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FCB Takaful

FCB Takaful Insurance Brokers Ltd, a wholly owned subsidiary of First Community Bank Ltd operates the first Sharia'h Compliant Islamic Insurance Scheme (Takaful) in East and Central Africa. FCB Takaful is registered and licensed by the Insurance Regulatory Authority (IRA) of Kenya as a Corporate Broker. The Takaful scheme has been approved by FCB’s reputable Sharia'h Supervisory Board.
Takaful literally means ‘guaranteeing each other’ in Arabic. It is founded on the principles of donation and mutual cooperation (‘Tabaru’a and Ta’awun’). Takaful Insurance program can be described as a self–catering scheme for providing financial aid to participating members in need, based on brotherhood and solidarity. Basically, Takaful is a scheme that seeks to create a pool of funds from mutual co-operation by participants with the purpose of providing financial aid to any of the participants who may suffer a loss.
As with the mutual insurance, the participants (policy holders) share in the profits of the Takaful business. Consequently if at the end of the financial year, the scheme makes a surplus, this is shared between the Takaful scheme policyholders as a bonus or participation discount when renewing their polices. If the fund makes a loss, this deficit is funded by an interest-free soft loan from the shareholders’ fund. The shareholders’ fund is then repaid from any future surpluses from the policyholder’s fund.

FCB Takaful Scheme is operated on strict Islamic Finance Principles that prohibit investments in interest bearing financial instruments; and prohibited (haram) activities such as gambling, alcohol, drugs, casinos, brothels, armaments etc.

Different Types of Takaful

Motor Vehicle Takaful

This type of Takaful encompasses both private and commercial vehicles. It covers your vehicle against;
  • Loss or damage arising out of an accident to third party.
  • Fire, external explosion, self ignition, lightning or frost.
  • Theft.
  • Accidental damage.
  • Damage from natural calamities.
There are 3 types of cover under our Motor Vehicle Takaful Plan: 

a. Comprehensive

Comprehensive Takaful policy covers you and your vehicle as follows:
  • Accidental own damage-partial or total loss (up to market value or sum assured whichever is less)
  • Theft damage or loss
  • Fire damage or loss
  • Windscreen and window glass (up to Kshs. 20,000)
  • Radio Cassette, CD changer etc (up to Kshs. 20,000)
  • Medical expenses ( up to Kshs. 30,000)
  • Towing cost (up to Kshs. 30,000)
  • Third party injury – unlimited
  • Third party property damage ( up to Kshs. 10,000,000)
  • Legal expenses – as consented

b. Third Party, theft and fire

This type of Takaful covers damages against another party or if the vehicle is damaged as a direct result of fire, explosion, lightening, attempted theft, or if stolen.
Benefits and limits
  • Theft damage or loss
  • Fire damage or loss
  • Windscreen & window glass (up to Kshs.20,000)
  • Radio Cassette, CD changer etc (up to Kshs.20,000)
  • Medical Expenses (up to Kshs.30,000,000)
  • Towing cost (up to Kshs.30,000)
  • Third party injury –unlimited
  • Third party property damage (up to Kshs.10,000,000)
  • Legal expenses – as consented

c. Third Party Only

This will only cover the other party and their property due to damages caused by you. This will not cover damages or a loss to your vehicle.
Benefits and limits
  • Third Party Injury – unlimited
  • Third Party Property (Up to Kshs.10,000)
  • Legal expenses – as consented
  • Homeowner’s Comprehensive Takaful

This is a comprehensive policy specifically designed to cater for the insurance needs of private home owners. It provides cover for the home owner and the family members who permanently reside in the covered property. A Household Policy covers not just your home but also your domestic and electronic appliances. The policy basically covers the following;

a. Building

Building including fixtures and fittings, interior decorations, walls, gate and fences are insured under this section. The insured will be indemnified against damage to the property insured caused by specified perils such as:
  • Fire, lightening, thunderbolt, earthquake or volcanic eruption subterranean fire.
  • Explosion
  • Riot and strike
  • Aircraft or other aerial device
  • Bursting or overflowing of a water tank
  • Theft
  • Impact with building by any road vehicle / animal not belonging to the insured or any member of his family normally residing with him
  • Storm or tempest (Excluding damages caused by building under construction, reconstructions or repair)
In addition – Any expense of alternative accommodation and loss of rent (not exceeding 10% of sum assured) in the event of the building is rendered uninhabitable by the above perils.

b. Content

Cover under this section covers loss or damage to items of your home, such as furniture, household goods, kitchen equipment and other appliances, television and radio sets , and other similar equipment , clothing, personal effects and valuables.
The insured will be indemnified against damage to the property insured caused by specified perils such as;
  • Fire, lightening, thunderbolt, earthquake or volcanic eruption or subterranean fire
  • Explosion
  • Riot and strike
  • Aircraft or other aerial device
  • Bursting or overflowing of a water tank
  • Theft
  • Impact with building by any road vehicle / animal not belonging to the insured or any member of his family
  • Storm or tempest
In addition – Any expense or alternative accommodation and loss of rent (not exceeding 10% of total sum assured) in the event of the building being rendered uninhabitable by the mentioned perils.

c. All Risk

All risk Takaful includes cover for all your personal portable possessions that you carry on you and move outside your home. Portable possessions can be general all risk items that are either worn or designed to be carried by you personally, in a handbag, car or sports bag or you can specify specific risk items you would like to cover. Portable possessions include: jewellery, watches, photographic equipment, clothing, sporting equipment etc.

d. Workmen’s Compensation

In the event of any domestic servant who is covered sustains an injury or disease arising out of and in the course of their employment by the insured, the Takaful covers liability under Workmen’s compensation legislation in force in Kenya, Tanzania and Uganda or at common law respect to domestic servants employed at your home.

e. Owners Liability

The insured shall be indemnified against legal liabilities arising from accidental bodily injuries to other persons other than member of the insured family and / or accidental loss or damage to property not belonging to or in custody or control of the insured or a member of his family.

f. Occupier’s and Personal Liability
Personal Liability Takaful is designed to indemnify the insured against all sums that the insured shall become legally liable to pay as damages arising from and in connection with accidental bodily injuries (including illnesses other than members of his family or accidental loss damage to property not belonging to the insured or members of his family). You have the option of choosing this cover by becoming a member in the Takaful fund.
Differences between Takaful and Conventional Insurance
Takaful differs from conventional insurance in various aspects as elucidated in the table below:
Conventional InsuranceTakaful Operations Main motive is to maximize returns to shareholders.
Main motive is community well-being optimizing operations for affordable risk protection as well as fair profits for the operator.

Profits and/or Bonus units to be returned to policyholders as determined by mangers and Board of insurer.

Takaful contract specifies in advance how and when profit/surplus and/or Bonus units will be distributed.

Initial capital supplied by shareholders.

Initial capital supplied by Rab al Mal (Agent) or paid in via premiums from participants.

Separation of policyholder and insurer with differing interests.

Coincidence of interests between policyholder and operator as appointed by participants.

Transfer of losses among insurance pools and from policyholders to shareholders.

Losses retained within classes of business written and sole obligation of Participants.

Right of insurable interest is vested in the Nominee absolutely in Life Insurance.

Right of insurable interest is determined by Islamic Principles of Faraid (inheritance).

Insured may elect cost or replacement cost valuation and claim accordingly whether or not they choose to rebuild property.

Insured may not ‘profit’ from insurance and entitled to compensation only for repair or rebuild or replacement.

Investment of premiums conducted by insurer with no involvement by policyholders.

Takaful contract specified under principles of al Mudharabah how premiums will be invested and how results are shared.

Insurer invests premiums consistent with profit-motive with no moral guidelines; hence co-existence of Al Riba and Al Maisir.

Takaful invests premiums in accordance with Islamic values and Shariah guidelines.

Dissolution – reserves and excess/surplus belong to the shareholders.

Dissolution – reserves and excess /surplus could be returned to Participants.

Taxes subject to local, state and federal taxes.

Taxes – subject to local, state and federal taxes (if any) plus required to arrange annual (Zakat) donations to charity.

Benefits paid from general insurance account owned by insurer.

Benefits paid from contributions (Al tabarru) made by participants as mutual indemnification.

Accounting consistent with IAS.

Accounting consistent with IAS plus conformance with Islamic rules on the basis of Sharia Advisory oversight.
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