Takyīf Fiqhī of Takāful Contract from Shariah Perspective: A Comparison between AAOIFI, IIFA and the Malaysian Shariah Resolutions and Practices

Abstract

The juridical adaptation (takyīf fiqhī) of the takāful contract remains a subject of intense scholarly debate within Islamic finance, reflecting divergent methodological approaches to reconciling modern financial products with classical jurisprudence. This paper provides a comparative analysis of the takyīf fiqhī of takāful from the perspectives of three major standard-setting bodies: the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the International Islamic Fiqh Academy (IIFA, or Majma’ al-Fiqh al-Islāmī), and the resolutions and practices prevalent in Malaysia. The study begins by tracing the linguistic roots and conceptual evolution of takāful, distinguishing it from its conventional insurance counterpart and pre-modern risk-sharing practices like ‘āqilah and tanāḥud. The core of the analysis critically examines the distinct contractual frameworks employed by each authority. AAOIFI’s Standard No. 26 conceptualizes takāful through a tripartite structure, anchoring the participant's relationship in a binding donation commitment (iltizām bi-tabarru’). In contrast, the Malaysian model operationalizes this through a hybrid tabarru’-hibah system, which, while commercially effective, introduces juristic ambiguities concerning ownership and reciprocal benefit. The IIFA, however, champions a paradigm rooted in the Qur’anic principle of mutual cooperation (taʿāwun), framing takāful as a novel cooperative covenant (‘aqd taʿāwunī) governed by mutual forbearance (musāmāḥah). This paper employs tarjīḥ (juristic preference) to evaluate these competing models, arguing that the IIFA's taʿāwun-based framework, validated by the Prophetic precedent of tanāḥud, offers a theologically and jurisprudentially more coherent foundation. It effectively resolves the ontological tensions inherent in the tabarru’ and hibah models regarding ownership of the fund, the permissibility of unequal benefits, and the inherent gharar in risk-sharing, thereby affirming takāful’s authentic nature as a manifestation of divinely ordained mutual responsibility.