02-MAY-14

» The Fifth Forum of Cooperative Insurance Focused Discussions

The Fifth Forum of Cooperative Insurance Focused Discussions

The Fifth Forum of Cooperative Insurance in Abu Dhabi May, 2014
The fifth forum of cooperative insurance was held and organized by the World Islamic
Association of Economy and Finance originating from the Muslim World League in Abu Dhabi, the United Arab Emirates on 19/20 Rajab 1435 A.H as of 18/19 May 2014 A.D. It was attended by an elite group of scientists, researchers, officials, and specialists in the fields of insurance, reinsurance, and cooperative reinsurance and those who are interested in insurance in general and cooperative insurance in particular.
The attendants have reviewed the 18 research and working papers submitted and discussed the ideas and proposals included in detail. The points are:

• The future of cooperative insurance.
• The operations of cooperative reinsurance.
• The financial solvency and accounting management of cooperative insurance companies.
• Policies and models of cooperative reinsurance.

Thanks to Allah, the forum has ended with the following recommendations:
1- Requesting an effective supervisory, guiding, and regulating role by the supervisory bodies and official authorities that regulate the cooperative insurance and reinsurance in its different kinds in particular and issuing Shar’i standards in cooperation with the Shar’i bodies and the jurisprudence councils.
2- Abiding by the Shar’i controls and resolutions issued by the jurisprudence councils and making use of the Shar’i standards issued by the AAOIFI concerning the cooperative insurance and reinsurance.
3- Activating the role of Shar’i supervisory bodies in the cooperative reinsurance companies to control their businesses and activities.
4- Encouraging the formation of joint stock cooperative reinsurance companies which are compliant with the Islamic Shar’ia rulings and enjoying strong financial capabilities and solvencies to enable them to compete in the global markets in cooperation with the Islamic International organizations and their related bodies, the Islamic financial and banking institutions, and the administrations of Islamic endowments. 5- Establishing centers and institutes to support and enhance the Islamic reinsurance companies in the fields of training, rehabilitation, apprenticeship, accounting, human resources development, and consultancies.
6- Requesting the cooperative insurance and reinsurance companies to cooperate in raising the awareness of the concept and the advantages of cooperative insurance compliant with Islamic Shar’ia rulings.
7- Working on drafting acts and terms of standard documents of cooperative insurance and reinsurance to guide those who are dealing in cooperative insurance and reinsurance.
8- Calling for the development of laws and the executive regulations governing the practices of cooperative insurance, paying attention to the rules and standards of disclosure, internal censorship, and transparency, and participating in transferring risks and governance.
9- Working on setting guide models of accounting treatment of the cooperative reinsurance operations to guarantee their compliance with the Islamic Shar’ia rulings.
10- Preparing unified models to measure the financial solvency in the light of the agreements of cooperative insurance and updating the quantitative models periodically.
11- Keeping the appropriate financial solvency margin of the cooperative insurance companies due to the positive impact between the financial solvency and the cooperative reinsurance.
12- Studying the proposal of discounting the administration fees as a fixed percentage in the Takaful administration system on the basis of Wakala from the contributions actually received not the subscribed ones according to the principle of cash accounting, but not accrual accounting in order to avoid deficit in funds.
13- Making use of the indexes of performance, profits, and the quality of Islamic cooperative reinsurance and the index reflects the rates of retention and loss which makes the investors, creditors, and shareholders feel trust and confidence.
14- Forming a committee to follow up the recommendations of the fifth forum of the cooperative insurance and the previous forums and it shall include representatives of the participants in the forum like the International Federation of Takaful and Islamic Insurance Companies and the Islamic Development Bank.

Dr. Rabee Saad