The Supervisory Authority for Insurance and Social Welfare (ACAPS) organized last Wednesday in Casablanca, a Master Class for journalists on the theme of “Takaful insurance” in Morocco.
The first part of this workshop was essentially devoted to the principles as well as the legal and regulatory framework of Takaful insurance and reinsurance.
According to Issam Achiki, head of the monitoring and standardization service within ACAPS, Takaful insurance and/or reinsurance operations and fund account management activity comply with Islamic Shariah (conformity affirmed by the Superior Council of Ulema-CSO).
He also emphasized in his presentation that Takaful insurance is based on essential legal principles, noting that the Insurance and Reinsurance Company (EART) and the Takaful Insurance Fund are two independent entities (the Fund has legal personality and financial autonomy) and that the management of the various accounts is carried out by the EART in return for management remuneration.
The Takaful insurance contract stipulates that the payment of the contribution is made on the basis of the donation commitment, except for the Takaful investment. The technical and financial surpluses of the account are distributed entirely among the participants.
As for the deficits of the fund’s accounts, they are filled by Takaful advances (without interest) in compliance with Sharaic obligations in terms of inheritance, donation or will when designating a beneficiary of Takaful family insurance contracts. , with the obligation to set up an internal audit structure responsible for drawing up a specific report on the compliance of the operations and activities of the EART with the assent of the CSO.
According to Issam Achiki, several characteristics distinguish Takaful insurance from conventional insurance.
First, in Takaful insurance, policyholders called “participants” share the risk among themselves.
Secondly, the concept of “premiums” of conventional insurance is replaced by that of “contributions” made by the participants in the form of a pledge of donation with regard to contracts whose purpose is to cover risks.
Thirdly, the EART manages the fund in its capacity as salaried representative and fulfills its missions in compliance with the legislative and regulatory texts in force and in accordance with the management system.
Fourth, the risks are borne by the community of participants within the limits of their contributions to the Takaful insurance accounts.
Fifth, surpluses are distributed among participants in accordance with the Takaful Insurance Fund management regulations.
And finally, the insurance company undertakes, within the framework of management operations, to carry out all actions (investments, underwriting, reinsurance, etc.), in accordance with the assent of the CSO.
It should be noted that there are several forms of contracts that manage the relationship between participants and the Takaful operator. The most used contracts are the mudaraba contract (profit-sharing) and the wakala contract (mandate) as well as the wakala and mudaraba contract (the wakala contract adopted for subscription, and the mudaraba contract for Takaful Fund investments). This approach seems to be favored by some international organizations. In all models, the Takaful operator will generally provide an interest-free loan to cover any default in the Takaful Fund. The loan is repaid using future surpluses from the Takaful Fund.
For his part, Mohamed Feriss, head of the insurance product monitoring service at ACAPS, highlighted that approvals were granted in 2022 to 4 Takaful insurance companies and to a reinsurance company.
He also pointed out that ACAPS has developed seven reference models of the general conditions and specific conditions relating to death / disability contracts for crowdfunding, death / disability all causes, death, multi-risk building for crowdfunding , multi-risk building, Takaful investment, Takaful-retirement investment.
ACAPS has also developed a reference model of the general rules on redemption and advance (RGAR) which must be annexed to the Takaful investment and Takaful-retirement investment contracts.
Mohamed Feriss affirmed that these contracts and RGARs are drawn up according to the reference models that are the subject of the assent of the CSO by integrating certain modifications specific to each of the insurance companies, while emphasizing the control exercised by the ACAPS on these contracts and RGARs.
Remember that this Master Class was led by Siham Ramli, director of communication and international relations at ACAPS.
It should also be noted that ACAPS, created by Law No. 64-12 which entered into force on April 14, 2016, is responsible for supervising insurance and reinsurance companies and the distribution network as well as social welfare. It ensures the protection of policyholders, affiliates, members and beneficiaries of rights.
In this sense, ACAPS monitors the solvency of insurance and reinsurance companies and the financial sustainability of social welfare schemes; compliance with the rules applicable to each sector by the operators subject to its control, and the monitoring of commercial practices and the investigation of all complaints relating to the operations carried out by the entities subject to its control.