Based on this principle, participants remain the actual owners of the takaful fund and the takaful operator acts as an agent (for the participants) who manages the fund for a defined fee. As an agent, the operator is entitled to agency fee (remuneration) and performance fee (as commission). The surplus of the participants’ investment funds goes to the participants. The agency fee rate is fixed annually in advance in consultation with the Shari’ah committee of the company. Performance fee, which is related to the level of performance, is given as an incentive for good administration and governance of the participants’ fund. For further details see: ISRA, Islamic Financial System; Principles and Operations.

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