Structure of Re-takaful Products
The basic operational frameworks of Re-takaful and conventional reinsurance do not differ very much—they only contradict one another in certain conditions. Conventional reinsurance has always been in opposition with Shari’ah regulations, as it embodies three strictly prohibited fundamentals—Gharar (uncertainty), Maisir (gambling) and Riba (interest). These concepts will result in unfair contribution between different participants, including the possibility of a participant having an advantage over another participant. Another aspect that is strictly prohibited in Re-takaful business is the portion of profit commission that may be earnt from the Re-takaful, as it results in changes to Re-takaful fees.