Question

1-from conventional insurance What is the most important feature that distinguishes takaful?  

2-Explain briefly the difference between a pure wakalh model and a pure mudarabah model in Islamic insurance.?

3-How the author consider the relationship between policyholders and TOs as a principal-agent model.?

4- What are the main conclusions of this paper?

Answer 1

Question-1-from conventional insurance What is the most important feature that distinguishes takaful?  

Answer- Takaful and conventional insurance may seem similar as they both protect against financial loss but they aren't same.

The most important feature that distinguishes Takaful from conventional insurance is that in a conventional insurance there is transfer of risk from insurance policy holder to the insurance company in return or exchange of premium paid for the insurance policy.The risk is beard by the insurance company according to the terms and conditions of rhe policy so like this in this manner tje insurance company is the risk-bearer.

In Takaful, the Takaful operator is the risk manager not bearer but Takaful operator also bears risk, whenever there is a deficit in the fund the shareholder of Takaful operator finances the deficits by means of interest free loans and these are repaid From the future surplus.

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