First Takaful Window in Yemen
The Takaful industry has lately witnessed significant developments in the Arab and Islamic worlds, and it will score the same bright results of conventional insurance in Yemen.In 2008, UIC opened the first Takaful window in Yemen, offering all lines of insurance under supervision from the company's Shariah Board.
The Takaful "window" is a separate department within the company transacting insurance on an Islamic basis.
UIC intends to keep up with such fast-paced progress and this is a proof of the UIC's commitment to the development of the insurance industry and the economic sector in Yemen.
Takaful sound a positive response towards the Shariah-compliant services from Yemeni public and, help boost the insurance image and increase penetration rates.
Takaful Insurance Overview:
Takaful is an Arabic word meaning “guaranteeing each other” or "joint guarantee".
The Tabarru' system is the main core of the Takaful system making it free from uncertainty and gambling.
Tabarru' means "donation; gift; contribution." Each participant that needs protection must be present with the sincere intention to donate to other participants faced with difficulties. Therefore, Islamic insurance exists where each participant contributes into a fund that is used to support one another with each participant contributing sufficient amounts to cover expected claims.
The objective of Takaful is to pay a defined loss from a defined fund. Muslim jurists conclude that insurance in Islam should be based on principles of mutuality and cooperation. Encompassing the elements of shared responsibility, joint indemnity, common interest and solidarity.
The principles of Takaful insurance are as follows:
• Policyholders cooperate among themselves for their common good.
• Every policyholder pays his subscription to help those that need assistance.
• Losses are divided and liabilities spread according to the community pooling system.
• Uncertainty is eliminated in respect of subscription and compensation.
• It does not derive advantage at the cost of others.
Theoretically, Takaful is perceived as cooperative insurance, where members contribute a certain sum of money to a common pool.
The purpose of this system is not profits but to uphold the principle of “bear ye one another’s burden.”