Operational and Actuarial
Aspects of Takaful
 Claims Management
Sub Topics
 Importance of Good Claims Management
 Family Takaful
 General Takaful
 Third Party Claims Assistance
 Claims Disputes
Importance
 A claim can be defined as a ‘request for reimbursement
filed by the insured and addressed to the operator’
 Claim is the ultimate test of responsibility of the takaful
operator to compensate the economic loss of the
participant as promptly and fairly as possible
 Usually administered by the insurer’s claims department,
however it may also involve adjusters, and third party
administrators
Importance
 Need to be efficient and effective as it has marketing
repercussions. Good claim services contributes to good
image and better competitive position
 Claims processing differ according to:
a.
b.
c.
type of cover,
the amount of claim, and
whether it is a personal or commercial claim;
 Takaful operators have the right to safeguard its role as the
trustee of the takaful fund by ensuring that all claims are
genuine
Regulations
 General Takaful – JPIT3
 Family Takaful - No specific guideline but
embedded in prudential risk management
framework and product guidelines and circular
 Guidelines on claims settlement practices aim to:
improve claims processing,
b. fraud control and
c.
risk management measures.
a.
Claims Processing – In General
 General procedure for claim applicable to all
classes of family and general takaful plans :
 Check the policy or certificate
 Notify the takaful operator
 Provide complete and correct information
 Keep copies of all documents
 Communicate frequently
Family Takaful Claims
 Death claims:
 Proof of death
 Proof of age
 Proof of title and ownership
Family Takaful Claims
 Maturity claims
 To settle a maturity claim, a participant is usually required to provide the
following proof of claims:

If the participant is the insured
-
Proof of age
-
Proof of survival
-
The original policy certificate
-
Completed discharge voucher

If the participant is not the insured
- a deed of assignment
- a statement by the insured proving that he/she is alive and is unable or
not available to sign the survival certificate
Family Takaful Claims
 For endowment policies, operators would normally incorporate
common settlement options such as:
 Cash proceeds
 Conversion to annuity
 Leave maturity proceeds to the operator
 Personal Accident, Sickness or Disability Benefit Claims
 For the above stated claims, the participant must prove to the
satisfaction of the operator and comply with all other conditions of
the contract ; for personal accident policies the doctorine of
proximate cause is important;
Family Takaful Claims
 It is customery for operators to issue form so as to elicit
information about the accidents and validation of all the
documents given ; among the documents required for
personal accident claims includes :
 Medical leave chit
 Medical report
 Salary slip
 Photographs depicting injury sustained
General Takaful Claims
 The general procedures for claim applicable to all classes of general
takaful plan is as follows :

Notice of claim

Make a police report

Proof of loss

Investigation

Settlement of a claim
General Takaful Claims
 The general procedures for claim applicable to all classes of
general takaful plan is as follows :
 Notice of claim
 Make a police report
 Proof of loss
 Investigation
 Settlement of a claim
General Motor Takaful Claims
 Claims under motor takaful may arise under:
 Own Damage Claims




Partial Loss
Total Loss
Theft
Windscreen
 Lialbility to Third Party

Damage to property belonging to third party

Death and/ or bodily injury to third party
General Motor Takaful Claims
 Processing of claims for Partial/Total Loss
 Documents to be submitted are:

Claim form

Police report

Estimate of repairs

Copies of identification card and driving license

Copies of the registration card and road tax of the vehicle
General Motor Takaful Claims

Appointment of adjuster

Approval

Reinspection

Discharge

Payment
General Motor Takaful Claims
 Processing of Claims for windscreen
- claim form
- Copy of the participant’s identification card;
- Photographs of the damaged windscreen;
- The bill for replacement of the damaged windscreen
General Motor Takaful Claims
 Third Party
- operator liable only to indemnify against liability to third party ;
- liability to third party should be viewed strictly from the provision
of the law;
- offer for settlement made directly to claimant;
- proper discharge must be obtained from the claimant ;
- liability of the participant can only be determined by
- panel lawyers can be appointed if deemed necessary
the court ;
Loss Adjusters
 Investigates and evaluates damages independently
 Assess liability and quantum payable by the
takaful operator
 Communicating with participants, claimants,
beneficiaries, public authorities and others such as
witnesses.
 Negotiate with contractors on time and cost of
repairs for the purpose of making an offer of
settlement to the participant.
 Protect the interest of the takaful fund when
dealing with claimants
Claims Dispute
 When a dispute arises, it may be resolved through the
following channels :
 Negotiation – ex gratia
 Litigation
 Arbitration
 Mediation
 Financial Mediation Bureau