Ownership of family takaful banefit in nomination and hibah cases

Abstract

Ownership indicates right over a property, which entitles a person with particular causes, either through his own effort by taking control of permissible things, or the efforts of others. In takaful, the efforts of the participant in taking up the policy and paying the monthly contributions, will entitle him the ownership of takaful benefits. This contention is based on the fact that one’s effort becomes a justification for ownership. Therefore, upon the participant’s death, the takaful benefits will be distributed among the heirs of the participant according to the law of fara’id or hibah. This study examines the issue of ownership over takaful benefits in the Participant Risk Fund (PRF). In PRF, the ownership of this fund is jointly collective by the participants; therefore, it has led to disputation among Sharīʻah scholars to determine the status of ownership of this fund. Besides, this study also identifies the validity of executing hibah in PIF as this issue is much related to the conditions of hibah. This research adopted semi-structured interviews to collect both qualitative and quantitative data from 11 Sharīʻah advisors, 11 Sharīʻah officers and three takaful experts from 11takaful operators in Malaysia. This study finds that Sharīʻah scholars are not unanimous in determining the status of ownership in PRF. Besides, this study also finds that hibah ruqba is important based on the participant’s intention for maslahat of his intended beneficiary. In the present takaful practice, all takaful operators in Malaysia distribute takaful benefits to the nominee whether as an executor through fara’id or as a beneficiary through hibah. The main contribution of this study is to explain the basis of IFSA 2013 provision that serves as material reference to all takaful operators in order to grasp the provision of IFSA 2013 in respect to distribution of takaful benefits. Finally, this study also confirms, by empirical study, that hibah distribution complies with Schedule 10, Para 3(1), IFSA 2013.