Takaful Act 1984
Takaful Act 1984
Takaful Act 1984
Act 312
Date of publication in
LAWS OF MALAYSIA
ACT 312
TAKAFUL ACT 1984
________
ARRANGEMENT OF SECTIONS
________
PART I
PRELIMINARY
Section
1. Short title.
2. Interpretation.
3. Classification of takaful business. and construction of references to matters
connected with takaful.
PART II
CONDUCT OF TAKAFUL BUSINESS
General restriction on takaful operators
4 ACT 312
Section
16. Establishment and maintenance of takaful funds, and allocation of surplus.
17. Requirements as to assets of takaful funds.
18. Restrictions on payment of dividends and grant of advance, loan, credit facility,
and financing facility.
21. Establishment and maintenance of takaful guarantee scheme funds and payments
of moneys out of the funds.
23. Re-takaful.
5 ACT 312
Section
32. Duty to notify change of managing director, director, chief executive or principal
officer.
PART III
6 TAKAFUL
Section
44. Additional provisions as to returns under sections 41 and 42.
45. Returns of changes in registration particulars.
46. Investigation of affairs of takaful operator.
47. Powers of Director General to issue directions.
48. General provisions as to winding up.
49. Special provision for takaful operators directed to cease takaful business.
50. Co-operative societies doing takaful business.
51. Schemes for transfer of business.
52. Confirmation of schemes.
53. Documents to be filed when scheme confirmed.
PART IV
MISCELLANEOUS AND GENERAL
7
Section
65. Payment of familv solidarity claim without probate, etc.
66. Knowledge of and statement by authorized agent to be deemed knowledge and
statement by operator.
An Act to provide for the regulation of takaful business in Malaysia and for other
purposes relating to or connected with takaful.
[ ]
BE IT ENACTED by the Duli Yang Maha Mulia Seri Paduka Baginda Yang
di-Pertuan Agong with the advice and consent of the Dewan Negara and Dewan
Rakyat in Parliament assembled, and by the authority of the same, as follows:
PART I
PRELIMINARY
Short title. 1. This Act may be cited as the Takaful Act 1984.
“accounting period", in relation to any takaful operator, means the period for
which the operator makes up the accounts of the takaful business carried on by
him in Malaysia;
9 ACT 312
Act287. "Co-operative Societies Act" means the Co-operative Societies Act 1948,
Sabah 3/58. or the Co-operative Societies Ordinance 1958 of Sabah, or the Co-operative
Sarawak Societies Ordinance of Sarawak, as the case may require;
Cap. 66.
"Director General" means the Director General of Takaful appointed under
section 54;
"family solidarity" means takaful for the benefit of the individual and his
family;
“participant" includes, where a certificate has been assigned, the assignee for
the time being and, where they are entitled as against the takaful operator to the
benefit of the certificate, the personal representatives of a deceased participant;
10 TAKAFUL
(a) any reference - to the last statutory balance-sheet or to the last statutory
valuation shall be construed as reference to that last prepared or made
and not superseded by the arrival of the data as at which another is to
be prepared or made; and
11 ACT 312
takaful operator"; "takaful agent" and "takaful broker" means a person who
carries on takaful business as takaful operator, takaful agent and takaful broker
respectively.
13/66 (d) no society registered under the Societies Act 1966 shall be
deemed to be a takaful operator, and no agent for such a society
shall as such be deemed to be a takaful agent nor shall references
in this Act to a certificate or contract of takaful apply to any
certificate or contract whereby a takaful is effected with such a
society.
[Pt. I.n, S. 4]
12 TAKAFUL
PART II
CONDUCT OF TAKAFUL BUSINESS
General restriction on takaful operators
Requirements 4. (1) Subject to this Act, takaful business shall not be carried on in
for carrying Malaysia by any person as takaful operator except -
business as (a) by a company as defined in the Companies Act 1965; or
takaful
operator. (b) by a society registered under the Co-operative Societies Act.
Act 125.
(2) No such company or society shall carry on family solidarity business
or both in Malaysia as takaful operator unless -
(c) it has the deposit required by this Act in respect of it: and
(3) For the purposes of subsection (2)(b), the surplus of assets shall be in
the form of cash or securities specified in the First Schedule, or any combination
thereof.
(4) For the purposes of this section, the value of takaful assets and
liabilities may be determined on a basis to be prescribed from time to time.
(5) A person who contravenes this section shall be guilty of an offence and
shall, on conviction, be liable to a fine not exceeding eighty thousand ringgit,
increased by sixteen thousand ringgit for each day on which he is proved to have
done so, or to imprisonment for a term not exceeding twelve months or to both.
Pt. I.n, S. 4]
13 ACT 312
Holding out 5. Where any person holds himself out to be a registered takaful operator in
as a respect of family solidarity business or general business or both where he is not
registered registered under this Act in respect of that business, that person shall be guilty of
takaful an offence and shall, on conviction, be liable to a fine of twenty thousand ringgit
operator. or to imprisonment for a term of twelve months or to both, and to a daily fine of
not exceeding four thousand ringgit.
Use of word 6. (1) No person other than an operator registered under this Act shall,
“takaful” without the written consent of the Director General, use the word "takaful" or any
of its derivatives in any language, or any other word indicating that such person
carries on takaful business in the name, description or title under which it carries
on business in Malaysia or make any representation to such effect in any bill head,
letter paper, notice or advertisement or in any other manner:
Provided that nothing in this section shall prohibit a takaful association from
using the word "takaful" or any of its derivatives in any language as part of its
name or description of its activities.
(2) Any person who contravenes the provision of subsection (1) shall be guilty
of an offence and shall, on conviction, be liable to a fine of four thousand ringgit
or to imprisonment for a term of six months or to both and to a daily fine of not
exceeding four hundred ringgit.
Examination 7. (1) Where the Director General has reason to suspect or believe that a
of persons person is carrying on takaful business without having been registered under this
of carrying Act, he may call for or inspect the books, accounts and records of that person in
on takaful order to ascertain whether or not that person has contravened or is contravening
business. any provisions of this Act.
(2) Any person who wilfully refuses to submit the books, accounts and
records or to allow the inspection thereof shall be guilty of an offence and shall,
on conviction, be liable to a fine of twenty thousand ringgit or to imprisonment
for a term of twelve months or to both and to a daily fine of not exceeding four
thousand ringgit.
Pt. I.n, S. 8]
14 TAKAFUL
Registration 8. (1) The Director General shall be responsible for the registration of
of takaful takaful operators and, subject to this section, shall on the application of any
operators company or society qualified under subsection (1) of section 4 register with
by Director or without conditions and on payment of the prescribed fees, the applicant
General. in respect of family solidarity business or general business or both.
(4) The Director General shall refuse to register an applicant if, after
appropriate inquiry, he is satisfied that the name of the applicant is not by its
resemblance to the name of any other body likely to deceive.
(5) The Director General shall also refuse to register an applicant unless he
is satisfied -
(a) that the aims and operations of the takaful business which it is
desired to carry on will not involve any element which is not
approved by the Syariah; and
(6) Where the Director General is satisfied that an applicant has complied
with all the requirements of this section he shall refer the application to the
Minister; and if the Minister so directs, the Director General shall not register the
applicant who shall be notified of the direction.
Pt. I.n, S. 8-11]
15 ACT 312
(8) The Director General shall cause notice of any registration of a takaful
business to be published in the Gazette.
Annual 9. (1) Every operator shall pay such annual registration fees as the Minister
registration may prescribe.
fees.
(2) The Minister may prescribe different registration fees for different
classes of takaful business.
Conditions 10. (1) The Director General may from time to time and as he thinks fit –
of registration (a) impose conditions of registration on an operator; or
(b) add to, vary, or revoke any existing conditions of registration of an
operator,
who is already registered under this Act in order for it to remain so registered.
(2) Any operator who fails to comply with any of the conditions imposed
by the Director General under subsection (1) shall be guilty of an offence and
shall, on conviction, be liable to a fine of twenty thousand ringgit and to a daily
fine of four thousand ringgit
Cancellation 11. (1) The Director General may by order cancel the registration of an
of registration operator either wholly or in respect of a class of business, as the case may be, if he
is satisfied that –
(b) the operator has not commenced business within twelve months after
being registered;
(c) the operator has ceased to carry on takaful business in respect of any
class of business;
(d) the operator has failed to maintain a surplus of assets over liabilities in
accordance with subsection (2) (b) of section 4;
[Pt. H, S. 11]
15 TAKAFUL
(k) the operator has been convicted of any offence under this Act or
any of its officers holding a managerial or an executive position
has been convicted of any offence under this Act;
(2) The Director General shall before cancelling any registration under
subsection (1) cause to be given to the operator concerned notice in writing of
his intention to do so, specifying a date, not less than fourteen days after the date
of the notice, upon which the cancellation will take effect and calling upon the
operator to show cause to the Director General why the registration should not
be cancelled.
(3) Notwithstanding the fact that the registration of an operator has been
cancelled under this section, so long as the operator remains under any liability
in respect of Malaysian certificates belonging to the class of takaful business to
[Pt. II, S. 13-14]
16 ACT 312
which the registration relates, the operator shall take such action as it considers
necessary or as may be required by the Director General to satisfy him that
reasonable provision has been or will be made for that liability and that adequate
arrangements exist or will exist for payment in Malaysia of contributions and
claims on those certificates.
(5) Any operator whose registration has been cancelled pursuant to this
section may within sixty days of being notified in writing of the cancellation
appeal against the order of cancellation to the Minister whose decision thereon
shall be final.
Effects of 12. (1) Where an order of cancellation becomes effective under section 11-
cancellation
of registration. (a) notice of the cancellation shall be published in the Gazette; and
(b) the operator shall, as from the date of cancellation, cease to carry on
in Malaysia takaful business of the class in respect of which its
registration has been cancelled under this Act, otherwise than by the
collection or receipt of contributions on Malaysian certificates
belonging to that class effected before the date of cancellation of
registration and subsection (2) of section 4 shall not apply to the
operator in respect of the collection or receipt of those
contributions.
(2) The provisions of subsection (1) (a) shall not prejudice the
enforcement by any participant or person of and right or claim againts the
operator or by the operator of any right or claim against any participant or
person.
[Pt. IT, S. 13]
17 TAKAFUL
Deposits. 13. (1) An operator, while registered in respect of any class of takaful
business, shall at all times have in respect of that business a deposit with the
Accountant General of a value of not less than the amount as may be prescribed
by the Minister.
(2) Any such deposit shall be made in cash or securities specified in the
First Schedule or partly in one way and partly in the other; and any cash
comprised in a deposit may be invested in such manner not contrary to the
Syariah as may be approved by the Director General.
(4) A deposit made under this section in respect of any class of takaful
business shall be retained by the Accountant General until either the operator
ceases to be registered in respect of that class of takaful business or the deposit is
required in the winding up of the operator, and if the operator ceases to be
registered as aforesaid, the deposit or part of it may be further retained for the
purpose of and in accordance with any such provision for liabilities in respect of
certificates as is required by subsection (3) of section 11.
(5) If at any time a deposit under this section (other than a deposit
retained after the operator has ceased to be registered as aforesaid) comprises
assets other than Government securities, and the value of those assets is less than
the sum prescribed by virtue of subsection (1) reduced by the value of any
Government securities comprised in the deposit, then the Director General may
by notice in writing direct the operator to add thereto within twenty-eight days of
the service of the notice, cash or securities. specified in the First Schedule of a
value not less than the difference.
(6) An operator which has made a deposit under this section may at any
time substitute for any assets comprised in the deposit cash or securities
specified in the First Schedule, so long as the value of the deposit is not thereby
reduced to an amount below that which is required by this Act.
18 ACT 312
Bank 14. (1) If in the case of any operator, a bank licensed under the Islamic
convenants Banking Act 1983, makes with the Government an agreement in a form
in lieu of approved by the Director General, whereby the bank covenants with the
deposits, Government to deposit with the Accountant General a specified sum in cash on
Act 276. account of the operator's deposit under this Act in respect of either class of
takaful business, and the covenant complies with any requirements the Director
General sees fit to impose as to the circumstances in which that sum is to be
deposited, then for the purposes of this Act the operator shall be treated as
having deposited under section 13 a sum of cash equal to that so covenanted for
and the sum so covenanted for shall be recoverable notwithstanding that no
consideration is furnished on the agreement.
19 TAKAFUL
Register 15. (1) Every operator registered under this Act shall establish a register of
of takaful takaful certificates in such form certificates as may be prescribed and shall, other
certificates than any prescribed exceptions, keep the Register at its principal place of
business in Malaysia.
(2) Subject to this section, there shall be entered in the Register all
Malaysian certificates of the operator, and no certificate entered in the Register
shall be removed from it so long as the operator is under any liability in respect
of the certificate.
(5) Subject to subsection (4), the Register shall, notwithstanding that the
operator at any time ceases to carry on in Malaysia either class of takaful
business, continue to be maintained by the operator for certificates belonging to
that class so long as the operator is under any liability in respect of such
certificates registered or required to be registered at that time.
Establishment 16. (1) Every operator registered under this Act shall establish and maintain
and in accordance with this section a takaful fund in respect of the class or each of
maintenance the classes of takaful business carried on by the operator in Malaysia so far as
of takaful that business relates to Malaysian certificates.
funds, and
allocation
of surplus (2) There shall be paid into a takaful fund all receipts of the operator
properly attributable to the business to which the fund relates (including the
income of the fund), and the assets comprised in the fund shall be applicable
only to meet such part of the operator's liabilities and expenses as is properly so
attributable.
20 Act 312
Requirements 17. (1) The assets of any takaful fund under this Act shall be kept separate
as to assets from all other assets of the operator, and shall not include assets comprised in a
of takaful deposit under this Act, nor any amounts on account of goodwill, the benefit of
fund. development expenditure or similar items not realizable apart from the business
or part of the business of the operator.
(2) Subject to section 24 the assets of any takaful fund shall be such that-
(3) For the purposes of subsection (2) there may be added to the value of
items specified in the First Schedule the amount or value of any assets of the
fund of the following descriptions:
21 TAKAFUL
(4) The Minister may, in respect of assets of any takaful fund, require an
operator-
(5) For the purposes of this section the assets from time to time
representing any re-takaful operator's deposit held by the takaful operator to
meet liabilities of a takaful fund shall be treated with the agreement of the re-
takaful operator as assets of the fund.
22 ACT 312
(iii) to a company in which any of its directors owns twenty per cent
of the voting shares or more;
(iv) to a company in which the operator owns twenty per cent of the
voting shares or more;
(v) to a company which owns twenty per cent of the voting shares
of the operator or more; and
(vi) to a company in which a company mentioned in subparagraph
(v) owns twenty per cent of the voting shares or more;
(f) except with the approval of the Director General, pledge, mortgage or
charge any of its assets or securities.
(2) All the directors of the operator shall be liable jointly and severally to
indemnify the operator against any loss arising from the making of an unsecured
advance, unsecured loan, unsecured credit facility, or unsecured financing
facility.
(4) For the purposes of this section and section 19, 4 4 unsecured advance",
"unsecured loan", unsecured credit facility", or "unsecured financing facility"
means respectively-
23 TAKAFUL
(5) Nothing shall preclude the operator from investing its fund in any
manner allowed by the Syariah.
Disclosure 19. (1) Every director of an operator who in any manner whatsoever has an
of interest interest, whether directly or indirectly, in an advance, a loan, a credit facility, or
by directors. a financing facility from that operator shall as soon as practicable make to the
operator a declaration in writing as to the nature and extent of his interest and
the operator shall within seven days of its receipt furnish copies of that
declaration to the Director General, its auditor, and all its directors.
(2) For the purposes of subsection (1), a general notice given to the board
of directors of an operator by a director to the effect that he has an interest in a
specified enterprise, undertaking, firm or company and that he is to be regarded
as having an interest in an advance, a loan, a credit facility, or a financing facility
which may, after the date of the notice, be granted to that enterprise,
undertaking, firm or company shall be deemed to be sufficient declaration of
interest in relation to an advance, a loan, a credit facility, or a financing facility
so granted if-
24 ACT 312
(4) The declaration referred to in subsection (3) shall be made at the first
meeting of the directors held-
(b) (if already a director) after the person commenced to hold office
or to possess the property whereby the conflict may arise.
(5) The secretary to the board of directors of the operator shall cause to
be brought up and read any declaration made or notice given under this section
at the next meeting of the directors after the declaration is made or the notice is
given and he shall record the same in the minutes of that meeting.
Requirements 20. (1) Where an operator has established a takaful fund under this Act, the
as to documents operator shall secure that any documents evidencing the operator's title to assets
evidencing of the fund or assets falling within subsection (5) of section 17, so long as the
title to assets documents are held by or on behalf of the operator, shall be kept in Malaysia or,
of takaful. if not so kept, shall be kept in the custody of a person approved by the Director
General, and at a place and on terms so approved:
Provided that the Director General may, in the case of an operator being
investigated under this Act or where the Director General is satisfied that the
affairs of an operator are being conducted in a manner likely to be detrimental to
the interest of participants, or potential participants, direct that all such
documents be handed over to be kept by him or by a person approved by him
and at a place and on terms so approved.
[Pt. II, S. 20-21]
25 TAKAFUL
(2) An operator who has established a takaful fund shall from time to
time notify the Director General in writing the person having custody of any
such document on behalf of the operator.
(4) Any such document which is for the time being held by or on behalf
of the operator shall, within such period as may be specified in the notice given
in writing by the Director General to the operator or to the person having the
custody of the document, be produced for inspection to the Director General or a
person nominated by him by the person to whom the notice is given.
(5) A person who fails to comply with this section shall be guilty of an
offence and shall, on conviction, be liable to a fine not exceeding four thousand
ringgit, and to a daily fine not exceeding two hundred ringgit.
Establishment 21. (1) There shall be established and maintained by the Director General in
and accordance with this section, takaful guarantee scheme funds in respect of
maintenance general business and family solidarity business respectively carried out by the
of takaful operator in Malaysia so far as the business relates to Malaysian certificates.
guarantee
scheme funds (2) There shall be paid into the takaful guarantee scheme funds through
and payment the Director General all such levies as may be imposed on and collected from
of moneys operators in such instalments as the Director General may allow.
out of the funds.
(3) Subject to any direction by the Minister the total amount of levy shall
not exceed one per cent of the annual actual contribution of an operator in any
one year assessable on the general business, and in the case of family solidarity
business on any new business, carried out by the operator in the previous year.
In the case of an operator who has failed to submit his statutory returns
under section 41 by the due date, the Director General may, for the purpose of
calculating the amount of levy payable by that operator, assess an amount to be
[Pt. 11, S. 21]
26 ACT 312
deemed to be that operator's actual contribution income for the preceding year
and the amount so collected shall be adjusted against actual contribution income
shown in the statutory returns when submitted.
(4) Any sum including any other moneys or income received or paid into
the takaful guarantee scheme funds including any profit or dividends derived
from any investment of any sum out of such funds may be withdrawn and
utilized from time to time with the approval and subject to the direction of the
Director General to meet the administrative, legal, and other costs of maintaining
and administering such funds and the liabilities of any insolvent operator as may
be prescribed.
(a) at the close of :the last accounting period for which statements have
been lodged with the Director General under section 41 the operator
is insolvent;
(c) a receiving order has been made against him by the Court; and
(5) The Minister may at his discretion direct the Director General at any
time after the establishment of the takaful guarantee scheme funds the
discontinuance of the collection of any sum by way of levy if he is satisfied that
there is more than adequate money in either or both of the funds to meet the
liabilities of any insolvent operator in accordance with subsection (4), but may if
circumstances warrant, direct the Director General to resume the collection from
operators in respect of either or both of the takaful guarantee scheme funds:
Provided that the Minister may from time to time at his discretion direct
that this section shall not apply to certain types of takaful business within any
class or may apply only with such exceptions, restrictions or on terms or for any
period or in any manner as he may prescribe.
[Pt. 11, S. 21-23]
27 TAKAFUIL
(6) The Director General may appoint any suitable person to assist him
in the administration and distribution of the takaful guarantee scheme funds.
(7) The moneys in the takaful guarantee scheme funds in so far as they
are not for the time being required to be expended for the purposes of this
section may be invested in such manner as the Minister may approve and not
contrary to the Syariah and all income accruing in respect of such investments
shall be credited to the funds.
Enforcement 22. (1) If an operator defaults in complying with the provisions of sections
of requirements 15 to 21, the Director General may by notice in writing require the operator to
as to make good the default.
registers of
certificates (2) If the operator does not make good the default within one month after
and takaful the notice is given, the High Court thinks fit with a view to making good the
funds and default and otherwise securing compliance by the operator with sections 15 to
payment of 21.
levies by
operators. (3) Nothing done under this section shall affect any person's liability for
any offence against this Act.
Re-takaful 23. (1) An operator shall have arrangements consistent with sound takaful
principles for re-takaful of liabilities in respect of risks undertaken or to be
undertaken by the operator in the course of his carrying on takaful business.
(3) A person who fails to comply with subsection (2) shall be guilty of an
offence and shall, on conviction, be liable to a fine not exceeding two thousand
ringgit, and to a daily fine not exceeding one hundred ringgit.
[Pt. II, S. 24-25]
28 ACT 312
Payment in 24. (1) In the case of a family solidarity certificate issued to a participant
Malaysian who is a citizen, any solidarity moneys or moneys payable on the surrender of
currency of the certificate shall, notwithstanding anything in the certificate or in any
solidarity agreement relating thereto, be paid in Malaysian currency, unless at the time of
moneys under payment it is otherwise agreed between the operator and the person entitled to
family solidarity payment..
certificates.
(2) Where an operator satisfies the Director General as regards any
family solidarity certificate registered under this Act by the operator that the
solidarity moneys (including any moneys payable under the certificate on a
surrender) may not under the certificate or any agreement relating thereto be paid
in Malaysian currency, then for purposes of subsection (2) of section 17 there
shall be disregarded such part of the value of the assets of the relevant takaful
fund as is equal to the value of the operator's liability in respect of the certificate
determined on a basis approved by the Director General.
Assumption 25. (1) Subject to subsections (2) and (3), no operator shall assume any risk
of risk by in respect of any general business unless and until -
operator.
(a) the contribution payable is received by the operator or is guaranteed
to be paid by such person in such manner and within such time as
may be prescribed; or
(3) Subsections (1) and (2) shall apply to such description of general
business as may from time to time be prescribed.
[Pt. 11, S. 25-27]
29 TAKAFUL
(6) Any person who fails to comply with this section shall be guilty of an
offence and shall, on conviction, be liable to a fine not exceeding five thousand
ringgit.
Mistatement 26. A takaful certificate shall not be called in question by reason only of a
of age and mis-statement of the age of the participant in the case of the family solidarity
non-avoidance business.
of participation.
Control of 27. (1) The Director General may by notice in writing require an operator to
forms of submit to him the forms of proposal and certificates for the time being in use by
proposal, the operator, and any brochure which is for the time being in use there by the
certificates operator for describing the terms or conditions of, or the benefits to be or likely
and brochures. to be derived from, certificates; and where the whole or part of any such or
brochure is not in the National Language or English there shall be submitted
with it a translation in the National Language or English.
30 ACT 312
(4) For each occasion on which any operator uses a copy of a form or
brochure in contravention of subsection (3), the operator shall be guilty of an
offence and shall, on conviction, be liable to a fine not exceeding four thousand
ringgit.
Misleading 28. Any person who, by any statement, promises or forecasts which he knows
statement, to be misleading, false, or deceptive, or by any fraudulent concealment of a
promise or material fact or by the reckless making (fraudulently or otherwise) of any
forecast statement, promise or forecast which is misleading, false or deceptive, induces
inducing or attempts to induce another person to enter into or offer to enter into any
person to enter contract of takaful with an operator shall be guilty of an offence and shall, on
into contract conviction, be liable to a fine not exceeding twenty thousand ringgit or to
of takaful. imprisonment for a term not exceeding one year or to both.
Require- 29. (1) (a) In any case where, under section 39 or 42 of the Companies Act
ments as to 1965, it is unlawful to issue, circulate or distribute a prospectus relating to a
prospectuses company without a copy of it being first delivered for registration under that
and state- Act, it shall also be unlawful, in the case of a company registered or intended
ments of to be registered as an operator under this Act, to do so without the prospectus
capital. having been sanctioned by the Director General; and any person knowingly
Act 125. responsible for the issue, circulation or distribution of a prospectus in
contravention of this subsection shall be guilty of an offence and shall, on
conviction, be liable to a fine not exceeding twenty thousand ringgit.
[Pt. II, S. 29-32]
31 TAKAFUL
Opening of 30. Except with the prior approval in writing of the Director General, no
branch office operator shall open a branch office.
Disqualification 31. (1) Without prejudice to anything contained in the Companies Act 1965,
of managing any person who is a managing director, director, chief executive, principal
director, officer or controller of an operator shall cease to hold office-
director chief
executive, (a) if he becomes bankrupt;
principal
officer or (b) if he assigns his estate for the benefit of his creditors or makes an
controller of arrangement with his creditors pursuant to any law relating to
an operator. bankruptcy; or
Duty to 32. An operator shall give notice in writing to the Director General of the fact
notify change that any person has become or ceased to be its managing director, director, chief
of managing executive, or principal officer before the expiration of a period of fourteen days
director, from the day following that on which that fact or matter comes to the operator's
director, chief knowledge.
executive or
principal
officer.
(Pt. 11, S. 33-34]
32 ACT 312
Power of 33. (1) The Director General may from time to time inspect under conditions
Director of secrecy the books, accounts and transactions of any operator and of any of its
General to branch officers.
Require
information, (2) For the purposes of an inspection under subsection (1), the operator
etc. shall allow the Director General access to its books, accounts and documents
and shall give such information and facilities as may be required to conduct the
inspection:
Provided that the books, accounts and documents shall not be required to
be produced at such times and at such places as shall interfere with the proper
conduct of the normal daily business of that operator.
(3) Where the Director General is of the opinion that it is necessary for
any of the purposes of this Act to do so, he mat by notice in writing
require any director, officer or representative of any operator to –
(a) to furnish him with any information; or
(b) appear before him,
in connection with any matter related to any business carried on by that
operator in or outside Malaysia in the manner and to the extent, and in the
case of an appearance before him, at the time and place, specified in the
notice.
(4) Any person who refuses to allow an inspection under subsection (1),
or fails to comply with any provision of subsection (2) or any
requirement of the Director General under subsection (3), shall be
guilty of an offence and shall, on conviction, be liable of a fine not
exceeding twenty thousand ringgit and shall be liable to a further fine
not exceeding five thousand ringgit for every day during which the
offence is continued.”
Change in 34. (1) There shall be no change in the control of an operator incorporated
control of in Malaysia or registered as a society in Malaysia unless the Director General
operator. has given approval in writing for such change.
Takaful 35. (1) No person shall carry on takaful business in Malaysia as takaful
agents and agent for an operator not entitled under this Act to carry on the business in
brokers. question in Malaysia; and a person contravening this subsection shall be guilty
of an offence and shall, on conviction, be liable to a fine not exceeding twenty
thousand ringgit increased by four thousand ringgit for each day on which he is
proved to have done so, or to imprisonment for a term not exceeding twelve
months or to both.
(2) Subject to subsection (3), no takaful broker shall in the course of his
business as such negotiate any contract of takaful with an operator other than an
operator entitled under this Act to carry on the business in question in Malaysia,
and no person in Malaysia shall solicit takaful business for an operator not
entitled to carry on that business in Malaysia; and a person contravening this
subsection shall be guilty of an offence and shall, on conviction, be liable to a
fine not exceeding eight thousand ringgit or to imprisonment for a term not
exceeding six months or to both.
is required to give the prescribed information with respect to his connection with
the operator to the person to whom the invitation is issued.
(2) Any person who fails to comply with this section shall be guilty of an
offence and shall, on conviction, be liable to a fine not exceeding four thousand
ringgit or to imprisonment for a term not exceeding six months or to both.
Licensing 37. (1) No person shall act or hold himself out as a takaful broker unless he
of brokers. is the holder of a licence as a takaful broker granted by the Director General and
is a member of an association of takaful brokers approved by the Minister.
(Pt. U, S. 37-38]
34 ACT 312
(3) In granting a licence under this section the Director General may
impose such conditions as he thinks fit and may at any time add to, vary or
revoke such conditions.
(4) Every licence under this section shall be granted for a period of
twelve months and on the payment of the prescribed fees.
(5) The Director General may revoke any licence granted under this
section if he is satisfied that any of the conditions imposed on the licence has
been breached or it is in the interest of the public to do so.
Adjusters. 38. (1) No person shall act or hold himself out as an adjuster unless he is the
holder of a licence as an adjuster granted by the Director General and is a
member of an association of adjusters approved by the Minister.
(3) In granting a licence under this section the Director General may
impose such conditions as he thinks fit and may at any time add to, vary or
revoke such conditions.
(4) Every licence under this section shall be granted for a period of
twelve months and on the payment of the prescribed fees.
(5) The Director General may revoke any licence granted under this
section if he is satisfied that any of the conditions imposed on the licence has
been breached or it is in the interest of the public to do so.
[Pt. 11, S. 38-39]
35 TAKAFUL
(a) an advocate and solicitor and members of other professions who act
or assist in adjusting takaful claims as an incident to the practice of
their professions and who do not hold themselves out as adjusters;
(7) Every adjuster shall within one month after the end of each quarter of
the year submit to the Director General a quarterly report in the prescribed form
of all losses which are the subject of adjustments effected by him.
Examination 39. (1) When the Director General has reason to suspect or believe that a
of person person is acting or holding himself out as a takaful broker or an adjuster without
suspected of a licence granted under this Act, he may call for or inspect the books, accounts
acting, holding and records of that person in order to ascertain whether or not that person has
out as broker contravened or is contravening any provisions of this Act.
or adjuster.
[Pt. II-III, S. 39-41]
36 ACT 312
(2) Any person who wilfully refuses to submit the books, accounts and
records or to allow the inspection thereof shall be guilty of an offence and shall,
on conviction, be liable to a fine of twenty thousand ringgit or to imprisonment
for a term of twelve months or to both and to a daily fine not exceeding four
thousand ringgit.
Saving for 40. Nothing in this Part shall operate to invalidate any takaful certificate.
validity of
certificates.
PART III
Annual 41. (1) An operator registered under this Act shall prepare the statements of
accounts and account and other statements .required by Part I of the Second Schedule and
audit. lodge them with the Director General (together with any prescribed fee) and Part
TIT of that Schedule, so far as relevant to those statements, shall have effect
with respect to their form and contents and to the time and manner in which they
are to be lodged.
(2) An operator registered under this Act shall have its accounts audited
for each accounting period for which statements of account are prepared in
accordance with subsection (1), and when those statements are lodged with the
Director General there shall be lodged with them a certificate of the auditor as
required by Part I of the Second Schedule.
(3) The audit required by subsection (2) shall be made by a person who-
(c) has for the time being the approval of the Director General to
act for the purposes of this section.
(4) The documents to be lodged with the Director General under this
section for any accounting period of an operator shall be accompanied by copies
of any report submitted to the members of the operator with respect to that
[Pt. III, S. 41-4A]
37 TAKAFUL
period and (if it is not among the documents so lodged) by any statement of
accounts so submitted with respect to that period; but references in this Act to
documents lodged with the Director General shall not be taken to include
documents required by this section to accompany documents so lodged.
Actuarial 42. (1) Subject to this section, an operator registered under this Act in
investigations respect of family solidarity business shall have an investigation made by a
and reports qualified actuary into the financial condition of that part of the takaful fund of its
as to family family solidarity business specifically allocated for payment of takaful benefits
solidarity and a report thereon made to it by the actuary, and shall be lodged with the
business. Director General (together with any prescribed fee) such abstract of the actuary's
report and certificate relating thereto and such statements as to that business as
are required by Part 11 of the Second Schedule and Part III of that Schedule, so
far as relevant to those documents, shall have effect with respect to their form
and contents and to the time and manner in which they are to be lodged.
(2) Investigations under subsection (1) shall be made annually at the end
of each accounting period as the operator may determine.
(3) References in this Act to documents lodged with the Director General
shall not be taken to include documents required by this section to accompany
documents so lodged. .
38 ACT 312
(b) the investigation is not made to comply with subsection (1) or with
any provision as to returns in the law relating to takaful in a country
outside Malaysia, but the results of the investigation are made
public,
then the operator shall, as to the lodging of documents with the Director General,
comply with the requirements of subsection (1) as in the case of an investigation
under that subsection.
Power to 43. (1) If it appears to the Director General that any document lodged in
require accordance with sections 41 and 42 is in any particular unsatisfactory,
returns incomplete, inaccurate or misleading or that it does not comply with the
under requirements of this Act, the Director General may by notice in writing require
sections 41 such explanations as he considers necessary to be made by or on behalf of the
and 42 to operator within such time (not less than fourteen days) as is specified in the
be rectified. notice.
(2) The Director General may, after considering the explanations referred
to in subsection (1), or if such explanations have not been given by or on behalf
of the operator within the time specified in that subsection, reject the document
or give such directions as he thinks necessary for its variation within such time
(not less than one month) as is specified in the directions.
(3) Directions given under subsection (2) with respect to any document
may require such consequential variations of any other document lodged by the
operator under sections 41 and 42 as may be specified in the directions.
(4) Where directions are given under subsection (2), any document to
which they relate shall be deemed not to have been lodged until it is re-
submitted with the variations required by the directions, but the operator shall be
deemed to have submitted the document within the time limited by the Second
Schedule if it is resubmitted as aforesaid within the time limited by the
directions.
[Pt. 111, S. 44-45]
39 TAKAFUL
Additional 44. (1) Any participant of an operator shall have a right, on applying to the
provisions operator, to be sent by the operator at an address supplied by him copies of
as to returns documents lodged by the operator to comply with section 41 or 42, and to have
under sections the copies despatched not later than fourteen days after the operator receives the
41 and 42. application:
Provided that the right shall not extend to any document excepted from this
subsection by Part I of the Second Schedule, or to a document of any other
description except the last lodged of that description.
(2) Any person shall have the right, on payment of the prescribed fee, at
any time during working hours of the office of the Director General, to inspect at
that office any document lodged by an operator to comply with section 41 or 42
and any document required by subsection (4) of section 41 to accompany the
documents so lodged, and make a copy of the whole or any part of it:
Provided that the right shall not extend to any document excepted from this
subsection by Part I of the Second Schedule, or to documents of any other
description lodged more than ten years previously.
(4) Where an operator falls to comply with section 41 or 42, the operator
shall be guilty of an offence and shall, on conviction, be liable to a fine not
exceeding twenty thousand ringgit and to a daily fine not exceeding two hundred
ringgit.
Returns of 45. (1) Subject to subsection (3), where an operator is registered under this
changes in Act in respect of either class of takaful business, the operator shall from time to
registration time, until the operator ceases to be so registered, notify the Director General in
particulars. writing of any change affecting the operator's registration particulars, and
shall do so within three months of the change taking place.
[Pt. 111, S. 45-46]
40 ACT 312
(2) Where the change consists in the amendment of any document, or the
replacement of any document by a new document, the operator shall furnish the
Director General with a copy of the document showing the amendments or, as
the case may be, with a copy of the new document.
(3) This section shall have effect subject to any prescribed exceptions
and the Director General may in any particular case dispense (either
unconditionally or subject to any conditions) with the furnishing of information
under this section about any matter.
Investigation 46. (1) The Director General may institute an investigation into the whole or
of affairs of any part of the business carried on by an operator registered under this Act if it
takaful operator. appears to the Director General-
(a) that the operator is or likely to become unable to meet its obligations;
(b) that the operator has failed to comply with any provisions of this Act
relating to takaful funds;
(c) that the operator, having been given not-ice under section 33, has not,
within one month thereafter furnished the required information fully
and satisfactorily;
(d) that the operator has failed to comply with any provisions of section
41, 42 or 45;
(e) that the expenditure or any class of expenditure incurred in procuring,
maintaining or administering any takaful business of the operator is
unduly high in relation to the income derived from contributions;
(f) that the method by which any income or expenditure of the operator
is apportioned between takaful funds or between a takaful fund and
any other fund or account is inequitable; or
[Pt. 111, S. 46]
41 TAKAFUL
(g) that any information in the possession of the Director General calls
for such an investigation.
Notwithstanding the generality of the above for the purpose of this section,
assets include but are not limited to-
42 ACT 312
(v) cash ... ... any cash deposited in any bank lending -
institution or placed with any other
bodies or agencies for whatever period
either on current or deposit account
including any determinable amount of
cash in hand;
(3) The Director General may himself make the investigation or may
appoint an inspector to make it and report the results of it to him.
(4) The Director General may appoint an auditor (other than the auditor
who prepares statements of account or other statements of the operator under
section 41), an actuary, or any other suitable person to be an inspector to carry
out the investigation under this section and the cost of such an investigation shall
be paid by the operator.
(a) the operator, or any person having the custody thereof on behalf
of the operator;
(b) any person who is or has at any time been or acted as a director,
actuary, auditor, officer, servant or agent of the operator; or
to produce for his inspection, and allow him to have access to and to copy the
whole or any part of any books, accounts, records, or other documents of the
operator, whether kept in Malaysia or elsewhere (including documents
evidencing the operator's title to any assets):
43 TAKAFUL
evidencing the operator's title to assets held for the purposes of any such
business.
Powers of 47. (1) Where the Director General is satisfied that the affairs of an operator
Director are being conducted in a manner likely to be detrimental to the public interest,
General to the interests of the participants, or the interests of the operator, the Director
issue directions General may issue such directions to the operator as he considers necessary and
may in particular require the operator-
(b) to remove any of its directors whom the Director General considers
not a fit and proper person to remain a director;
(d) to take steps for the recovery by the operator of sums appearing to the
Director General to have been illegally or improperly paid,
[Pt. 11I, S. 47-48]
44 ACT 312
(2) The Director General may modify or cancel any direction issued
under subsection (1) and in so doing may impose such conditions as he thinks
fit.
(3) An operator who fails to complv with any direction issued under
subsection (1) shall be guilty of an offence and shall be liable, on conviction, to
a fine not exceeding twenty thousand ringgit or to imprisonment for a term not
exceeding six months or to both and to a further fine of four thousand ringgit for
every day during which the offence is continued after conviction.
General 48. (1) The persons who may petition under the Companies Act 1965 for the
provisions winding up of an operator registered under this Act, or for the continuance of the
as to winding up of such an operator subject to the supervision of the Court, shall
winding up. shall include the Director General.
(2) The Director General shall be a party to any proceedings under the
Companies Act 1965, relating to the winding up of such an operator, and the
liquidator in such a winding up shall give him such information as he may from
time to time enquire about the affairs of the operator.
(3) For the purposes of any proceedings under the Companies Act 1965,
for the winding up of such an operator by the Court, the contingent and
prospective liabilities of the operator in respect of certificates shall, in
determining whether it is unable to pay its debts, be estimated in accordance
with the regulations; and evidence that the operator was insolvent at the last
accounting period for which statements of account have been lodged with the
Director General under section 41 shall be evidence that the operator continues
unable to pay its debts.
(4) If the Minister submits to the Rules Committee proposals for making
special provision under section 372 of the Companies Act 1965, in relation to
operators registered under this Act or any description of such operators, the
Committee may by rules under that section give effect to the proposals, either as
[Pt. III, S. 48-49]
45 TAKAFUL
(5) Proposals under subsection (4), and rules made by virtue thereof, may
provide for modifying or excluding, in relation to operators so registered,
provisions of Part X of the Companies Act 1965, requiring the holding of
meetings or otherwise relating to the procedure in a winding up.
Special 49. (1) Where the Director General gives an operator a direction under
provision for subsection (1) (e) of section -47, the operator may be wound up by the Court
takaful operators under the Companies Act 1965 as if it has suspended its business for a whole
directed to cease year (or, in the case of a winding up under Division 5 of Part X of that Act, as if
takaful business. it had ceased to carry on business).
46 ACT 312
(3) An order under subsection (2) for a limited winding up shall be of the
same effect as an order for the operator to be wound up generally, except so far
as this section otherwise provides.
(4) Where such an order is made, the powers of the liquidator shall be
exercisable only for the purpose of applying the assets of the relevant takaful
fund (including the deposit under this Act) in discharging the liabilities to which
they are applicable, together with the costs, charges and expenses incurred in the
winding up; but the operator shall from time to time, as the Court may direct,
make such additions to those assets as are required to secure that they are
sufficient for the purpose or shall, if the Court so directs, discharge any of those
liabilities out of other assets.
(a) section 214 (or, as the case may be, section 316) and other
sections so far as they relate to contributories shall not apply;
(b) section 222 shall apply after, as it applies before, the making of
the winding up order, and subsection (3) of section 126 shall
not apply; and
(c) sections 223, 224, 272, 283 and 293 to 299 shall not apply.
(6) Where such an order is made, the Court may at any time, on the
application of the liquidator or of any person who might petition for the operator
to be wound up, substitute an order for the operator to be wound up generally,
and give such directions as the Court thinks fit as to matters in progress under
the previous order, and, subject to any such directions, the winding up shall for
all purposes connected with the substituted order be deemed to have commenced
at the time of the application for that order.
[Pt. III, S. 50-51]
47 TAKAFUL
Co-operative 50. (1) Where a society registered under the Co-operative Societies Act, is
societies an operator registered under this Act, no proceedings for the dissolution or
doing takaful winding up of the society shall be taken under Part VII of that Act except with
business. the consent of the Director General and in accordance with such conditions, if
any, as he sees fit to attach to that consent.
(2) Notwithstanding-
any such society which is an operator registered under this Act shall be deemed
to be ah unregistered company within the meaning of Division 5 of Part X of the
Companies Act 1965, and may be wound up by the Court accordingly under that
Act:
(a) the provisions of the Companies Act 1965 shall apply with the
substitution for references to the Registrar of Companies and the
register under that Act of references to the Registrar and register
under the Co-operative Societies Act; and
(b) the provisions of the Co-operative Societies Act, which govern the
disposal of any surplus, shall apply, subject to any necessary
modifications, as they apply where a society is wound up under that
Act.
Scheme for 51. (1) The whole or part of the takaful business of an operator registered
transfer of under this Act may be transferred to another operator registered in respect of the
business. class or claims of business to be transferred, if the transfer is effected by a
[Pt. III, 50-51]
48 ACT 312
scheme Under this section, but shall not be transferred except by such a scheme:
(2) Any operator registered under this Act shall by virtue of this section
have power to make such a transfer by a scheme under this section, and the
directors shall have authority on behalf of the operator to arrange for and do all
things necessary to give effect to such a transfer; and this subsection shall apply
notwithstanding the absence of the power or authority under the constitution of
the operator or any limitation imposed by its constitution on its powers or on the
authority of its directors.
(3) A scheme under this section may provide for the business in question
to be transferred to a body not registered as an operator under this Act in respect
of the relevant class of business (including a body not yet in existence), if the
scheme is so framed as to operate only in the event of the body becoming so
registered.
(4) A scheme under this section for the transfer of any takaful business
may extend to the transfer with it of any other business not being takaful
business, where the other business is carried on by the operator as ancillary only
to the takaful business transferred.
(5) A scheme under this section may include provisions for matters
incidental to the transfer thereby effected, and provision for giving effect to that
transfer, and in particular-
(a) for any property, rights or liabilities of the transferor (including
assets comprised in a deposit under this Act or in a takaful
fund) to vest, by virtue of the scheme and without further or
other assurance, in the transferee; and
49 TAKAFUL
Confirmation 52. (1) Before an application is made to the High Court for confirmation of a
of schemes. scheme under section 51-
(a) a copy of the scheme shall be lodged with the Director General
together with copies of the actuarial and other reports (if any) upon
which the scheme is founded;
(b) not earlier than one month after the copy is so lodged notice of the
intention to make the application (containing such particulars as are
prescribed) shall be published in the Gazette and in not less than two
newspapers approved by the Director General; and
(c) for a period of fifteen days after the publication of the notice a copy
of the scheme shall be kept at each office in Malaysia of every
operator concerned, and shall be open to inspection by all members
and participants of such an operator who are affected by the scheme.
(2) The Director General may cause a report on the scheme to be made
by a qualified actuary independent of the parties to the scheme and, if he does so,
shall cause a copy of the report to be sent to each of the operators concerned.
50 ACT 312
(4) An application to the Court with respect to any matter connected with
the scheme may, at any time before confirmation by the Court, be made by the
Director General or by any person who in the opinion of the Court is likely to be
affected by the scheme.
(5) The Court may confirm the scheme without modification or subject
to modifications agreed to by the operators concerned, or may refuse to confirm
the scheme.
Documents to 53. (1) (a) Where by a scheme under section 51 takaful business of an operator
be filed when is transferred to another, the transferee shall within one month after the scheme
scheme confirmed. takes effect, lodge with the Director General-
(ii) a copy of the scheme as confirmed by the Court, and a certified copy
of the order of the Court confirming the scheme;
(iii) copies of any actuarial or other reports upon which the scheme was
founded (being reports made since a copy of the scheme was lodged
under subsection (1) of section 52); and
[Pt HI-IV, S. 53-541
51 TAKAFUL
PART IV
MISCELLANEOUS AND GENERAL
“Central Bank 54. (1) The Central Bank shall be responsible for administering, enforcing,
to be responsible carrying out and giving effect to the provisions of this Act and the Governor of
for administration, the Central Bank shall be the Director General of Takaful and shall exercise,
etc. of this Act discharge and perform on behalf of the Central Bank, the powers, duties and
and Governor of functions conferred on the Director General under this Act.”.
Central Bank
to be Director
General of
Takaful.
(2) In the exercise of his functions the Director General shall act in
accordance with any general directions of the Minister.
(3) In the exercise of his functions under sections 18, 30, 34, subsection
(3) of section 37, subsection (3) of section 38 and section 47 the Director
General shall first consult the Minister and shall act in accordance with any
directions given by the Minister.
(4) If the Director General (or the acting Director General for the time
being during a vacancy or during the absence or incapacity of the Director
General) is not a qualified actuary, the Minister shall arrange for the services of a
qualified actuary to be available at all times for the purposes of advising in
relation to matters arising under this Act.
[Pt. IV, S. 55-56]
52 ACT 312
(6) The Director General may authorize or appoint any person to assist
him in the exercise of his powers or performance of his duties or functions under
this Act either generally or in any particular case.”
Indemnity. 55. The Director General, any officer of the Central Bank appointed under
subsection (5) of section 54, any person appointed under subsection (3) of
section 46, or any person authorized or appointed under subsection (6) of section
54 shall not be liable for anything done or omitted to be done in good faith in the
exercise of any power or the performance of any function or duty conferred or
imposed by this Act or any regulations made thereunder.
“Officers 55A. For the purposes of this Act, the Director General, any officer of the
deemed to be Central Bank appointed under subsection (5) of section 54, any person appointed
public servants. Under subsection (3) of section 46, and any person authorized or appointed
under subsection (6) of section 54 shall be deemed to be public servants within
the meaning of the Penal Code.”
Annual 56. (1) Not later than the end of April in any calendar year the Director
Reports. General shall prepare and submit to the Minister a report on the working of this
Act during the preceding calendar year.
(2) The Director General shall include in his report under this section for
any year, copies or summaries of documents lodged with him in that year under
sections 41 and 42, other than documents excepted from subsections (1) and (2)
of section 44, and may include copies or summaries of documents accompanying
those lodged as aforesaid; and he may also include in the report such notes on
any such documents or summaries as he thinks fit, and copies of any
correspondence between him and the operator about any such documents lodged
by or received from the operator.
(3) On receiving a report under this section, the Minister shall lay a copy
of it before each House of Parliament.
[Pt. IV, S. 57-60]
53 TAKAFUL
Statistics. 57. (1) Regulations may provide for the collection by or on behalf of the
Director General, at such intervals or on such occasions as may be prescribed, of
statistical information as to such matters relevant to takaful as may be
prescribed, and may provide for the collection and use of such information for
any purpose, whether or not connected with takaful.
(2) Such regulations may make provision for requiring operators, takaful
brokers and adjusters to furnish to the Director General, in the prescribed form,
such information as may be prescribed.
Service of 58. A letter containing a notice or other document to be served by the Director
notices. General under the Act shall be deemed to be addressed to the proper place if it is
addressed to the place in Malaysia which the addressee last indicated to the
Director General as his address or to the addressees latest address in Malaysia
known to the Director General.
Secrecy and 59. (1) Except for the purposes of this Act or of any criminal proceedings
penalty. under this Act, no person appointed to exercise any powers under this Act shall
disclose any information with respect to any individual business or the affairs of
any individual participant of an operator which has been obtained in the course
of his duties and which is not published in pursuance of this Act.
(b) furnishes the Director General with any information under or for the
purposes of any other provision of this Act,
[Pt. IV, S. 60-62]
54 ACT 312
shall use due care to secure that the document or information is not false in any
material particular; and if he does not use care in this behalf and the document or
information is false in a material particular, he shall be guilty of an offence and
shall, on conviction, be liable to a fine not exceeding twenty thousand ringgit or
to imprisonment for a term not exceeding six months or to both.
(2) Any person who breaches any duty imposed on him by or by virtue of
this Act or any regulations made under this Act as being or having been an
operator, takaful broker or adjuster shall be guilty of an offence and shall, in a
case where no other penalty is provided for by this Act or regulations made
under this Act, be liable on conviction to a fine not exceeding two thousand
ringgit and to a daily fine not exceeding two hundred ringgit.
(5) For the purpose of any proceedings under subsection (1) (a) a
document purporting to be signed by any person shall be presumed to have been
signed by him, unless the contrary is proved.
Compounding 61. The Minister may prescribe the offences which may be compounded under
of offences. this Act or the regulations made thereunder and the manner in which the
offences may be compounded.
Prosecution. 62. Any prosecution in respect of any offence under this Act or any regulation
made under this Act may be conducted by the Director General or any person
authorized in that behalf by the Director General.
Capacity of 64. A person under the age of eighteen years shall not have the capacity to
infant to enter into a contract of takaful.
participate.
Payment of 65. (1) When a participant, in relation to any family solidarity certificate or
family solidarity solidarity certificates, dies and on his death takaful benefits are payable under
claim without the certificate or certificates, the operator may make payment to a proper
probate, etc. claimant such sum of the solidarity moneys as may be prescribed without the
production of any probate or letters of administration and the operator shall be
discharged from all liability in respect of the sum paid.
(2) If, in any case mentioned in subsection (1), estate duty is leviable in
Malaysia on any such solidarity money, the operator may notwithstanding-
F.M.S. (a) section 50 (i) of the Estate Duty Enactment 1941 of the
7/11. Federated Malay States; or
pay to a proper claimant such sum as may be prescribed ,to be paid under
subsection (1) without the solidarity moneys being included in the schedule or
certificate mentioned in ;the sections referred to in paragraphs (a) and (b):
Provided that before making any payment under this subsection the
operator shall give not less than fourteen days' written notice by registered post
to the Collector of Estate Duty with such particulars as he may require.
(3) Where a sum is paid under subsection (2) on account of any solidarity
moneys and the solidarity moneys are not within twelve months after the
payment is made included in the schedule or certificate referred to in subsection
(2), the operator shall deposit the balance with the Treasury; but before
refunding such balance to the operator on his application to pay to the person
entitled to the balance, the Treasury may apply the whole or part of the sum
deposited in paying any unpaid estate duty leviable on the death.
56 ACT 312
Knowledge of 66. (1) A person who has at any time been authorized as its agent by a
and statement takaful operator and who solicits or negotiates a contract of takaful in such
by authorized capacity shall in every such instance be deemed for the purpose of the formation
agent to be of the contract to be the agent of the operator and the knowledge of such person
deemed relating to any matter relevant to the acceptance of the risk by the operator shall
knowledge be deemed to be the knowledge of the operator.
and statement
by operator.
(2) Any statement made or any act done by any such person in his
representative capacity shall be deemed, for the purpose of the formation of the
contract, to, be a statement made or act done by the operator notwithstanding any
contravention of section 28 or any other provision of this Act by such person.
(b) where such person has ceased being its agent and the operator
has taken all reasonable steps to inform or bring to the
knowledge of potential participants and the public in general
the fact of such cessation.
Application 67. Where there is any conflict or inconsistency between the provisions of this
of other Act and those of the Companies Act 1965, the Contracts Act 1950, the
laws. Insurance Act 1963, the Road Traffic Ordinance 1958 and the Cooperative
Act 125. Societies Act, the provisions of this Act shall prevail.
Act 136.
Act 89.
Ord. 49158.
Act 287.
Sabah 3158.
Sarawak
Cap. 66.
Regulations. 68. The Minister may make regulations for carrying into effect the objects of
this Act, and for prescribing anything which under this Act is to be prescribed.
[lst-2nd Sch.)
57 TAKAFUL
FIRST SCHEDULE
[Sections 4 (2) (c), 13 (2), (5) and (6), 17 (3) and (4)]
MALAYSIAN ASSETS AUTHORIZED FOR DEPOSITS AND
TAKAFUL FUNDS
Act 275. 1. Investment certificates issued under the Government Investment Act 1983, or any other
securities of which the principal is charged directly or by way of guarantee on the Consolidated,
Fund of the Federation or of any State.
2. Shares in, or securities of, a body incorporated in Malaysia, which are listed by any stock
exchange approved under the Securities Industry Act 1983.
3. Shares in, or securities of, a society registered under the Co-operative Societies Act.
4. Estates or interests in land in Malaysia and, up to the value of that security, advances, loans,
credit facilities or financing facilities secured on any such estate or interest.
5. Any Malaysian currency, and any amount payable in that currency which is held on current
Act 102. account or any deposit account in Malaysia with a bank licensed under the Banking Act
Act 276. 1973 or the Islamic Banking Act 1983 or such other financial institutions as may be
prescribed.
SECOND SCHEDULE
[Sections 41 (1) and (2), 42 (1), 43 (4), 44 (1) and (2)]
RETURNS BY TAKAFUL OPERATOR
PART I
DOCUMENTS TO BE LODGED YEARLY
1. (1) An operator, to comply with subsection (1) of section 41, shall lodge such statements
of account and other statements as are mentioned in this paragraph.
(b) by any operator a profit and loss account for the whole of the operator's business,
together with separate balance-sheets, as at the end of that accounting period, for each class of
takaful business in respect of which the operator is registered.
[2nd Sch.]
58 ACT 312
(4) Regulations may modify subparagraph (3) (c) so that it requires statements of the
assets of a takaful fund to be made for parts of a calendar year instead of the whole year.
(5) The statement required by subparagraph (3) (c) shall be excepted from subsections
(1) and (2) of section 44.
2. (1) With any accounts and balance-sheet lodged under paragraph 1 there shall be lodged
a certificate of the auditor signed by him and stating whether in his opinion-
(a) the accounts and balance-sheet are in accordance with this Act;
(b) the balance-sheet truly represents the financial position of the operator; and
(c) the books of the operator have been properly kept and record correctly the affairs
and transactions of the operator:
Provided that where the audit does not extend to the whole business of the
operator the certificate of the auditor shall, as regards paragraphs (b) and (c), be
given subject to the appropriate limitation.
(a) that the operator has, during the relevant accounting -period, complied with the
provisions of subsection (2) (b) of section 4;
(b) whether in the relevant accounting period any part of the assets of the takaful
fund or funds maintained under this Act has been applied in contravention of
section 16, and whether during that period section 17 has been complied with in
relation to those assets and any as-sots falling within subsection (5) of section 17;
[2nd Sch.]
59 TAKAFUL
(c) as regards the documents evidencing the operator's title to any such assets
whether he has inspected such of those documents as are held by or on behalf of
the operator within Malaysia, and whether he has received satisfactory
information as to the whereabouts and custody of any others, specifying whether
the operator is complying with the requirements of section 20;
(d) whether all necessary and proper apportionments have been made in preparing
the accounts and balance-sheet, and have been made in an equitable manner; and
(e) such other contravention of -the Act as may be discovered in the course of the
audit.
PART II
(2) There shall be lodged an abstract of the actuary's report, which shall be signed by the
actuary and shall include-
(a) a summary and valuation of the certificates as at the date of the investigation; and
(b) a valuation balance-sheet as at that date of -the business to which the report
relates.
(3) There shall be lodged a certificate by the actuary, signed by him, that he has satisfied
himself as to the accuracy of the valuations made for the purposes of the investigation and as to
their being made in accordance with this Act, and as to the accuracy of the data on which they
are based:
Provided that, if the actuary is not a permanent officer of the operator, the certificate by the
actuary shall, so far as it relates to the accuracy of the data on which the valuations are based, be
given and signed by or on behalf of the operator's principal officer in Malaysia, and the actuary
shall in his part of the certificate state the precautions taken by the actuary to ensure the accuracy
of the data.
(4) There shall be lodged statements signed by the actuary analysing as at the date of the
investigation the position as regards certificates and contributions of the business to which the
report relates.
[2nd Sch.)
ACT 312
60
PART III
LODGEMENT, FORM AND CONTENTS
(2) The persons signing any balance-sheet shall certify that in their belief the assets set
forth in the balance-sheet are' fully of the value stated in the balance-sheet, less any investment
reserve fund taken into account; and they shall also either certify that in the relevant accounting
period no part of the assets of the takaful fund maintained under this Act has been dealt with in
contravention of section 16, and during that period section 17 has been complied with in relation
to those assets and any assets falling within subsection (5) of section 17, or state the exceptions.
(3) The persons signing a balance-sheet in respect of family solidarity business shall
certify that in the relevant accounting period the provisions of subsection (3) of section 65 with
respect to deposits of balance of solidarity moneys with the Treasury have been complied with.
5. (1) Subject to subparagraph (2), a document shall be lodged within six months after the
relevant date, or within such longer period as the Director General may allow (but not exceeding
nine months from the relevant date); and for this purpose the relevant date is the date to which
the document relates or, in the case of an account or statement for an accounting period, the end
of that period:
Provided that the Director General, upon being satisfied that the affairs of any operator are
being conducted in a manner likely to be detrimental to public interest, the interests of the
participants, or the interests of the operator, may in any such case specify a period shorter than
six months for the purposes of this subparagraph.
(2) Any such statement of the assets of a takaful fund as is required by subparagraph (3)
(c) of paragraph I shall be lodged within three months of the date to which the statement relates.
6. A document shall be in the National Language or English, and shall (as regards all five
copies) be either printed or, with the permission of the Director General, produced by other
mechanical means approved by him.
8. (1) Subject to the following subparagraphs, a document shall be in the prescribed form
and contain the prescribed particulars, and be prepared in accordance with the regulations
(including regulations for the way in which any valuation is to be., made or in which any item is
to be dealt with).
[2nd Sch.)
TAKAFUL
61
(2) The Director General may in any particular case permit such departure as he thinks fit from any
requirement of the regulations under subparagraph (1), if he is satisfied that the purpose of the document in
question will nevertheless be substantially fulfilled.