Module 6: Shariah Governance and Ethics for Takaful Operators Manage Interests of Various Stakeholders 51 To ensure the public and participants of Takaful are protected from various possibilities of miscommunication with the Takaful Operators via their intermediaries, several requirements have been put in place within the regulatory framework: CODE OF ETHICS – STAFF AND AGENTS OF TAKAFUL OPERATORS Roles of Intermediaries of Takaful Operators
Module 6: Shariah Governance and Ethics for Takaful Operators Code of Ethics for Intermediaries 52 Malaysian Takaful Association (MTA) formulated Code of Ethics for Intermediaries with the following objectives: Code of Ethics for Takaful Intermediaries, Malaysia Takaful Association CODE OF ETHICS – STAFF AND AGENTS OF TAKAFUL OPERATORS Roles of Intermediaries of Takaful Operators
Module 6: Shariah Governance and Ethics for Takaful Operators Appointment and Basic Ethics 53 Appointment Requirements a. Family Takaful intermediaries may represent only ONE Takaful Operator b. General Takaful intermediaries may represent TWO Takaful Operators c. Banca Takaful intermediaries may represent MORE THAN ONE Takaful Operator (Family or General) Basic Principles to be Upheld by Takaful Intermediaries a. Fairness b. Honesty c. Trustworthiness d. Responsible e. Transparency CODE OF ETHICS – STAFF AND AGENTS OF TAKAFUL OPERATORS Roles of Intermediaries of Takaful Operators
Module 6: Shariah Governance and Ethics for Takaful Operators Core Responsibilities 54 CODE OF ETHICS – STAFF AND AGENTS OF TAKAFUL OPERATORS Roles of Intermediaries of Takaful Operators
Module 6: Shariah Governance and Ethics for Takaful Operators Prohibited Practices 55 CODE OF ETHICS – STAFF AND AGENTS OF TAKAFUL OPERATORS Roles of Intermediaries of Takaful Operators
Module 6: Shariah Governance and Ethics for Takaful Operators Explanation of Contracts 56 Family Takaful a. Explain all provisions b. Explain key terms and exemptions c. Explain consequences of early surrender d. Explain tax exemption e. Provide clear illustration of expected profits and non-guarantee feature f. Provide clear explanation that expected benefits are based on assumptions g. Not amend illustration of Takaful Operator h. Not highlight favorable features only i. Provide accurate information with no intention of fraud or to mislead General Takaful a. Not assume risk until payment is made b. Remit contribution to Takaful Operator without delay c. Must not cancel cover except for cases of unsuccessful remittance of contribution CODE OF ETHICS – STAFF AND AGENTS OF TAKAFUL OPERATORS Roles of Intermediaries of Takaful Operators
Module 6: Shariah Governance and Ethics for Takaful Operators Other Requirements 57 Disclosure of Underwriting Information a. Inform participants of importance of correct and complete disclosure b. Explain that accuracy and completeness of information is the responsibility of participants c. Provide explanation of consequences of non-disclosure and giving inaccurate statements by citing Schedule 9 Part 2 (4) (5) (6) and (7) of IFSA 2013 Financial Aspects a. All contributions must be directed to Takaful Operator without delay b. Intermediaries to keep record of contributions received on behalf of Takaful Operator Subject to Laws and Regulations a. Intermediaries are subject to IFSA2013 and relevant laws and regulations governing Takaful b. Intermediaries are subject to annual fulfilment of MTA minimum requirements for Continuous Professional Development (CPD) CODE OF ETHICS – STAFF AND AGENTS OF TAKAFUL OPERATORS Roles of Intermediaries of Takaful Operators
Module 6: Shariah Governance and Ethics for Takaful Operators 58 CODE OF ETHICS – STAFF AND AGENTS OF TAKAFUL OPERATORS Staff’s Roles in Ensuring Shariah Compliance a) To fully comprehend the concept of Takaful and the Shariah requirements applicable to it. b) To continuously improve knowledge on Shariah and Takaful. c) To observe Shariah department’s guidelines and requirements at all times d) To provide transparent, complete and accurate information to Shariah Department and the Shariah Committee as and when required. e) To seek advice from Shariah Department if Shariah-related matters arise . f) To notify Shariah Department on the occurrence of any actual or potential Shariah noncompliant incidents. g) To seek advice from Shariah Department if uncertainties arise on whether a transaction, business, activity etc. is permissible according to Shariah.
Module 6: Shariah Governance and Ethics for Takaful Operators 59 CODE OF ETHICS – STAFF AND AGENTS OF TAKAFUL OPERATORS Agents’ Roles in Ensuring Shariah Compliance a) To fully comprehend the concept of Takaful and the Shariah requirements applicable to it. b) To continuously improve knowledge on Shariah and Takaful. c) To observe Shariah department’s guidelines and requirements at all times d) To provide transparent, complete and accurate information to Shariah Department and the Shariah Committee as and when required.
THE END END OF MODULE 6: SHARIAH GOVERNANCE AND ETHICS FOR TAKAFUL OPERATORS