Takaful 135
Figure 2.Wakalamodel
Hybrid model
This is a mix between thewakalaandmudarabamodel, and is widely used
in the Middle East countries (excluding Saudi Arabia). In this model,
shareholders are paid:
- A pre-agreed proportion of the contributions paid by the policyholders in
return for running the insurance operations of thetakafulbusiness−that
iswakalamodel for the contributions; and
- A pre-agreed proportion of any investment income from investing the
policyholders’ funds assets−that ismudarabamodel for the investments.
Waqf model
There was considerable debate within Pakistan amongst Islamic Scholars
as to whether “contributions” were really charitable donations. In response
to this, the Shari’a scholars in Pakistan developed a model calledwakala-
waqfmodel (known as thewaqfmodel).
In thewaqfmodel, policyholders’ funds are replaced with a charitable
trust fund−awaqffund. Under the waqfmodel, part of the capital of the
