Rules and regulations review on micro-takaful scheme development in Malaysia

Abstract

Purpose This study aims to review the current rules and regulations on micro-takaful in Malaysia to determine whether it addresses the basic principles of micro-takaful. Although the features of the first micro-takaful are slightly different from the customary long-established takaful settings, the rules and regulations remain unchanged following the original guidelines of operating insurance and takaful. Until Perlindungan Tenang makes its first premiere, the rules and regulations on micro-takaful are gaining ground. The dissimilarity of micro-takaful from the original takaful calls for updated guidelines, so that any micro-takaful scheme launched in the market meets the demand and needs of the targeted population. Design/methodology/approach This study uses content analysis as the best method to review each guideline in the related rules and regulations across several documents such as microinsurance and micro-takaful discussion paper and guidelines on family takaful products. Findings Overall, the findings reveal that guidelines on micro-takaful operating in Malaysia support the micro-takaful requirement to be affordable, valuable, accessible, understandable and simplified. Matching the rules and regulations with this population feedback, the extended distribution channel may need further scrutiny due to deficit trust among public members toward insurance and takaful. Originality/value The insights presented are of important illumination to achieve long-term sustainability financial protection while preserving human well-being among those underserved.