Takaful operators : analysing segregated accounts between operator/participants

Purpose: The purpose of this paper is to provide an analysis on whether takaful operators actually maintain separated and segregated accounts between the operator and participants’ funds, thereby conforming to Shariah compliance requirements or not. Design/methodology/approach: The research uses a qualitative methodology by analysing secondary data relating to two takaful operators in each of the jurisdictions of the Kingdoms of Bahrain and Saudi Arabia. Findings: The findings generally reveal that the financial statements and Shariah Supervisory Board annual reports of the takaful operators in the Kingdom of Bahrain confirm the Shariah-required maintenance of separate accounts between the operator and participants, as well as reveal transparency-related issues and Shariah governance weaknesses for takaful operators in the Kingdom of Saudi Arabia. Research limitations/implications: Generalizing based on a single case study may affect the accuracy of the findings. It may also be argued that qualitative researches are generally considered as less valid than quantitative researches. Originality/value: This research may have provided empirical data that did not previously exist in the literature.