RESEARCH OBJECTIVE This paper specifically examines takEful as a method that promotes the goals and purposes of the SharENah.The concept of taNEwun is recommended in the Qur'En (5:2): "Help (taNEwun) one another to do what is right (birr) and good (taqwE); do not help one another towards sin and hostility. Be mindful of Allah, for His punishment is severe."Human beings are expected to cooperate among themselves to properly perform the task and mission of khilEfah (vicegerency) (Qur'En, 11:61), which is part of their role as NibEd AllEh (slaves or worshippers of Allah).Such prohibited elements are known to cause injustice and harm to any society, which lead to societal disorder and economic turmoil.It represents an ethical alternative to conventional insurance and conforms to the maqEIid al-SharENah (objectives of Islamic law).TakEful helps to reduce fear and worry of the participants by providing an avenue for getting general and family protection and by indemnifying loss and damage against certain risks according to the injunctions of the SharENah.This paper therefore examines the different types of protection provided by takEful, notably the protection of life and wealth, and looks into the added dimension of protection of human dignity from the perspective of maqEIid al-SharENah as another objective of takEful.The research departs from previous studies, which have identified takEful's role in achieving the maqEIid al-SharENah to be protection of life and wealth.The historical/SharENah precedent for takEful can be found in the concepts of mutual protection and shared responsibility in the pre- Islamic Arab tribal practice of NEqilah.This customary practice was then ratified in Islam through the verdict of the Prophet (Engku Ali, 2008).4 o Issue 2 o 2012 169 Syahida Abdullah

170 ISRA International Journal of Islamic Finance o Vol.Human dignity connotes inviolability of the human person, recognition of a set of rights and obligations and guarantee of safe conduct by others, including the society and the state (Kamali, 2007).Indeed, takEful plays an important role in society, and its ethical underpinnings enable the sector to position itself as the financial sector that truly promotes the maqEIid al-SharENah.It argues that the role of takEful be broadened by also providing for the protection of human dignity as an important objective of SharENah to be catered for by takEful.II. RESEARCH METHODOLOGY This study adopts a qualitative research approach in discussing takEful within the framework of maqEIid al-SharENah.ISRA International Journal of Islamic Finance o Vol.III.

INTRODUCTION
The takÉful sector has grown significantly over the past three decades. It represents an ethical alternative to conventional insurance and conforms to the maqÉÎid al-SharÊÑah (objectives of Islamic law). TakÉful helps to reduce fear and worry of the participants by providing an avenue for getting general and family protection and by indemnifying loss and damage against certain risks according to the injunctions of the SharÊÑah. Indeed, takÉful plays an important role in society, and its ethical underpinnings enable the sector to position itself as the financial sector that truly promotes the maqÉÎid al-SharÊÑah.
MaqÉÎid al-SharÊÑah are the underpinning and guide for deriving detailed SharÊÑah rules and regulations. These SharÊÑah principles and the rules derived in consideration of them must guide the operations of Islamic financial institutions (IFIs). They link the commercial operations of takÉful with the ethical concerns of providing mutual protection benefits and dispelling or reducing peril through shared responsibility. This paper therefore examines the different types of protection provided by takÉful, notably the protection of life and wealth, and looks into the added dimension of protection of human dignity from the perspective of maqÉÎid al-SharÊÑah as another objective of takÉful.

• Syahida Abdullah is a Researcher at the International SharÊÑah Research Academy for Islamic Finance (ISRA). She can be contacted at [email protected].
  ISRA International Journal of Islamic Finance • Vol. 4 • Issue 2 • 2012
  167

168
ISRA International Journal of Islamic Finance • Vol. 4 • Issue 2 • 2012
TakÉful from a MaqÉÎid al-SharÉÑah Perspective
II. RESEARCH OBJECTIVE
This paper specifically examines takÉful as a method that promotes the goals and purposes of the SharÊÑah. The research departs from previous studies, which have identified takÉful’s role in achieving the maqÉÎid al-SharÊÑah to be protection of life and wealth. It argues that the role of takÉful be broadened by also providing for the protection of human dignity as an important objective of SharÊÑah to be catered for by takÉful.
II. RESEARCH METHODOLOGY
This study adopts a qualitative research approach in discussing takÉful within the framework of maqÉÎid al-SharÊÑah. It includes library research to gather pertinent information for the literature review. An analysis of takÉful from the maqÉÎid al-SharÊÑah perspective is carried out by highlighting the main protections provided by takÉful.
III. THE TAKÓFUL CONCEPT
The word takÉful is derived from the Arabic verb kafala, which means to guarantee; takÉful means joint guarantee. The takÉful model is based on the divine concept of taÑÉwun, which means mutual assistance. The concept of taÑÉwun is recommended in the Qur’Én (5:2): “Help (taÑÉwun) one another to do what is right (birr) and good (taqwÉ); do not help one another towards sin and hostility. Be mindful of Allah, for His punishment is severe.”
The historical/SharÊÑah precedent for takÉful can be found in the concepts of mutual protection and shared responsibility in the pre- Islamic Arab tribal practice of ÑÉqilah. When blood money (diyyah) had to be paid, the relatives of the responsible party were expected to help pay the required amount until the loss was indemnified. This customary practice was then ratified in Islam through the verdict of the Prophet (Engku Ali, 2008).
The Malaysia TakÉful Act 1984, Section 2, defines takÉful as a scheme based on brotherhood, solidarity and mutual assistance. On

the other hand, the Accounting, Auditing and Governance Standards for Islamic Financial Institutions (AAOIFI, 2007) states:
“Islamic insurance is a system through which the participants donate part of or all of their contributions, which are used to pay claims for damages suffered by some of the participants. The company’s role is restricted to managing the insurance operations and investing the insurance contributions.”
Besides the AAOIFI standard, Bank Negara Malaysia (BNM) has issued the Guidelines on TakÉful Operational Framework (TOF), outlining the fundamental obligations of takÉful operators in Malaysia towards participants in terms of conformity to SharÊÑah principles, the undertaking of fiduciary duties, and the meeting of prudential standards (BNM, 2012).
IV. PRELIMINARY FINDINGS
The preliminary findings obtained in this research clearly indicate that the principles of maqÉÎid al-SharÊÑah are reflected in the schemes of takÉful being offered, namely endorsement of the concepts of brotherhood, solidarity and mutual assistance. This is well supported by the first guiding principle in the TOF (BNM, 2012) that requires the takÉful operator to conform to SharÊÑah principles and to be consistent in the essential features of takÉful.
In terms of protection of life, it is clear that the practice of takÉful through joint guarantee and mutual help is well within the maqÉÎid al-SharÊÑah framework, i.e., takÉful provides protection to the participants against any mishap through mutual assistance and mutual sharing of risk.
This implicates mutual dependency among individuals in society and therefore mutual cooperation and social responsibility are needed (Qur’Én, 2:255; 4:37; 8:74; 16:74). Human beings are expected to cooperate among themselves to properly perform the task and mission of khilÉfah (vicegerency) (Qur’Én, 11:61), which is part of their role as ÑibÉd AllÉh (slaves or worshippers of Allah). TakÉful is essentially designed with the purpose of helping society to solve the problems of humans by giving protection to their lives, assisting them in times of need and anticipating future uncertainties.
ISRA International Journal of Islamic Finance • Vol. 4 • Issue 2 • 2012
169
Syahida Abdullah

170
ISRA International Journal of Islamic Finance • Vol. 4 • Issue 2 • 2012
TakÉful from a MaqÉÎid al-SharÉÑah Perspective
According to Muslim jurists, the SharÊÑah’s provisions for the protection of wealth include rules that safeguard ownership rights, specifically with regard to acquiring and developing wealth and protecting it from damage and transgression, but the SharÊÑah also places great emphasis on the circulation of wealth to all sectors of the society (Dusuki and Bouheraoua, 2011). Specifically, in the takÉful industry, protection of wealth is achieved through the elimination of prohibited elements such as ribÉ (interest), maysir (gambling) and gharar (contractual uncertainty). Such prohibited elements are known to cause injustice and harm to any society, which lead to societal disorder and economic turmoil.
The protection of human dignity is another form of protection that is vital for consideration within the objectives of takÉful. Human dignity connotes inviolability of the human person, recognition of a set of rights and obligations and guarantee of safe conduct by others, including the society and the state (Kamali, 2007). This is explicitly stated in the Qur’Én (17:70): “We have bestowed dignity on the children of Adam...and conferred upon them special favors above the greater part of Our creation.”
Therefore, this paper explores the protection of human dignity to depict its significance in human life, specifically the safeguarding of honour bestowed on individuals. The research proposes that any ill performance of duties towards other human beings shall be protected by takÉful which may include amongst others domestic violence, rape, incest, child abuse, molestation and sexual harassment.
V. CONCLUSION
This paper suggests that takÉful should provide for the protection of dignity of human beings on the basis of honoring the rights and duties of participants according to the goals and purposes of the SharÊÑah. The application of SharÊÑah in takÉful practice and operations is in order to create a positive atmosphere whereby the relationship between humans is based on the concepts of brotherhood, cooperation and mutual benefit to the parties involved. Therefore, maqÉÎid al-SharÊÑah institutes some values, measures and standards

to be upheld in carrying out daily duties and responsibilities as vicegerents in this world. It also indicates certain negative elements to be avoided, as they would nullify the objectives of the SharÊÑah, while avoiding them would help to reduce and manage the risks encountered by individuals. The paper proposes that the incorporation of the protection of human dignity within the objectives of takÉful will further demarcate the practice of takÉful from its mainstream counterpart by incorporating highly noble values within the takÉful business, such as providing protection to the disadvantaged.
References
AAOIFI (2007). Shariah Standards for Islamic Financial Institutions. Bahrain: AAOIFI.
BNM (2012). TakÉful Operating Framework. Kuala Lumpur: Bank Negara Malaysia. BNM (2010). SharÊÑah Governance Framework for Islamic Financial Institutions.
Kuala Lumpur: Bank Negara Malaysia.
BNM (1984). TakÉful Act 1984. Kuala Lumpur: Bank Negara Malaysia.
Dusuki, A. W. and Bouheraoua, S. (2011). The Framework of MaqÉÎid al-SharÊÑah
(the Objectives of the SharÊÑah) and Its Implications for Islamic Finance. ISRA Research Paper No. 22. Kuala Lumpur: The International SharÊÑah Research Academy for Islamic Finance.
Engku Ali, E. R. A, Odierno, H. S. P and Ismail, A. (2008). Essential Guide to TakÉful (Islamic Insurance). Kuala Lumpur: CERT Publications Sdn Bhd.
Kamali, M. H. (2007). Human Dignity in Islam. Presented at International Conference on Pathways of Human Dignity: From Cultural Tradition to a New Paradigm, jointly organized by Europe Science Foundation (ESF) and Linkopeng University, Vadstenna, Sweden, 1 November.
ISRA International Journal of Islamic Finance • Vol. 4 • Issue 2 • 2012
1