SHARI AH ISSUES IN THE OPERATION OF RETAKAFUL AND REINSURANCE: A PRELIMINARY EXPLORATION FROM SHARI AH PERSPECTIVE

This article attempts at exploring various Shari ah issues related to the practice of takaful, retakaful, insurance and reinsurance and interaction between them in the practice of retakaful. It explores the practice of retakaful and its importance in modern takaful. The paper discusses the ruling disallowing takaful companies to cede part of their exposure to reinsurance companies on the premise of bajah and necessity. It also discusses the permissibility of allowing retakaful companies to accept ceding from conventional insurance. Various opinions, fatwa and rulings and other relevant issues have been analysed. lt is found that these practices could be accepted subject to certain conditions. The paper argues that since they are allowed based on hajah and rjarurah, a revision should be conducted from time to time to ensure that the practice is really in compliance with this exceptional ruling.