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- PublicationIndicators of takaful awareness among KuwaitisAhmad Al Razni Al Shammari; Younes Soualhi (American Research Institute for Policy Development, 2015)
This research examines the awareness of takaful among Kuwaitis. It endeavours to determine any significant differences and conformities between demographic variables and the four aspects of awareness concerning general information, the features of takaful, Shari'ah compliances, and motives of takaful. The research adopted a quantitative research design. Descriptive, T-test, ANOVA, and Discriminant analyses were employed to analyse the data collected via questionnaires. The research sample consisted of a total of 640 Kuwaitis from which 52% of the participants have not heard of takaful despite the existence of 14 takaful operators in Kuwait. More than 60% of the participants were unsure as to how their contributions would be invested. They were particularly concerned whether it be Shari'ah compliant or not. In addition, two-thirds of the respondents were unaware that they were eligible to receive part of the surplus, if any.
- PublicationEvidence in the Quran related to credit card transactionsAhmad Abdur-Raheem Sabree; Younes Soualhi (Islamic Bank Training and Research Academy, 2015)
The common academic discourse within Islamic banking related to the use of credit cards has generally been silent on Islamic interpretations and analysis of the technological aspects of the transactions. There seems to be a gap of understanding amongst academicians as to how these technologies work and therefore little has been addressed as to the ethical nature embedded into the structure of the commonly used technologies in banking. This paper addresses the technology behind credit cards and seeks to elaborate the Islamic context in which the various aspects of the technology can be interpreted. The purpose for writing this paper is to show that the basic principles behind how credit card technology works already exist in the Quran.
- PublicationChallenges of developing a takaful retirement annuity plan in MalaysiaYounes Soualhi (Emerald Publishing Limited, 2017)
This paper aims to explore the challenges facing the development of a takaful retirement annuity plan in Malaysia. It also aims at exploring a new platform to re-launch the same product after being withdrawn from the Malaysian annuity market a few years ago. The research adopts a qualitative approach to address the possible challenges hindering the development of a takaful retirement annuity plan in Malaysia. The research will not discuss the Shari'ah issues deemed settled in previous researches but will only focus on technical challenges related to the instruments of investment and prudential measures. The research found that various challenges face the development of a takaful annuity plan in Malaysia. Some of those challenges are the downsizing of the sukuk market, the shortage of long-term sukuk, longevity risk and risk-based capitalization. The research found that there is a need for a diversified portfolio of securities instead of solely using sukuk as an investment instrument in this product. Re-launching the takaful annuity plan in Malaysia requires the identification of actual challenges facing the development of such a product. The product purported to be re-launched would benefit a large segment of retirees who do not have enough savings during the retirement age. The introduction of such a product will also expand the takaful market in annuities, which remains untapped.
- PublicationShari'ah framework for pricing family takaful productsYounes Soualhi; Fares Djafri (IIUM Press, 2021)
This research investigates the Shari'ah compliance of the pricing elements used in family takaful products. The reviewed literature has revealed a great deal of emphasis on the Shari'ah aspects of the takaful contract, distribution of surplus, models used, incorporating waqf in takaful, and the relationship among the parties. Other research has focused on the operational and technical aspects of takaful such as underwriting, pricing, reserving and risk management. None of these studies has addressed the Shari'ah compliance of the pricing elements of family takaful products. Through qualitative research using open-ended interviews as well as content analysis, this research analyses the conformity of family takaful pricing mechanism with the Shari'ah principles of price-setting (tas'ir). The research findings indicate that the assumptions of mortality and morbidity are Shari'ah compliant based on the principles of ibahah (permissibility), maslahah (public interest), istiqra' (induction) and 'urf (custom). However, the investment returns assumption is not quite fair to the shareholders should there be a loss in the investment. The research also indicates that the concept of time value of money is a Shari'ah compliant element that can be used to price family takaful products. Further, the findings highlight that the pricing elements such as health condition are deemed unfair by some practitioners. Similarly, adding an extra loading to the contribution because of family medical history should not be taken for granted.
- PublicationThe practice of takaful benefit (nomination) in the context of IFSA 2013: a critical appraisalSaba' Radwan Jamal Elatrash; Younes Soualhi (Emerald Publishing Limited, 2016)
Nomination, in the context of takaful (Islamic insurance), involves the takaful participant nominating a person to receive the takaful benefits in the event of the participant's death before the maturity of the takaful plan. Distribution of the takaful benefits that are to be received upon maturity of the takaful plan is a main concern arising in family takaful, an Islamic alternative to life insurance. Upon the death of the participant, the takaful benefits may either be payable to the estate of the participant or to a person nominated by the participant as the sole recipient of the benefits of such a takaful policy. The effect of such a nomination is the central focus of this research paper. Reference to the Islamic Financial Services Act 2013 (IFSA) is crucial to identify the nature, position and effect of nomination in Malaysia.
- PublicationThe maqasid filter in takaful auditSheila Ainon Yussof; Younes Soualhi (The Malaysian Current Law Journal Sdn Bhd, 2012)
Islamic financial institutions in conducting regular audits must look for evidences in their contracts, processes and activities that genuinely support the goals and objectives of the Shari'ah (maqasid al-Shari'ah). The maqasid of the Shari'ah concerning all kinds of economic wealth can be summarised under five parameters/criteria: 'adl (justice) in handling it; wuduh (transparency); hifz (preservation); thabat (durability); and rawaj (marketability) or a fair circulation of wealth in the hands of as many people as possible. Specific issues identified in family takaful operations are used to determine whether the application of the maqasid filter based on the above criteria can help assure halal and wholesome profits that are enhanced by the maslahah or public benefit of growth and preservation and just distribution of wealth and the attainment of sustainability goals to support future generations.
- PublicationConceptual framework of internal Shari'ah audit effectiveness factors in Islamic banksLatifah Algabry; Syed Musa Alhabshi; Omar Alaeddin; Younes Soualhi (Emerald Publishing Limited, 2020)
The main purpose of this research is to figure out the most effective determinants that play a vital role in enhancing the effectiveness of the internal Shari'ah audit in the Islamic banking industry. This paper reviews the existing literature to build comprehensive knowledge that would assist in determining the main factors that impact on the effectiveness of Shari'ah audit in Islamic banks. This research proposes a conceptual framework of factors that impact on Shari'ah audit effectiveness in IBs based on previously published studies. The proposed framework includes external and internal factors as well as internal Shari'ah audit structure, process and requirements. First, the regulators need to provide a detailed framework for Shari'ah audit which covers the main requirements for effective Shari'ah governance. Second, Islamic financial institutions (IFIs) need to pay more attention to following the Shari'ah audit process in order to achieve the objective of effective Shari'ah governance. Finally, the dearth of empirical research on the role and effectiveness of Shari'ah audit in Islamic banking highlights the need to develop an appropriate methodology to enhance the study of the effectiveness of Shari'ah governance practices. The Shari'ah ensures compliance with its rules and regulations and enhances the soundness and credibility of the Islamic finance industry. This study identifies a number of issues that require further investigation in order to establish a better system of Shari'ah audit and to identify the factors that affect Shari'ah auditing practices. This paper is unique in covering the main elements that have influence on the effectiveness of Shari'ah audit and proposes them in one framework.
- PublicationShari'ah inspection of surplus distribution in takaful operationsYounes Soualhi (IIUM, 2010)
This research intends to shed light on a number of issues related to surplus distribution in takaful. The first part is devoted to revisiting the main financial concepts related to the surplus such as the underwriting surplus and profit. Modes of distribution such as pro-rata and offsetting will also be discussed in the light of equity principle advocated by Shari'ah. The second part deals with the major juristic views and doctrines delineated in favor of surplus distribution. Legal doctrines such as the ownership or otherwise of the surplus after donation would be meticulously discussed and reviewed in the light of current practices of takaful operators. The last part deals with a general outline of Shari'ah parameters in relation to equitable surplus distribution. This is followed by a scrutiny of surplus distribution practices of some modern takaful operators both in Malaysia and abroad. The research argues that while it is strongly recommended to redistribute the surplus to the participants only, there is a considerable Shari'ah ground allowing takaful operators to share in the surplus for reasons outlined in this research.
- PublicationIslamic finance: Shariah and the SDGs - thoughts leadership series part 4 - October 2021Younes Soualhi; Fares Djafri (Islamic Finance Council UK, 2021)
This report is the last part of a four-part thought leadership series delivered by the International Shari'ah Research Academy for Islamic Finance (ISRA) in partnership with the Islamic Finance Council UK (UKIFC). The series is intended to inspire IFIs to embrace the SDGs and demonstrate to the world that consideration for people, planet and purpose can coexist with profit and form the heart of the next generation of Islamic financial products. This part will mainly document the current level of knowledge, understanding and perspectives on the SDGs amongst key IF industry stakeholders, primarily Shariah scholars. The concept of sustainable development was articulated for the first time in the Brundtland Report, also called "Our Common Future", published in 1987 by the World Commission on Environment and Development (WCED) and supported by the UN. According to the Report, sustainable development is defined as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs".
- PublicationBay' al-dayn wa-atharuhu fi al-aswaq al-maliyahAwali Muhammad Sharif; Younes Soualhi (IIUM, 2011)
The sale of debt is part of the jurisprudence of Islamic financial transactions that is used by people for a long time; however, it has become more prevalent in the present day. It is among the features of the modern era that an individual is either creditor or debtor, rather modern day institutions are based on debt transactions such as financial markets. A great number of people and institutions are dealing with debt- based transactions in all its forms and types without knowing whether this kind of transaction is halal (permissible) or haram (prohibited); this negligence is pointed out in the Prophetic tradition that states: "A time will come when a man doesn't mind if he is earning halal or haram money". In addition to that all types and forms of the sale of debt have significant impact on the deterioration of the traditional financial markets all over the world; it has become in the present day the anchor of financial markets which handle thousands of billions of dollars. Today, the world is drowning in debt at the level of individuals, companies, governments and international.
- PublicationIshkalat namadhij al-ta'min al-takafuli wa-atharuha fi alfayid al-ta'mini: rukhyat fiqhiyyat naqdiaGhalia Bouhedda; Younes Soualhi (IIUM, 2013)
Although three decades or more have elapsed since the emergence of takaful industry, a period in which this industry has received wide acceptance and witnessed a great development in its operations and products, the takaful models that are being implemented in it have not been free of many juristic and technical problems. This is an agreed upon fact among Shari'ah scholarly authorities and practitioners alike; these problems concerns mainly the ownership and distribution of the surplus. This situation urged some Shari'ah institutions of worldwide scholarly authority (such as the International Fiqh Academy, one of the agencies of OIC) to call for the need of more research in order to develop a new model that would overcome the defects of the existing models that are in use in takaful industry, be more compliant with the Shari'ah rules and fulfilling its objectives, and in harmony with the legislative regimes governing the insurance sector in the countries that are more receptive to takaful insurance. In light of the above, the present article examines the most critical Shari'ah issues that have been raised against the existing donation or tabarru'-based takaful models (such as the nature of donation, the transformation of donation relationship between the insured and the tabarru' fund into an exchange relationship, considering the surplus as profit in the mudarabah model though it is in no way an addition to the capital, the legitimacy of the distribution of surplus among the insured and the takaful company, the ownership of the fund, etc.). The article also looks into some of the technical problems facing takaful insurance, such as including the accounting basis of insurance coverage, agency problems, etc. Special attention has been given to issues pertaining to the surplus, given the fact that it is the most problematic matter in takaful industry on which there has been much debate and controversy; in which respect the article has shown that the existing applied models have not been able to provide proper solutions. Finally, the article examines critically the wadi'ah-based model proposed by the International Shari'ah Research Academy for Islamic Finance (ISRA), thus evaluating, amending and developing it in such a way as would make it juristically more sound and capable of overcoming the problematic issues of the existing models.
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