Operational and Actuarial Aspects of Takaful

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Operational and Actuarial Aspects of Takaful

• Claims Management

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Sub Topics

• Importance of Good Claims Management
• Family Takaful
• General Takaful
• Third Party Claims Assistance
• Claims Disputes

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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 insurers claims
  department, however it may also involve
  adjusters, and third party administrators

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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
• 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

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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,
• fraud control and
• risk management measures.

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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

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Family Takaful Claims

• Death claims
• Proof of death
• Proof of age
• Proof of title and ownership

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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

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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

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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

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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

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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

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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

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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

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General Motor Takaful Claims

• Appointment of adjuster
• Approval
• Reinspection
• Discharge
• Payment

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General Motor Takaful Claims

• Processing of Claims for windscreen
• claim form
• Copy of the participants identification card
• Photographs of the damaged windscreen
• The bill for replacement of the damaged windscreen

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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 the court
• - panel lawyers can be appointed if deemed
  necessary

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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

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Claims Dispute

• When a dispute arises, it may be resolved through
  the following channels
• Negotiation ex gratia
• Litigation
• Arbitration
• Mediation
• Financial Mediation Bureau

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The End