The Issue on the Sharia Supervisory Board Authority on Indonesia Sharia Insurance

Abstract

PT. Takaful Indonesia, as the first sharia insurance company in Indonesia, was established in 1994. Based on the data of the Financial Services Authority of Indonesia, there are currently 55 takaful companies in Indonesia. The law governing takaful is The Law of the Republic of Indonesia Number 40 the year 2014 about Insurance. Sharia insurance is also regulated in other regulations, such as in The Regulation of Capital Market Supervisory, The Regulation of Minister of Finance and Fatwa of the Indonesian Ulema Council. Although the takaful industry was established in 1994, there are still many problems with Indonesia's takaful operations. Among them, there are no specific laws on takaful, limited jurisdiction of the Shariah Supervisory Board and lack of explanation of the Shariah Supervisory Board's mechanism. This research aims to analyze the problems inherent in the jurisdiction of the Sharia Supervisory Board of the takaful industry in Indonesia. Qualitative research methods are used to analyze library data relating to sharia compliance at takaful companies and conduct interviews with related parties. This research found two issues in the jurisdiction of the Sharia Supervisory Board of the takaful industry in Indonesia. The problems are legal issues and institutional issues. Therefore, this study proposes regulatory improvements that can support sharia compliance.