Launch of Ceylinco Takaful Insurance

by Lalin Fernandopulle

The Ceylinco Group launched the Ceylinco Takaful Insurance with an insurance scheme in keeping with the Islamic Shariah Law at the Ceylinco Seylan Towers on Wednesday.

Deputy Chairman Ceylinco Takaful, Sunil Jayatissa said Ceylinco Takaful is a new entrant to the insurance business in Sri Lanka. It is a system of insurance acceptable to the Muslims since it is in conformity with the Shariah Law.

Ceylinco Group Chairman Dr. Lalith Kotelawala saw the need to assist the Islamic community since financial services offered were not in accordance with the Islamic Shariah.

To rectify the un-Islamic aspects of conventional insurance, Dr. Kotelawala with Islamic scholars launched the Ceylinco Takaful Insurance based on Islamic contractual law.

Takaful is an Arabic word meaning guaranteeing each other. It means that the persons who participate in Takaful insurance jointly guarantee among themselves to compensate against loss or damage that any of them may suffer, Jayatissa said.

Vice President Ceylinco Takaful Insurance, Ash Shaikh Niyas Mohamed Moulavi said Takaful Insurance originated in Sudan in the 1970s and spread across the Arabic region as an acceptable insurance system for the Islamic community.

Muslims avoid insuring their properties or liabilities because conventional law contravenes the Islamic Law. Takaful is an insurance system that is in compliance with Islamic Shriah Law because it is based on principles of mutuality and co-operation, he said.

Conventional insurance systems are more favourable to insurance companies than to the policyholder.

The insurance company collects a large sum through premia from people and uses it to compensate the few unfortunate.

The total premia collected exceeds the full compensation paid with the operating expenses. The surplus is retained as profits for the company. In Takaful insurance the surplus belongs to the policyholders.