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The innovative Takaful product, which will be the first of its kind globally, is explained below in
the case studies section. However, it is important to highlight that the initial survey conducted
by the government was all-encompassing as it sought to identify the need to ensure financial
inclusion in student loan financing and ascertain the readiness of the Muslim community and
the overall finance industry in accepting the proposed model. How the Takaful model would
work when implemented in 2019/2020 is explained in the relevant section below, but it is worth
highlighting that one of the critical questions, that the government wanted responses for, was
whether the respondents believe there would be enough demand among students and
prospective studies for an alternative finance product that is Shari'ah-compliant.
Unsurprisingly, an overwhelming majority agreed that the demand is imminent. Out of the total
number of respondents, 94% (n=18,600) agreed that the demand is there for such products
while a negligible 1% (n=267) said there was no demand for such product.
Going beyond the demand for the product, another critical variable identified is acceptability of
the proposed Shari'ah -compliant product. The respondents were asked whether students or
prospective students who have faith-related concerns about the interest rate element in the
traditional loans would accept the alternative being proposed to ensure no student or
prospective student is financially excluded from accessing such important education financing.
In the responses, 81% (n=16.043) of the respondents agreed that the product would be accepted
as an alternative finance product for education financing, while 2% (n=311) disagreed.
National policies on Takaful in the UK are not restricted to government policies but also include
industry-driven regulatory practices which have influenced the development of the Takaful
sector. Though the insurance industry in the UK is regulated by the FCA for conduct purposes
and the PRA for prudential purposes, the Islamic Insurance Association of London (IIAL)
introduced self-regulatory standards to competent the statutory regulation. The IIAL was
established in 2015 as an international body to ensure industry practices are taken into
consideration in the future regulation of Takaful in the UK. Part of the objectives identified by
IIAL are:
 To promote its membership and the expertise they can bring to their existing and
potential clients across the world
 To provide its membership with a platform to meet, network and have their say on how
they wish to shape London as a world-leading provider of Islamic insurance and risk
solutions
 To provide an analysis of the development of the broader Islamic financial market and
how insurance will and can play a part in that development (IIAL, n.d.).
Against the above backdrop, the IIAL issued its principles for Takaful, which was launched by
City Minister John Glen MP at Lloyd’s library. The principal objective of the IIAL’s principles
which are based on best practices is to standardise market practices to ensure financial
consumer protection with regards to the Shari'ah compliance of products being offered in the
insurance and reinsurance sectors. It gives some level of certainty to prospective Takaful clients