Takaful:Pilihan atau Kewajiban?

“Adik ada RM500 ribu dalam akaun bank?” tanya seorang perempuan muda pada saya ketika keluar dari bank.

Suatu teknik permulaan yang baik saya kira untuk ice-breaking. Saya hanya tersenyum dan mengambil risalah yang beliau cuba hulurkan. Tatkala saya cuba untuk beredar pergi, saya menoleh ke belakang dan melihat ibu saya telahpun ‘termakan’ pujuk rayu perempuan muda itu.

“Marilah dengar dulu.” kata beliau setelah berjaya menarik minat ibu saya. Ibu juga menyuruh saya turut serta.

Melihat kami berdua telah duduk dan bersedia mendengar penjelasan beliau. Perempuan muda tadi pun memulakan penjelasan beliau.

“Kita tidak ada duit sejumlah ini dalam akaun bank kita, maka kita perlu bersedia hadapi masa depan yang tidak pasti. Sebab itu kita perlukan perlindungan insurans ini,” petah benar beliau berhujah. Cuma sahaja telinga saya alergik mendengar perkataan insurans (konvensional) tersebut.

Beliau terus bercakap tanpa henti, “Hanya dengan beberapa ringgit sehari, kita boleh dapat coverage sebanyak RM500 ribu terutamanya dalam khairat kematian dan hospitalization.”

Saya segera cuba memotong cakap beliau, “Kenapa jual insurans? Takaful pula bagaimana?”.

Saya cuba bertanya lagi, “Bukankah ada perbezaan ketara antara insurans konvensional dan Takaful? Dari segi kontrak (akad), pelaburan (patuh syariah), retakaful dan lain-lain?”

“Oh! Sama sahaja Takaful dan insurans. Saya lebih galakkan insurans sebab coveragenya lebih banyak, RM500 ribu setahun berbanding Takaful RM250 ribu setahun.” kata beliau slumber.

Saya sudah tidak senang duduk mendengar penjelasan beliau. Jika saya ialah Takaful Operator yang beliau naungi, inilah antara perkara yang saya takuti apatah lagi bagi seorang wakeel berstatus muslim – Misrepresentation dan mis-selling.

“Saya ada terbaca, bukankah insurans konvensional haram?” provok saya menguji pemahaman beliau dalam bidang yang beliau ceburi sebagai kerjaya ini, tanpa dapat saya nafikan dorongan beliau mempromosi insurans konvensional berbanding Takaful adalah disebabkan coverage setahun yang lebih besar dan dilihat menguntungkan pembeli insurans konvensional berbanding Takaful.

“Ya, memanglah. Tetapi saya yang lulusan Azhar ini pun ambil insurans.” Sekali lagi jawapan beliau slumber sambil menghulurkan kad beliau yang tertera nama dan B.A(Hons) Al-Azhar. Ini sekali lagi membuat saya sedikit skeptik dengan penjelasan lulusan Azhar. Hati saya berbisik, “Mungkin lulusan Azhar dalam bahasa Arab,bukan dalam bidang muamalat, mana mungkin jika dalam hal ehwal halal-haram sebegini sahaja tidak dapat dibezakan,ini amat memalukan.”

Melihat saya masih lagi ragu-ragu, beliau pun cuba meyakinkan saya lagi, “Insurans ini Mufti Penang pun subscribe, malah Tuan Guru Nik Aziz pun sama. Yang bezanya hanyalah di mana pelaburan itu disalurkan, ke Dana Ekuiti atau Dana Modal. Jika Muslim subscribe insurans, saya selalunya akan letak pelaburan melalui Dana Ekuiti berbanding Dana Modal supaya pelaburan tu islamik.”

Saya tergamam mendengar penjelasannya. Salah satu teknik penjual memang suka menggunakan nama tokoh-tokoh besar untuk melariskan perniagaan atau perbuatannya. Boleh sahaja saya tanya sumber kesahihanya, tetapi malas untuk berdebat panjang, maka saya hanya mampu tersenyum sinis mendengar penjelasannya.

“Bagaimana akak?” Tanya beliau kepada ibu saya yang hanya mendengar sahaja dari tadi. Beliau sebenarnya lebih cekap dan sudah cukup masak dengan benda-benda insurans sebegini. Cuma dari sudut islamik atau tidak, ibu selalu bertanyakan pada saya.

“Akak ikut dia sahaja, dia lebih tahu.” Jawab ibu saya ringkas, seolah-olah tidak mahu terlibat sama dalam perbincangan yang dilihat merumitkan.

“Oh, adik ini masih belajar? Di mana.” soal beliau. Saya masih lagi tersenyum.

“Di UIA,dalam bidang ekonomi.” jawab ibu pantas.

“Jika begitu mungkin adik lebih tahu tentang perkara ini?” beliau sudah tersipu-sipu entah mengapa, saya tidak tahu.

“Tahulah sedikit, tidak banyak.” jawab saya mengenangkan benda-benda asas dalam subjek Takaful yang saya pelajari semester itu.

Perbualan ini berlaku sudah lama, coverage dan polisi antara insurans dan takaful juga sedikit sebanyak telah berubah. Kini coverage insurans dan Takaful sudah sama dari sudut jumlahnya. Tidak lagi wujud ruang perbezaan ketara seperti perbualan di atas. Apakah anda agak saya akan jadikan orang sebegini sebagai agen Takaful saya? Saya juga tidak ingat bagaimana saya ‘melepaskan’ diri dari perbincangan tersebut dari pergi jauh. Tetapi saya masih ingat bagaimana saya 'basuh paradigma' beliau tentang perbezaan ketara insurans dan takaful (yang pada beliau hanya dilihat dari sudut pelaburan) kerana ia melibatkan halal dan haram yang jelas.

Saya memilih untuk berkongsi cerita ini dengan para pembaca bukan sekadar untuk menekankan tentang pengharaman insurans yang saya kira wajib untuk setiap muslim tahu, tetapi juga para agen muslim yang seharunya sedikit bijak dalam berbicara dan mengajak muslim yang majoritinya masih tidak bertakaful.

Jangan kerana kelancangan kita berbicara, imej Islam nampak buruk!

Ini belum lagi kisah agen (baca:wakeel) yang tidak menerangkan kepada pemegang polisi hak dan keistimewaan yang mereka dapat, yang bersetuju dengan polisi juga bersalah apabila tidak bertanya hak dan keistimewaan yang mereka layak dapat. Makanya kedua-dua pihak yang berkontrak bertanggungjawab atas apa yang dipersetujui, jangan pula kelak bila timbul masalah barulah ingin menuding jari di antara satu sama lain.

Hari ini ramai kawan-kawan saya menjadi agen Takaful. Saya yakin mereka lebih bijak dalam menjelaskan kepentingan Takaful yang ramai umat Islam kini pandang enteng. Di sebalik menghadapi masalah ramai umat Islam yang masih tidak mendapatkan takaful, wujud juga cabaran lain apabila sungguh ramai di luar sana yang telah berasa selesa dibaptiskan dengan insurans konvensional (peribadi,kereta,rumah dan lain-lain) yang saya kira amat penting untuk kita sama-sama sedarkan. Atas dasar itu saya berasa kagum dengan mereka yang menjadi agen Takaful (tidak kira apa jua nama Takaful yang anda promosikan). Semoga usaha kita semua menjadi salah satu aspek jihad ekonomi dan memberikan rezeki yang halalan thayyiban.

Sekadar perkongsian dan nasihat bagi mereka yang mengambil berat.

Courtesy to:

Ibn Yusof
9 Mei 2010 / 24 Jumad Awal 1431
2:58 p.m
www.ibnyusof.blogspot.com

Shari’ah scholars as an independent director : A proposal

1.0 Shari’ah scholars in IFIs

Malaysian rules and regulations have spelled out several provisions in relation to the establishment of Shari’ah Advisory Committee (SAC) in the islamic financial institutions in Malaysia. The existence of Shari’ah Advisory Committee (SAC) or Shari’ah Supervisory Board (SSB) is one of the most important governance mechanisms of an Islamic Financial Institution (IFI) to ensure the Islamic Financial Institutions (IFIs) are compliance with Shari’ah.

It is important for the SSB to understand their roles and responsibilities as well as the process of how an SSB should reviews the performance of a given IFIs. The roles and responsibilities of the SSB of IFIs as define by the AAOIFI connotes a greater duty of not only endorsing and approving the Bank’s products but ensuring its compliance through directing, supervising and importantly reviewing its operations. This actually has no difference than what define by IBA 1983 whereby the function of the Shari’ah committee is more than just an advisory role on the bank’s operation . Thus the SSB are considered to be responsible in most aspects of the bank’s operational.

The Shari’ah scholars who act as advisors grounded in endorsement of all products and services of their respective IFIs, without whom the compliance of the product to the Shari’ah would be questionable . This critical role is indiscriminate to all financial products, be it banking, takaful, capital markets, wealth management and so forth. According to AAOIFI standard, Shari’ah advisers can be defined primarily as "specialized jurists, particularly in fiqh muamalah and Islamic finance, entrusted with the duty of directing, reviewing and supervising the activities related to Islamic finance to ensure they are in compliance with Shari’ah rules and principles. The views of the Shari’ah adviser shall be binding in the specific area of supervision".

1.1 Role and responsibilities of Shari’ah scholars

As what explained above whereby the roles and responsibilities of the Shari’ah scholars as SSB in respective IFIs has a lot to do with ensuring the operational side of IFIs are Shari’ah compliance. Therefore, indirectly the Shari’ah advisor control what do’s and don’ts in the IFIs operational sides and their authority in approving products and services more or less determine the path of the IFIs in terms of growth and sustainability. Consequently, there should be no chance for conflict of interest between the Shari’ah advisor and the IFIs!

Another question mark that we feel important to raise is whether the endorsement in the yearly annual report where the Shari’ah advisor claims that “we hereby confirm that all the business activities fulfill the Shari’ah requirement”. Personally, we have a doubt; because it lacks the criteria of being independent. Our premise is that, the Shari’ah officer/advisor works in the organization, paid by the organization and where the one who approves the many products offered by the bank. Therefore, it does not seem right to have people from inside to make such claim. Even the financial reports are being validated by an external auditor.

2.0 Comprehend the position of Independent director and Shari’ah Scholars

Analyzing such statement above indirectly questioning why it is in the first place there is a need of independent director especially for Shari’ah scholars? As what explained above whereby the roles and responsibilities of the Shari’ah scholars as SAC in respective IFIs has a lot to do with ensuring the operational side of IFIs are Shari’ah compliance. Therefore, indirectly the Shari’ah advisor control what do’s and don’ts in the IFIs operational sides and their authority in approving products and services more or less determine the path of the IFIs in terms of growth and sustainability. Consequently, there should be no chance for conflict of interest between the Shari’ah advisor and the IFIs!

But currently, majority IFIs in the Islamic finance industry appointed the Shari’ah scholars and pays them as advisor for the IFIs. Therefore, there is a direct relationship between the Shari’ah advisor and the IFIs their working with. This kind of relationship reflects that the Shari’ah Advisory Committee (SAC) as not totally independent as what the bankers ought to be. Especially when such issues rise when in some cases like products and services by Malaysia’s IFIs, which are often, deemed not Shari’ah complaint in the more austere Gulf. These kind of issues being used by the critics as they called ‘Fatwa Shopping’ where the bankers phone up a Shari’ah scholar that are willing to give them a Fatwa to seal of approval, confirming the product is Shari’ah compliant by offer them a sum of money . Such claim analogically may be viewed as a glass of water with half empty or half filled. But on the other side, this kind of case will happen as long as the Shari’ah scholars are ‘attached’ with the respective IFIs.

3.0 Independent director in IFIs

The idea of having one of Shari’ah scholar as independent director in IFIs mainly because to ensure there are sound policies, procedures and effective and efficient monitoring systems with proper checks and balances can be done especially regards to Shari’ah matters in IFIs operational process. An independent director can be explained as :

a) not been employed by the Company
b) not, and is not affiliated with a company that is an advisor or consultant to the Company
c) not affiliated with a significant customer or supplier of the Company
d) no personal service contracts with the Company
e) not affiliated with a non-profit organization that receives significant funding from the Company
f) not employed as an executive of another company where any of the Company's executives serve on that company's board of directors
g) not a member of the immediate family of an individual who is, or has been during the past five years, employed by the Company
h) not a controlling person of the Company

In simple words, an independent director is one who is independent of management and free from any business or other relationship that could interfere with the exercise of independent judgment or the ability to act in the best interests of a listed company . The purpose of identifying and appointing independent directors especially the Shari’ah scholar is to ensure that the board includes directors who can effectively exercise their best judgment for the exclusive benefit of the IFIs, judgment that is not clouded by real or perceived conflicts of interest.

In IFIs case, the business operational processes represent Islamic business organization, it portrays the image of Islam, thus any actions or decisions have direct and indirect impact towards the teachings and religion of Islam. By having a Shari’ah scholar in as the independent director, the Shari’ah scholar can help the board to provides expertise and guidance on conformance to the Shari’ah principles in all matters of the IFI business operations.

Having a Shari’ah background person in the board of director and being independent will give good impression to the public. A Shari’ah scholar is a person with good reputation and character as well as possesses the necessary qualifications and expertise, particularly in fiqh muamalah and Islamic jurisprudence, and has experience and/or exposure in Islamic finance brings greater confidence from the public towards the IFIs. Stakeholder may feel relief if the independent director plays their important role as part of corporate governance: automatically maintaining public trust and confidence in the banking business.

4.0 Governance Framework: The way forward

Moreover, effective governance framework requires involvement of all stakeholders, namely, the board, senior management, and Shari’ah advisors that properly structured and complement each other in providing check and balances mechanism that strengthens the corporate governance practices. A committed and knowledgeable board is a cornerstone to an effective corporate governance system. Therefore having a Shari’ah scholar on board would help the IFIs via the necessary skills and experience towards achieving the IFI’s goals. This will eventually lead to a sound corporate governance practices that later on will contributes to situation where risk taking activities and prudence practices are appropriately balanced in the interest of stakeholders.

Besides that, an independent director comprises of Shari’ah scholar even only one of them being selected should be seen from a brighter side, this is when the role of the Shari’ah scholar as the Shari’ah Advisory Committee (SAC) as well as role as part of the boards can be strengthen when the Shari’ah scholar could fully utilize knowledge that he possess about market and industry. A dynamic mix of competent and diverse skill sets coupled with an appropriate tone at the top of practicing and promoting legal-ethical compliance and professional conduct are necessary ingredients for an effectively governed board.

To conclude, the appointment of Shari’ah scholar as an independent director will enhance the effectiveness of the board as the oversight body to oversee what the management does. Hence it will also help the company not only be independent according to the legislative but also independent in thought and action especially regarding the Shari’ah matters which are the back bone of the industry.
__________________________________________
References:

AAIOIFI, Accounting and Auditing Organization for Islamic Financial Institutions. (1999), Governance Standard for Islamic Financial Institutions. No. 1 - Shari’a Supervisory Board: Appointment, Composition and Report.

Aznan Hasan. (2009) How Shariah boards add value. Retrieved on March 8, 2010 from http://www.thefreelibrary.com/How+Shariah+boards+add+value.-a0212386367

Bursa Malaysia. (n.d). Corporate Governance Guide: Towards Boardroom Excellence. p.22-23.

Lencioni, P. M. (2007). The Five Dysfunctions of a Team: A Leadership Fable. Singapore; John Wiley and Sons (Asia) Pte Ltd.

John Foster. (2010). How Sharia-compliant is Islamic banking?. BCC News. Retrieved on March 23, 2010, from http://news.bbc.co.uk/2/hi/business/8401421.stm

Mohd Hairul et. al.(2009) The Practice of Shariah Review as Undertaken by Islamic Banking Sector in Malaysia. International Review of Business Research Papers. 5(1). p. 294-306.

Ibn Yusof
29 April 2010/15 Jumaada al-awal 1431
6:54 p.m
www.ibnyusof.blogspot.com

Islamic Financial Institutions:Between Values Inculcation And Profit Maximization

Leading an organization relates directly or indirectly with the worldview that drives the organization. Capitalism recognizes the need to achieve efficiency, as for the 'unlimited' demand that we get, we will always have 'limited' resources. That, we can say 'noble'. However, need to be understood that behind the ‘noble’ objectives of this worldview, they puts profit maximization as main objective above all cost[1]. A sustained growth due to the profitability gained by the organization however reflects absence and proves how problematic 'classical' capitalism worldview is hence you have to deal with such issues like exploitation of labor, disregard for society, deterioration of the environment and so forth.

Scientific and technological revolution had also played a big role in shaping industrial revolution. Protestant ethics also does help. It is being impregnated with enlightenment values that are humanist and secular in nature. Moreover, idea of Darwinism spillover effect unto economics thinking added the chaotic elements into the equation. This issue being highlighted by Prof. Syed Muhammad Naquib Al-Attas in many of his writings, whereby Western civilization is like broken mosaic[2]! So we must understand how these many pieces come and made up into a big picture. Thus we must go back to the fundamental discussion of how we should perceive the correct worldview.

If we wanted to conclude by saying sustainable growth and profitability of the organization is a valid measurement to value the effectiveness on the organizations inculcating the values, I doubt it. Since the values inculcated by the organizations should be seen from various aspects. Western economists like EF Schumacher, Theodre Roszack, Paul Hawken and so forth have already elucidating many good points about it. But the fact is Western big organizations with big amount of profit still having problem to adjust with the main problem they faced- which is inculcating correct values to their organizations before they end up with failure of ethic-management despite the fact of having good system of management. Some may take this issue as a serious problem while some others may still views growth of the organizations as their main objective although have shed people's blood and undermining the environment for mere profit making.

Western economics have teaches the important of ethics through ecological economics. Due to this some organizations which practices 'modern' capitalism includes other 'costs' into consideration, thus look at the socio-economic and environmental impact of its operation. But if you go deeper to the root cause, one will find the problem of worldview that can never be solve merely by introducing ecological economics. It needs the touch of faith-based system which we could firmly believe as a comprehensive system that includes value inculcation. A faith-based system that we believes able to shows the way of simplicity, active and real redistribution of wealth, with that the needs of society can be satisfied.

The question that we should not look back is whether in the context of IFIs, values inculcation in any of IFIs should be taken seriously since so called Islamic organizations shall not fall into this worldly trap of making money out of people's livelihood. Effectiveness of values inculcation on organizations should be measure from many aspects whereby not only emphasizing more on cost effectiveness, efficiency but rather how often do people consider things like equity, accessibility, availability, quality and so forth.

Ethical issues in IFIs should be viewed and considered as ‘cost’, or at least it is in the equation, and it yields positive results. Most people think that jump into the field of finance or the likes just the matter of getting a hold of a job in the IFIs and make money. Are we go to universities for such objective! Then what about the importance of ethics and the fiqh muamalah? Of this catastrophic we face now, IFIs responsible to have illuminated Islamic worldview to be implemented in the fundamental of business operations.

Profit maximization indeed recognized in Islam, however it is not the ultimate objective of how Islamic organizations should be operates. Interesting to note here, Tan Sri Muhammad Ali Hashim's idea on ‘Jihad Business’, CEO of Johor Corporation with his idea reflects an interesting idea of how Islamic organizations should be operated. The idea of jihad in doing business is such a unique idea and reflects that religion should, ideally, lower the standards of the believer, that they should be satisfied with less, differing the idea on how the Western view economics with the worldview of ‘unlimited wants’ that driven the market with the idea of profit maximization[3].

Ethics, is a way a validating actions. IFIs are being understood to be govern by Shariah, where actions are categorized into valid, invalid, disliked, recommended, or indifferent. Thus without understand and have full knowledge of religion boundaries (Shariah framework), IFIs can’t easily validate some pretty sick stuff that will later on jeopardize their image as Islamic organization. Example is when validating such products or services that lead to the economic destruction in the name of market 'justice' and efficiency; this is not how the spirits of IFIs should look like.

Value inculcation in IFIs shall be given extra attention from those in leadership positions in IFIs to start to affect the type of change needed to prevent dysfunction in the organization as laid out by Patrick Lencioni which he sees from the matters of trust, commitment, conflicts, accountability and results-driven[4]. Effective value inculcation in IFIs can be seen from the products and services that being offer to the society as a whole. This is where the Maqasid Shariah plays its role in their functions.

The prime objectives of Maqasid al-shariah is centralized on the objective of accomplishing the development of both the spiritual and socio-economical well-being of Muslims. Adl or Justice is another very important principle and objective of the Shariah and its purpose is to create and maintain equilibrium within a society. “The goal of shariah is the good (maslahah) of human being as vicegerent in the society he lives in, accountable to Allah who made him in charge for establishing justice and fairness, ensuring intellectual and social wellbeing and psychological contentment for every member of the ummah.”[5]. The fulfillment of justice can bring social and moral uplift in the society in which there is no crime, life security, honors that could bring peace in the society.

Thus IFIs should play its role by serving social objective, not only an individual objective. The noble vision to promote social welfare of the society is in need to develop a welfare economics oriented paradigm, and he also believes that the social justice and ethical norms can be exercised. Despite that fact, IFIs are equally expected to play a leading role in promoting social-welfare. Their opinion are supported by the majority of the Muslim economists who posit that Islamic banking is much more than offering Shari`ah compliant products. It is a system which aims at making a positive contribution to the fulfillment of the socio-economic objectives of the community at large[6].

From the discussion above we must understand that the value inculcation may be cultivated through top-down approach, or/and with grassroots approach. Approaches that encompass 2-level of bottom-up development which is in terms of individuals and the organizations themselves.

The individual aspect relates to something that within human’s spiritual domain; development of aql (reasons), qalb , nafs.This will help to determine one’s attributes; mazmumah, mahmudah. These feeling of inward relation are between individuals with God via faith and piety and the outward relation with mankind by good attributes. Cooperation shown merely to support such fardhu kifayah systems form a sustainable relationship as mentioned in the Quran ‘wa Hablum Minanas wa Hablum Minallah’. These reflects the senses of belongings that will never be found in any other worldview other than faith-based system[7].

In a small scale of IFIs, it is something that potential and manageable to be implemented and surely something will that later on result an effective management. Development of human inner sphere is considered to be more important than profit maximization. We believe that Islamic development afresh within human inner-self Islamic development paradigm can help the individuals to survive side by side with existing conventional development system. Moreover, the system able to provide comprehensive Islamic development model which elastic enough to expand to state level wherever possible. This is what we believe as the power of grassroots approach if the IFIs successfully implementing it.

Wallahu'allam.

Ibn Yusof

25 March 2009 / 9 Rabi Thani 1431

11.18 p.m

www.ibnyusof.blogspot.com

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[1] Shutt. H. (2005). The Decline of Capitalism: Can a Self Regulated Profits System Survive?. Malaysia: SIRD.

[2] Syed Muhammad Naquib Al-Attas. (1995). Prolegomena to the Metaphysics of Islam: An Exposition of the Fundamental Elements of the Worldview of Islam. Kuala Lumpur: ISTAC.

[3] “Jihad Biisnes” Satu Pendekatan Strategik Ke Arah Pemerkasaan Ekonomi Ummah, Kongres Ekonomi Iislam Ke Tiga (Ke-3)

[4] The Five Dysfunctions of a Team: A Leadership Fable

[5] Shidiqi, Nejatullah (2006), Islamic Banking and Finance in Theory and Practice: A Survey of State of The Art, Journal of Islamic Economic Studies, Vol.13 No. 2, p. 6.

[6] Asyraf Wajdi, and Nurdianawati Irwani Abdullah. (2006). The Ideal Of Islamic Banking: Chasing A Mirage?

Retrieved January 16, 2009, from www.asyrafwajdi.com/download.php?f=0013(downloaded-fromasyrafwajdi.

com).pdf

[7] Muhammad Suykri Salleh and Choudhury, M.A. (1996), 'Grassroots Approach to Sus- tainable Development', Humanomics, Vol. 12, No. 3.