Retakaful 181
Table 12.1 Ownership of Major Retakaful Operators Retakaful operator
Incorporated Jurisdiction
Takaful Re
2005
Dubai
Hannover Retakaful
2005
Bahrain
MNRB Retakaful Berhad Munich Re Retakaful
2007
Malaysia
2007
Malaysia
Swiss Re Retakaful ACR Retakaful SEA
2008 2008
Malaysia Malaysia
ACR Retakaful Bahrain Best Re (L) Ltd.b
2008 2010
Bahrain Malaysia
Majority owner
Owner’s core trade
Arab Insurance Group, Reinsurance Bahrain Hannover Reinsurance, Reinsurance Germany MNRB Holdings Berhad Insurance, reinsurance Munich Reinsurance, Reinsurance Germany Swiss Reinsurance Reinsurance Khazanah Nasionala Sovereign wealth fund Best Re Holding Limited Insurance Best Re Holding Limited Insurance
a. Khazanah Nasional is not a reinsurance group, but its shareholdings in the two companies are significant. b. The company was originally incorporated in 1985 in Tunisia as BEST RE and relocated to Malaysia in 2010.
when their core activities are in contravention to the teachings of Islam. Examples of such activities are liquor and gaming. The second issue is that sharia advocacy has to be conspicuous and embedded in the operator’s corporate and sharia governance structure. Relevant organs and mechanisms have to be in place. The board of directors and the sharia advisory board (SAB) are the main organs, although some would prefer to expand the functions of relevant board committees to include oversight on sharia risk management and sharia audit. Many jurisdictions tend to focus only on fulfilling the requirement for an SAB. It is felt that the governance mechanisms should include a sharia secretariat to serve as a liaison between management and the SAB, a sharia compliance manual to guide daily operations, and a sharia officer to monitor compliance. Separation of funds between the shareholders’ fund of the operator and the retakaful risk fund helps to define ownership of these funds and to ensure that proper accounting treatment is accorded to transactions involving them. The secondary investment activity on both the shareholders and risk funds would be directed only toward shariaapproved instruments to ensure that the fund is healthy and in line with the tenets of Islamic finance. Retrotakaful protection is the third issue. The retrotakaful or retrocession protection program of an operator has to be in place for it to underwrite any business. Although most jurisdictions do not impose this requirement, it is prudent and expected of management. The retrotakaful