During negotiation of an retakaful deal with an important client, an email with attachment landed in my inbox. It was from that important client. Body of email was fine and I straight to open the attachment. The attachment was draft of contract wording that we proposed to them a few days ago, on which they have put their comments, revision proposals and queries for clarification.
One of the sentence in our draft was “…mutually agrees to help other Takaful Operators that contribute towards the Retakaful Fund in the event of loss or damage as per terms of this agreement.” This is a very important sentence that expresses the very core principle of takaful (and retakaful), which is to pool resources, in this case the fund, in order to help each other among fellow members of the pools who suffer from a well-defined loss or misfortune arising out of or as a consequence of a well-defined perils or events.
The best part was the client comment on this particular sentence, “Please confirm this sentence is correct since we are not sure whether we agree to help other Takaful Operators (participants).” What?!
Oh Dear, Takaful industry, and Islamic Finance in general, do have very very long way to go.
Kuala Lumpur, 28 February 2013