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🌙Takadao Shariah Board Meeting Report 3

Date: 22 October 2023 / 14:00 PM KSA / GMEET


Record of Attendance: Reza, Hamid, Dr Hany, Morrad


- Discuss shariah matters in relation to Takasure

- Benefit multiplier

Meeting Summary

During the meeting, there was a discussion about the adjustment of the benefit multiplier and cancellations of policies. It was noted that there will be a haircut for operator profits to ensure the fund's solvency. However, there was concern about user satisfaction if there is no cancellation option, and whether this would go against Shariah principles. The importance of competing with global insurance companies was highlighted, which complicates the fund's model. The topic of allowing cancellations was also discussed, with the suggestion to initially not allow them until there is a sufficient number of participants. The need for more information on benefit multiplier options was emphasized, as well as the importance of disclosing the conditions Tabarru' to participants. Lastly, the establishment of an internal Shariah audit department was discussed, with the task of preparing the work and discussing with the external Sharia board.

1. Benefit multiplier adjustment and cancellation

  • There will be a haircut for the operator profits, which is their share of the funds in return for managing the fund, to ensure the fund remains solvent and able to pay for those in need.

  • Don't know if it will go down well with users, if there is no option to cancel. We are essentially competing with global insurance companies, global life insurers.

2. Cancellation Option

  • To minimize risks, it was suggests to not allowing cancellations initially until there is a sufficient number of participants to establish the law of large numbers, which reduces the standard deviation of losses. This approach aims to ensure the fund remains self-sustainable and reflects the principles of the shariah concept because members are making a donation.

3. Benefit Multiplier

  • It is crucial for the one providing the proceeds or contributions to know the mechanism of the Benefit Multiplier in the terms and conditions.

4. Internal Shariah Audit Department

  • We will schedule in the future an external shariah audit by the Shariah Bureau from Bahrain, who will follow not only on the fatwa but on the Shariah concept of the project.

  • Information related to compliance should be disclosed to the participants on a regular basis.

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