Qard Hasan Issue In Mudarabah Takaful Model

• Main Authors: Abd. Rahim, Ahmad Khilmy, Isa, Mohamad Yazid, Mohamed Naim, Asmadi, Haji Wahab, Muhammad Zarunnaim
• Format: Article
• Language: English
• Published: Islamic Bank Training and Research Academy 2017
• Subjects: HG Finance
• Online Access: https://repo.uum.edu.my/id/eprint/30741/1/JIEBF%2013%2004%202017%20152-164.pdf; https://doi.org/10.12816/0051006; https://repo.uum.edu.my/id/eprint/30741/; https://ibtra.com/journal_index.php; https://doi.org/10.12816/0051006
• Institution: Universiti Utara Malaysia

This paper aims to examine the issues of Qard Hasan in relation to Mudarabah model in Malaysian Takaful Practises. This paper has reviewed the problem of Qard Hasan in Takaful Practises and the alternatives in mitigating the issues arose. Hence, qualitative research methodology is advocated to ensure the objectives are answered progressively. The primary data were collected from the interview process together with the integration of related documents analysis. Based on analysis, the Shari'ah Advisory Council (SAC), Bank Negara Malaysia (BNM) and AAOIFI resolutions decided that any deficit from Takaful fund due to over claims must be borne by shareholders of takaful companies such as Qard Hasan. AAOIFI standard added that Takaful Operator (TO) should first, utilize all their reserves and Qard Hasan is the last option to cover the deficit. However, another issue arises which is the fairness and transparency of the TO to divulge information about this deficit becomes questionable. Therefore, the best solution would be to opt for other models which have less issues. The findings will be a guide to the TO in selecting the right model for their operations. This study would be useful to all players in the takaful industry including academicians and potential customers. This paper empirically justifies the issue of Qard Hasan in Mudarabah takaful model and recommends ways of mitigating the issue