20070502 takaful malaysia

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  • 1. Takaful MalaysiaMay 2, 2007Sharia Quality RatingAA (SQR)Analysts: Background Fatima AlAlawiSyarikat Takaful Malaysia Berhad (Takaful Malaysia) was incorporated in November 1984 andfatima.alalawi@iirating.comcommenced operations in July 1985. The establishment of Takaful Malaysia was based on the +97317211606recommendation of a Task Force on the Study for the Establishment of an Islamic Insurance Companyin Malaysia set up by the Government of Malaysia in 1981. Ali Abdulaal ali.abdulaal@iirating.comTakaful Malaysia started with an authorized capital of RM500 million and a paid-up capital of RM10 +97317211606million. It was subsequently transformed into a public limited company in July 1996, followed bylisting of its shares on the main board of Bursa Malaysia Securities Berhad. The capital was then raisedto RM55 million. The capital structure since then has been further enhanced as a result of arestructuring exercise at the end of 2003, resulting in paid-up share capital to rise to RM156.127 million.Takaful Malaysias business model is based on the requirements and practices of Sharia as pronouncedin the report of the Task Force. In essence, it upholds the virtues of cooperation, mutuality, solidarity asembodied in the concept of Takaful and the profit sharing principle of Mudharaba.Bank Islam Malaysia Holdings Berhad (BIMB Holdings) is the controlling shareholder with a 69.33%stake in Takaful Malaysia. The BIMB Holdings Group has been the catalyst in actively developing theIslamic financial services industry. The other shareholders are Employee Provident Fund Board (5.17%)and Islamic Development Bank (4.57%) among other small shareholders.Takaful Malaysias vision and mission, which are the basis of its operations, are focused on theprinciples of Sharia with the primary objective to provide comprehensive Takaful facilities and servicesto the Muslims and all Malaysians.Takaful Malaysias corporate objectives include providing high quality service for both Family Takafuland General Takaful to the participants; attaining profitability sufficient to support the growth of TakafulMalaysia; continuously encouraging a dynamic management; uplifting and developing a motivated workforce with responsible work ethics; and striving to protect the interests of the participants andshareholders.Reflecting its principal activities, Takaful Malaysia manages the Family Takaful Fund under the FamilyTakaful Business, and manages the General Takaful Fund under the General Takaful Business. TheseTakaful funds are kept separate from the Shareholders Fund, which was originally funded wholly by thepaid-up capital.Takaful Malaysia employs 1,761 staff consisting of 582 executives, 713 clerks and non-clerks and 466special executives in its 124 branches.Sources of income are profits from the investment of its Shareholders Fund and its share of profits fromthe management of both the Family Takaful Business and the General Takaful Business in accordancewith the profit-sharing agreement of Mudharaba.Takaful Malaysias Board of Directors (BoD) comprises of six members, all of them Malaysian citizenshaving high education and many years of relevant experience in banking and insurance. A detailedprofile can be accessed in the Annex to this report.

2. The BoD holds monthly scheduled meetings with additional1984 to 2001. He is a Research Fellow at Islamic Banking meetings convened as necessary. The BoD delegates certain and Finance Institute Malaysia. responsibilities to five Board Committees, namely Audit Committee, Nomination Committee, Remuneration Committee, Y. BHG. Prof. Madya Dr. Ahmad Shahbari @ Sobri B. Risk Management and Compliance Committee; and EmployeesSalamon: Aged 63, Malaysian citizen, member of the Sharia Share Option Scheme (ESOS) Committee. The committees Advisory Body since July 1985. Graduated with Bachelor of memberships are based on Directors focus and experience as Arts in Sharia from the University of Al-Azhar, Egypt in well as their ability to add value to the committee. Starting in1970, a Master of Arts in International Studies from Fairleigh 2006, Takaful Malaysia initiated annual assessment andDickenson University, USA in 1973 and a Doctor of performance reviews for these committees. Philosophy in History from New York University, USA in 1979. He started his career as a Sharia Lecturer at University The Articles of Association provide for all Directors and the of Kebangsaan of Malaysia in 1978 and then for two years at CEO to submit themselves for re-election at least every three Islamic University Malaysia. In 1982, he served as the years in compliance with Bursa Malaysia Listing Requirements. Acting Head of Sharia Department. He produced twelve books in educational, economy, Islamic banking and Islamic Takaful Malaysias Management Committee comprises of: law. Mohamed Hassan Md Kamil, Group Managing Director Y. Bhg. Datuk Abdul Hamid B. Said: Aged 67, Malaysian Mawardy Edi, Chief Operations Officer citizen and a member of the Sharia Advisory Body since Azian Kassim, Chief Investment OfficerAugust 2005. He obtained a Barrister-At-Law from the Muhammad Anjar Kuncoro, Chief Information Officer Council of Legal Education, England in 1980. After Ahmad Kassim, Chief Marketing Officer completing Malacaa High School in 1957, he underwent Nazrul Hisham Abdul Hamid, Chief Internal Auditor training at Malayan Teachers College in England for one Afidah Mohd Ghazali, Chief Financial Officeryear. In 1961 he started as a Lecturer in Teachers Training Balilah Hassan, General Manager-Human Resources College, Brunei. In 1973 he joined Kementerian Kebudayaan as Sports Officer. He then was appointed as the Federal Council of Attorney General Office and then became a Law Practitioner in High Court of Malaya for fourteen years. Then Sharia Evaluationin 1998, he was appointed as Judicial Commissioner in Malacca High Court and he was transferred in 2000 to Kuala Lumpur High Court as a Judge in Malaya High Court. He Sharia Committee retired in 2003. He was the Academic Senior Fellow of Civil Underlining the importance of complying with the Religion ofProcedure in Intentional Islamic University Malaysia from Islam, the Memorandum and Articles of Association of Takaful2003 until July 2006. Malaysia preface that all businesses of the company will be transacted in accordance with Islamic principles, rules and Y. Bhg. Prof. Madya Dr. Ashraf B. Md Hashim: Aged 37, practices. For this, Takaful Malaysia has set up a religiousMalaysian citizen and a member of the Sharia Advisory supervisory council called the Sharia Advisory Body (SAB), Body since August 2005. He graduated with a Bachelor of consisting of Muslim religious scholars from Malaysia, to Arts in Sharia from Islamic University Madinah, KSA in advise the company on the operations of its Takaful business in 1991 and a Master of Arts in Fiqh and Usul Fiqh from order to ensure that they do not involve any element which is University of Jordan in 1995. He then obtained PhD in not approved by the religion of Islam. The SAB was establishedSharia from University of Birmingham, UK in 1999. He at inception in 1984 as required by the Takaful Act of 1984.started his career at the International Islamic University in 1991 as an Assistant Lecturer and then became a Lecturer of The SAB is appointed by Takaful Malaysias BoD with Islamic Revealed Knowledge Department and then Assistant approval from Bank Negara Malaysia, the Central Bank of Professor at Fiqh and Usul Department in 1999. In 2003, he Malaysia, as required by its guidelines on the governance ofwas appointed as Associate Professor in Fiqh and Usul Sharia Committee for Islamic financial institutions. In itsDepartment until today. guidelines, Bank Negara Malaysia requires the Sharia Body to have a minimum of three members.The SAB is appointed for a period of two years. However, there is no restriction on the number of times a member can be The SAB consists of four members with diverse and advancednominated to the SAB. The Chairman of the SAB is elected for experience and background in Sharia studies and work. Theone year. members of this SAB are the following: The main duties and responsibilities of SAB include ensuring operations are Sharia compliant; advising the board and related Y. Bhg. Ustaz Mohd. Bakir B. Haji Mansor: Aged 69,parties on Sharia matters of operations; endorsing Sharia Malaysian citizen, Chairman of the Sharia Advisory Body. compliance manuals and documentation; and providing written and a member of the Sharia Advisory Body since July 2002. Sharia opinion. He obtained the Shahadah Ulya from Kolej Islam Malaya in 1965. He started as a teacher at Madrasah Mashhoor According the Takaful Malaysias Sharia Compliance Manual, Islamiyah in 1967 and worked there for three years. He then the SAB must have at least six meetings in a year. It spends served as information officer at National Council for Islamic about three to five hours in each meeting. The agenda of the Religious Affairs from 1971 to 1973 and then at Prime SAB meetings are detailed, comprehensive and extensive. The Ministers Department for more than 10 years. He then agenda papers are circulated to the members of the SAB in served at Bank Islam Malaysia as Sharia Coordinator fromSharia Quality Rating: Takaful Malaysia 2 Islamic International Rating Agency, May 2007 3. advance. All matters requiring Sharia opinion are presented toSharia aspects during their audit program or on case-by-case the SAB for discussion and decision. Decisions taken by thebasis as issues are identified. management in between the meetings of SAB are also presented to the SAB for endorsement of the decisions. The main recipients of the internal Sharia control reports aremanagement and audit committee of the BoD. The department The minutes of the meetings are prepared in highly professionalalso carries out a follow-up on the report with respective manner incorporating

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