In Two Minds of Replacing Life Insurance Policy

  • Nor Haziah Hashim Universiti Sains Islam Malaysia
  • Zurina Kefeli Universiti Sains Islam Malaysia
  • Nursilah Ahmad Universiti Sains Islam Malaysia
Keywords: Life insurance policy, Takaful, Family Takaful


The case is about how Maju Takaful Resources (MTR), a takaful consultation firm, dealt with their agents’ grievances regarding the regulation of Replacement of Policy (ROP) imposed by Bank Negara Malaysia (BNM). The regulation was imposed to curb unwarranted replacement of life insurance policy and to ensure the interest of the policyholders is continuously safeguarded. The regulation specified that agents shall not receive any commission for any policy which is construed as ROP. However, the regulation has placed MTR at a great disadvantage, since most of their clients, whom previously subscribed to conventional life insurance policy wished to switch to family takaful (a shariah-compliant version of life insurance). Unfortunately, according to ROP regulation, these cases were still considered as ROP. The case allowed students to learn the effects of ROP on different stakeholders within the insurance and takaful industries in Malaysia.


Interview sessions with Suffian, the Agency Leader of Maju Takaful Resources, Melaka on 9th February 2017.

Bank Negara Malaysia, Guidelines on Replacement of Policy, Resolution 5/2006.

Bank Negara Malaysia, Financial Stability and Payment Systems Report 2016

Malaysian Takaful Association, Guidelines on Replacement of Family Takaful Certificates (ROC).

Malaysian Takaful Association Annual Reports: 2014 and 2015

Life Insurance Association Malaysia (LIAM) Annual Reports: 2014 and 2015

Hashim, N. H. (2006). Islamic life insurance purchasing decision: A preliminary study. The Journal of Muamalat and Islamic Finance Research, 3(1), 153-170.

Hashim, N. H., & Muda, M. (2004). Compatibility and Market Penetration of Family Takaful Product: A Comparative Study. The Journal of Muamalat and Islamic Finance Research, 1(1), 137-150.

The Edge. (August 2016). Malaysian insurance industry not up to market yet. Retrieved on 15th January 2017 from I Replace My Life Insurance Policy.

How to Cite
Hashim, N. H., Kefeli, Z., & Ahmad, N. (2019). In Two Minds of Replacing Life Insurance Policy. The Journal of Muamalat and Islamic Finance Research, 16(2), 77-85.
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