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The Shariah Advisory Council of Bank Negara Malaysia (the SAC) 162nd Meeting
The Shariah Advisory Council of Bank Negara Malaysia (SAC) held its 162nd meeting on 29 September 2015. The meeting discussed among others the proposal by the industry on the variations in takaful plan structure; and the reference manuals to the SAC by Bank Negara Malaysia (BNM) and Islamic financial institutions (IFIs).
Proposed variations in takaful plan structure
The SAC has approved a proposal on variations in takaful plan structure that takaful operator may create a second tabarru` fund in relation to cash payout benefits in addition to the existing tabarru` fund. The fund is created with consent of all participants for the purpose to cover insufficiency in the participants’ fund to pay cash payout benefits. This decision is based on the principle of freedom to enter into a contract and to agree on terms and conditions related to tabarru`, provided that it does not contradict the Shariah principles. It is also in line with the previous SAC’s resolution that the payment of takaful benefits from tabarru` fund can be made contingent upon specific events beyond those arising from a defined financial loss or a misfortune subject to agreement by the participants.
Reference manuals to the SAC
The SAC has also endorsed the reference manuals to the SAC by BNM and IFIs. Following this endorsement, any reference made to the SAC by BNM and IFIs on Shariah issues shall observe procedures as outlined in the reference manuals. These reference manuals once issued will serve as guide in referring to the SAC for ruling or seeking their advice.
