Fiqh Aulawiyyat in Retakaful – Between RBC (Risk-Based Capital) Standards and Islamic Institutions

Abstract

Fiqh aulawiyat, the science of priority jurisprudence, is very relevant in Islamic financial services, more so in takaful and retakaful, whose principal purpose is risk management. Indeed, there is a strong relationship between fiqh aulawiyat and risk management and the latter is inherent in maqasid al-shari’ah, especially when viewed in the context of the various mafasid and madhar. This paper discusses the development of both fiqh aulawiyat and risk-based capital (RBC), and the application of the former in retakaful, in the context of the latter and Islamic financial institutions.