Jurisdiction of Sharia Supervisory Board in Indonesian Takaful Industry

Abstract

The first takaful company in Indonesia is PT. Takaful Indonesia Company which started in 1994. Based on data from the Indonesian Financial Services Authority, there are currently 55 takaful companies in Indonesia. The act that governing takaful is contained in the Act of the Republic of Indonesia Number 40 Year 2014 about insurance. Takaful is also regulated in other regulations such as in the Capital Market Supervisory Regulation, Regulation of the Minister of Finance and Fatwa of the Indonesian Ulama Council. Although the takaful industry started in 1994, there are still many problems with takaful operations in Indonesia. Among the obvious is that there is no specific takaful law, the jurisdiction of the Shari’a Supervisory Board which needs to be improved in terms of its jurisdiction and the independence of Sharia Supervisory Board as the party overseeing the compliance of sharia principles in the takaful industry. The objective of the study is generally to study the regulation of the implementation of syariah compliance requirements in takaful companies. Qualitative research methods are used to analyze library data relating to syariah compliance at takaful companies and to conduct interviews with related parties. Based on that, the study found that takaful regulation in Indonesia has not been detailed in regulating the jurisdiction of the Shariah Supervisory Board as a supervisor of shariah principles in takaful companies. Therefore, this study proposes regulatory improvements that can support compliance with syariah requirements.