Rather than simply being insurance for Muslims, Takaful is a way of mutually protecting participants in line with shariah principles. In Malaysia Takaful operators have shareholders who provide guarantees through paying qard (interest free loans) if there is a deficit.
This effectively results in a transfer of risk and places Takaful under insurance rules and regulations. In India Takaful has been developed through a mutual health insurance scheme whereby there is no transfer of risk as a pure mutual structure is developed whereby participants are helping each other through sharing of risk. The scheme is called Uplift Mutuals Biradaree and has been ne-tuned for shariah compliance from an existing scheme, Uplift Mutuals, which has been around for over 15 years.
Part of the capital and operating expenditures are currently met by the International Cooperative and Mutual Insurance Federation (ICMIF). As part of its mutual microinsurance strategy ICMIF has partnered with Uplift India Association to deliver mutual assurance coverage to half a million people over the next ve years. Funding by ICMIF has come from two of its members, including the Cooperators of Canada who established the rst Takaful operations in Canada.
This scheme falls under the Indian Public Trusts / Societies Act which permits people to set up such members-only schemes.