Legal and Shariah Issues in the Application of Wakalah-waqf Model in Takaful Industry: An Analysis

Abstract

The rapid growth of the Islamic finance industry invites the parallel progress of Takaful industry. The Takaful industry has grown based on various developing methods namely Mudharabah, modified Mudharabah, Wakalah, Wakalah-Waqf and even hybrid models. The Wakalah-Waqf model an extension of Wakalah model was proposed to provide a better solution for the existing models of Takaful business that received numerous criticisms from academics and its practitioners. However, there is a myriad of issues namely legal and Shariah issues pertaining to its operations that warrant intellectual discussion intended to provide proactive solutions for the benefit of the industry. Hence, the study aims to address the current legal and Shariah issues pertaining to its structure and practical operations. Eventually, the study seeks to suggest possible recommendations for the future growth of Takaful industry in Malaysia in particular and all over the globe in general.