Article (6) Template For The Annual Shari’ah Report (English)

N 880/2024 Effective from 9/2/2024

Template for the Annual Shari’ah Report (English)

Annual Report of the Internal Shari’ah Supervision Committee of (name of theTakaful Insurance Company)

Issued on: (issue date)

To: Shareholders of (name of the Takaful Insurance Company) (“the Company”)

After greetings,

Pursuant to requirements stipulated in the relevant laws, regulations and standards (“the Regulatory Requirements”), the Internal Shari’ah Supervision Committee of the Company (“ISSC”) presents to you the ISSC’s Annual Report for the financial year ending on 31 December (“Financial Year”).

1.	Responsibility of the ISSC In accordance with the Regulatory Requirements and the ISSC’s charter, the ISSC’s responsibility is stipulated as to: undertake Shari’ah supervision of all businesses, activities, products, services, contracts, documents and business charters of the Company; and the Company’s policies, accounting standards, operations and activities in general, memorandum of association, charter, financial statements, allocation of expenditures and costs, and distribution of profits between participants’ accounts and shareholders’ accounts (“Company’s Activities”) and issue Shari’ah resolutions in this regard, and determine Shari’ah parameters necessary for the Company’s Activities, and the Company’s compliance with Islamic Shari’ah Provisions within the framework of the rules, principles, and standards set by the Higher Shari’ah Authority (“HSA”) to ascertain compliance of the Company with Islamic Shari’ah Provisions. The senior management is responsible for compliance of the Company with Islamic Shari’ah Provisions in accordance with the HSA’s resolutions, fatwas, and opinions, and the ISSC’s resolutions within the framework of the rules, principles, and standards set by the HSA (“Compliance with Islamic Shari’ah Provisions”) in all Company’s Activities, and the Board bears the ultimate responsibility in this regard.
2.	Shari’ah Standards The ISSC shall comply with the Shari’ah standards issued and approved by the HSA.
3.	Duties Fulfilled by the ISSC During the Financial Year The ISSC conducted Shari’ah supervision of the Company’s Activities by reviewing those Activities, and monitoring them through the internal Shari’ah control division or section, internal Shari’ah audit division or section, and (if applicable) external Shari’ah audit, in accordance with the ISSC’s authorities and responsibilities, and pursuant to the Regulatory Requirements in this regard. The ISSC’s activities included the following:
	a.	Convening (number) meetings during the year.
	b.	Issuing fatwas, resolutions and opinions on matters presented to the ISSC in relation to the Company’s Activities.
	c.	Reviewing and monitoring compliance of policies, procedures, accounting standards, operating model and product structures, contracts, documentation, business charters, and other documentation submitted by the Company to the ISSC for approval.
	d.	Reviewing the Takaful Insurance operating model, underlying contracts and supporting materials (e.g. underwriting and claims settlement manual/guidelines etc.).
	e.	Reviewing and approving the Company’s products, services and marketing materials.
	f.	Reviewing and approving the policy and procedures that govern Takaful Insurance Accounts (e.g. segregation of accounts and transparent financial resources flow between the accounts etc.), surplus distribution, and deficit coverage.
	g.	Ensuring the compliance of the segregation between Takaful Insurance accounts and shareholders accounts, allocation of costs and expenditures on the accounts, and the underwriting surplus policy with Islamic Shari’ah Provisions.
	h.	Reviewing the financial statements of the Company to ensure compliance with Islamic Shari’ah provisions.
	i.	Reviewing the investment policy and approving the Shari’ah screening criteria to ensure the investment activities in both shareholders’ accounts and participants’ accounts, are comply with the Provisions of Islamic Shari’ah.
	j.	Reviewing the risk ceding arrangements of the participants’ account with other insurance companies (Retakaful insurance, conventional reinsurance, co-insurance with Takaful insurance/conventional insurance companies) and confirming its compliance with Islamic Shari’ah Provisions.
	k.	Supervision through the internal Shari’ah control division or section, internal Shari’ah audit division or section, and (if applicable) external Shari’ah audit, of the Company’s Activities including supervision of executed transactions and adopted procedures on the basis of samples selected from executed transactions, and reviewing reports submitted in this regard.
	l.	Providing guidance to relevant parties in the Company - to rectify (where possible) incidents cited in the reports prepared by internal Shari’ah control division or section, internal Shari’ah audit division or section, and/or (if applicable) external Shari’ah audit - and issuing of resolutions to set aside revenue derived from transactions in which non-compliances were identified for such revenue to be disposed towards charitable purposes.
	m.	Approving corrective and preventive measures related to identified incidents to preclude their reoccurrence in the future.
	n.	Reviewing the Zakat calculation and specifying the amount of Zakat due on each share of the Company.
	o.	Communicating with the Board and its subcommittees, and the senior management of the Company (as needed) concerning the Company’s compliance with Islamic Shari’ah Provisions.
	p.	(add other works that the ISSC wants to mention in this report).
		The ISSC sought to obtain all information and interpretations deemed necessary in order to reach a reasonable degree of certainty that the Company is compliant with Islamic Shari’ah Provisions. (the phrase “External Shari’ah audit” is included in the report if applicable, otherwise it should be deleted).
4.	Independence of the ISSC The ISSC acknowledges that it has carried out all of its duties independently and with the support and cooperation of the senior management and the Board of the Company. The ISSC received the required assistance to access all documents and data, and to discuss all amendments and Shari’ah requirements. (Factors that have affected independence, if any, must be mentioned).
5.	The ISSC’s Opinion on the Shari’ah Compliance Status of the Company Premised on information and explanations that were provided to us with the aim of ascertaining compliance with Islamic Shari’ah Provisions, the ISSC has concluded with a reasonable level of confidence, that the Company’s Activities are in compliance with Islamic Shari’ah Provisions, except for the incidents of non-compliance observed, as highlighted in the relevant reports. The ISSC also provided directions to take appropriate measures in this regard. (Add a statement on any other breaches to the Shari’ah provisions, resolutions and controls established by the Higher Shari’ah authority, if applicable). The ISSC formed its opinion, as outlined above, exclusively on the basis of information perused by the ISSC during the financial year.

Signatures of members of the Internal Shari’ah Supervision Committee of the Company

Member’s Name	Type of Membership	Signature
Member’s Name	Type of Membership	Signature
Member’s Name	Type of Membership	Signature

(End of the Template)