MUSLIM INSURANCE BROKERS
Universal Insurance Holdings was formed on the basis to address the need for an independent Muslim owned and managed Shariah compliant insurance provider.
Therefore, it is on this basis and philosophy that the insurance company was formed.
WHERE IS THE MONEY INVESTED?
The excess donations received are invested in various Shariah compliant investments on the stock market (equities), and various other asset classes. The investments are also overseen by the Shariah board and is fully compliant.
HOW DOES THE SHARIAH MODEL WORK?
There are many models for Takaful and we use the Wakalah model.
Under the Wakalah model, cooperative risk sharing occurs among participants where the Takaful operator charges the Company a fee for its services and does not participate or share in any underwriting results as these belong to the participants as surplus or deficit.
In practice however, the operator will charge the fee for fund management based on the contractual terms entered with the Company. The fee may be fixed or an administration percentage based on the business operations as well as a performance fee at the end of each financial year. The Wakalah fee is to cover management expenses incurred in the management of takaful funds.
The Company shall segregate the assets of the participants’ funds from the assets of the Takaful shareholders. In other words, the Company shall keep separate funds and surpluses declared shall be made separately to the participants and to the shareholders.
Within the Takaful funds, the Company is required to establish and maintain separate takaful funds in respect of each cohort of underwritten business.
The Company may pay tabarru’ donation to the fund in order to insure their own vehicles and buildings. However, the Company shall not at any time hold certificates giving them an entitlement/share of the Participants Risk Fund where no insurable interest exists.