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Wednesday Scientific Weekly Dialogue No. (2)
Sukuk Takaful (Insurance) Model Rationality
? Technical Know-How&
Prof. Mohd Ma’Sum Billah
Researcher, Islamic Economics Institute
King Abdulaziz University, Jeddah, Saudi Arabia
Wednesday 29-09-2021 (21-02-1443H)
Abstract
For a sustainable growth of the sukuk industry, among the prime concerns is to ensure a
confidence among investors by protecting them against any catastrophe and that is,
why sukuk is issued as a safeguard for investors and beneficiaries. The common
phenomena is that, in any sukuk structure, be one sovereign, corporate or social,
investors, and or beneficiaries in the structure are protected by sukuk itself against any
capital or beneficial risk or catastrophe. In reality, a legitimate question may be raised
whether a sukuk itself is adequate safeguard for the investor or beneficiary against any
defined risk? It is submitted that, a sukuk itself does not hold the capacity to offer
adequate protection for the investor or beneficiary against risk, because the issuer may
still have the legitimate right to escape the liability by a “limited liability clause” under
the Company law or the public policy. It may thus, be suggested that, the only way to
ensure an adequate safeguard for the investor or the beneficiary in a sukuk structure is
by a comprehensive insurance policy as an additional step to a sukuk certificate, may be
termed as “sukuk takaful”. In today’s Hewar, it seeks to share the emergence of sukuk
takaful besides analyzing its rationality and technical know-how?
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