MTA/Version 3.

CODE OF ETHICS FOR TAKAFUL AGENTS OBJECTIVES

FOREWORD This Code of Ethics is formulated with a view to attaining the following
objectives:
One of the more prominent endeavor for Takaful Operators is to create a
healthy and highly credible business environment. A healthy and credible i. To provide a minimum standard of conduct for the Agents
environment is necessary to ensure that the interests of the Member while keeping to the principles and practice of meeting the
Companies and the benefits to the public are protected. objectives, missions and requirements of the Takaful
Operators;
I is impera i e ha he Takaf l Opera ors Agen s obser e he s andard of
ethics which forms the basis of the principles and business of Takaful. .

To this end, the Malaysian Takaful Associations (MTA) has made it their ii.
aim to introduce a set of rules of ethics for the use of the Takaful
Opera ors Takaf l Agen s. This Code of E hics is he basic g ideline for
Takaful Agent to observe in their practice. The agenda of the guideline is ii.
to strengthen universal moral values and consequently to uphold the
interests and the welfare of the company, the shareholders, the Takaful
participants, the community in general and the Agent themselves. iii.
PRINCIPLES
To create a healthy, transparent and fair business practice
code of conduct;
To inculcate best practice standard of conduct amongst
the Agents;
To ensure that the Agents constantly conduct themselves
in a manner which does not contradict the code of ethics
which has been drawn up.

Central to this Code of Ethics is the principle that this Code encapsulates SCOPE
the tenets of honest practices, responsible, transparent as well as carrying
social agenda for the community.
i. This Code of Ethics is applicable to all registered agents
of he Takaf l Opera ors b its provision shall not be
mandatory on In erna ional Takaf l Opera ors Takaf l
Agents;

ii. Where any provision of this Code of Ethics is or for any

reason becomes void, unenforceable or prohibited, it will
not affect the validity of or the enforceability of the other
provisions of this Code of Ethics; and

iii. This Code of Ethics is subject to the Takaful Act 1984 and
any other Act of law subsequent introduced governing the
practice of Takaful in Malaysia.

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INTRODUCTION Takaful Act Refers to the Takaful Act 1984 including

any amendments of the law or re-
1. Summary of Title enactments thereof.

This Code of Ethics contains the Code of Ethical Conduct for Takaful Business Refers to all Takaful Business as
Takaful Agents. defined in the Takaful Act 1984.

2. Interpretation Related Persons Persons related to a person including

i. For the purposes of this Agreement, unless the context a) the spouse;
otherwise requires.
b) a brother or sister;

Intermediaries Refers to any person or persons, c) a bro her or sis er of he person s

whether corporate or unincorporated, spouse;
authorized directly or indirectly to
procure, market, transact, deal or d) a person who has a direct
negotiate any takaful business for or on nasab(blood relationship) with the
behalf of Takaful Operators. persons;

Takaful Operators(s) Refers to a company licensed under the e) a person who has an ascending
Takaful Act 1984 to carry out the or descending nasab with the
business of takaful. persons;

Bank Refers to Bank Negara Malaysia. f) a spouse of any one of the

persons mentioned in paragraphs
Shariah Committee Refers o he Takaf l Opera ors (b), (c), (d) or (e);
Shariah Committee appointed
according to the provisions of their g) a person who has a direct
Memorandum and Articles of descending nasab with any of the
Association. persons mentioned in paragraphs
(b), (c) or (f);
Shariah Refers to rules of Shariah approved by
he Takaf l Opera ors Shariah h) an uncle, aunt or cousin to a
Committee or to the National Shariah person, or o he person s
Advisory Council, Bank Negara spouse; or
Malaysia, where applicable.

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i) a spouse, or a person with a

direct nasab either ascending or
descending, with the persons CODE OF ETHICS
mentioned in paragraph (h).

ii. Words importing the singular include the plural and words 1. Summary of Title
importing the masculine gender includes the feminine and
neuter genders. Words referring to a person include i. Each Agent is to conduct and deal with all Takaful
individuals and corporations. transactions, business, operations and activities according
to the Takaful Act and to observe Malaysian laws as well
iii. References to the provisions of any law refers includes a as Bank Negara Malaysia guidelines.
reference to any amendment of the law and re-
enactments. ii. Each Agent is to refer to the Takaful Operator in the event
of doubt or inconsistency with regard to a confirmation or
observation of the Takaful Act and other relevant
iv. References to all Parts, Sections, Schedules are to be regulations.
interpreted as references to all Parts, Sections and
Schedules of the Code of Ethics. 2. Agents Man al

v. Headings of parts and sections in the Code of Ethics is i. When underwriting, each Agent must comply with,
intended only for the ease of comprehension and should observe and to refer to underwriting and actuarial
not be taken into account in the interpretation of the principles applicable as prescribed by Takaful Operator;
provisions of this Code of Ethics. and

vi. References to any document includes references to the
same which may from time to time be amended in any
circumstances whatsoever or matters related thereto and
others documents executed from time to time as a
supplement or supplementary to it or in substitution to the
same.
vii. Words and phrases defined in the Agreement to which
this Code is an Appendix and in the First Schedule and
the Second Schedule thereto shall, when used herein,
bear the same meaning as in the Agreement, the First
Schedule or the Second Schedule, as the case may be.
ii. Each Agen m s refer o/be g ided b he Agen s
manual where it may safely be followed.
3. Specific Principles of Transaction
i. Family Takaful Agents are allowed to represent only one
(1) Takaful Operator. Representing another Takaful
operator for Family Takaful Business is prohibited.
ii. General Takaful Agents are permitted to represent two (2)
Takaful Operators.

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4. General Principles of Transaction
Agents MUST:
i. Signed a declaration that they will obey the guidelines laid
out;
ii. Introduce himself/herself as a Takaful Agent and produce
their registered Agent authorization card when dealing
with clients;
iii. Ensure that the proposed plan/scheme meets with the
clien s need and means;
iv. Pro ides cons l a ion ser ices based on he Agen s
e per ise and referring o he Takaf l Pro ider s e pertise,
where necessary;
v. Consider that all information given by a prospective
participant to the Takaful Operator and the Agent is
confidential whether he is still a Takaful Agent or has
ceased his period of service with the Takaful Operator.
The Takaful Agent is prohibited from disclosing or utilizing
certificate-holders personal informa ion, rademark,
correspondence be een clien s, and companies
accounts or business.
vi. Provide a comprehensive and comparison of the details of
each product when comparing the same to other types of
product;
vii. Observe the principles and values set out and compete in
a healthy manner in expanding the Takaful market and the
Takaf l Opera or s b siness;
viii. Communicate with clients with fairness and honesty;
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ix. Ensure that clients do not suffer any losses whether
through any act commission or omission of the Agent;
x. Provide extensive services (after sales services) to
Participants;
xi. Ensure that any advertisement or public announcement is
clear, does not confuse or misleads with regard to the
Agent or other members;
xii. For hose ho are appoin ed as a Takaf l Opera or s
Agency Manager or an Agency Supervisor to hold the
post on full-time basis.
Agents are PROHIBITED from:
i. Making, producing or participating in the making of any act
or announcement of any statement, promise or estimate
where it is known that the same is confusing or
dishonestly suppressing any material fact;
ii. Making any advertisement of the Agent himself or of his
agency through any print or electronic media such as
[newspapers, the internet] or others without Takaful
Opera or s ri en consen ;
iii. Using a job title/designation other than that allowed by the
company;
iv. Misleading the public by causing them to believe that the
Agent is a Takaful Operator or a Takaful protection
provider, or that the Takaful products provided are
provided by the Agent;
v. Making any inaccurate and unfair criticism of other
insurance companies or other Takaful Operators;
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vi. Persuading clients from canceling existing certificates,
unless such existing certificates do not meet the needs of
the client;
vii. Agents are also absolutely prohibited from using the
names of any proxy including that of relatives in order to
secure the contract as Agent with the intent of conducting
any transaction on behalf of the Takaful Operator;
viii. Using any information obtained by the Company to further
his own ends or for any purpose other than that of the
Takaf l Opera or s; and
ix. Imposing any additional charges on the agreed
contribution unless the prospective certificate holder is
informed of the amount and the purpose of the additional
charge.
5. Explanation of the Takaful Contract
Agents MUST:
i. Explain all provisions contained in a proposed contract(s)
to ensure that the client fully understands the extent of his
involvement;
ii. Give an explanation as to the exemptions contained in the
certificate;
iii. Specific provisions for Family Takaful contracts:
a) Focus on the long-terms nature of the certificate
and explain to the client the consequences of an
early surrender of the certificate;
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b) Clarify whether or not the certificate is exempted
from tax;
c) Where a certificate provides for profit-sharing with
the Takaful Operator or depends on variable
factors such as investment performance, a clear
illustration of the variable profits to be expected
must be made. In the case of collateral certificates
where the proceeds of the matured certificate are
used to settle financing facilities, the illustration
given must clearly show that there is no guarantee
that the full amount of the facility will be payable
upon maturity of the certificate;
d) When illustrating the profits to be gained from
investment, it must be explained that the profits to
be gained from investment is based on certain
assumptions. Therefore future profits are not
guaranteed; such profits may be lower or higher
than current profits (past performance does not
necessarily indicate future trend);
e) Agents are provided with illustrations by the
Takaful Operators. Therefore the Agents must
provide a complete illustration to a prospective
client during discussions;
f) Agents are absolutely prohibited from amending
the illustrations provided by the Takaful Operators
or from increasing the rate of investment profit
without written consent from the relevant Takaful
Operator;
g) Agents are absolutely prohibited from adding to or
highlighting certain favourable aspects only; and
h) Agents must provide information that is accurate
and without any intention of fraud or similar.
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iv. Specific provisions for General Takaful contracts 7. Accounts and Financial Aspects

a) For motor vehicle Takaful, no Agent may assume
any risks to which the Takaful (Assumption of Risk
and Collection of Contributions) Regulations 1985
apply unless and until cash before cover has been
accepted by the Agent;
b) For motor vehicle Takaful, where the contribution
has been paid to the Agent by the participant, the
Agent must remit the said contribution to the
Operator or to the collection account specified by
the Operator within seven (7) working days of the
date of such assumption over of risk.
c) Cancellation of a motor vehicle Takaful is not
allo ed e cep in cases here he par icipan s
cheque is rejected by the relevant bank.
6. Disclosure of Underwriting Information
When receiving a completed proposal form or any other materials,
Agents must:
i. All contributions or monies collected on behalf of the
Takaful Operator must be directly forwarded to the same
or be deposited as soon as possible into a bank account
in the name of the Takaful Operator;
ii. All accounting business and financial aspects must be
conducted with transparency and without giving rise to
any prejudice.
8. Subject to Laws and Other Regulations
The Agents are subject to the provisions of the Takaful Act 1984
and to other laws and regulations issued by the Takaful Operators,
industry law-makers and other authorities.
9. Agents are subjected to the fulfillment of the Minimum
Requirements for the Continuous Professional Development
(CPD) as per the Guidelines on CPD Hours issued from time
to time.
10. The Importance of Ethics for Agents

i. Avoid from influencing the proposer and should explain to Takaful transactions are based on trust and honesty as well as
him that all answers or statements are the responsibility of requiring a responsible attitude and a high level of
he proposer s; and professionalism. The confidence of Takaful participants and of the
public will be ensured and enhanced if Agents run their Takaful
iii. Provide an explanation of Section 28 of the Takaful Act Business on the following principles:
1984 whereby the proposer is informed of the
consequences of non-disclosure and of giving inaccurate i. Fairness
statements by focusing on the relevant statements ii. Honesty
contained in the proposal form and giving a detailed iii. Trustworthy
explanation thereof to the proposer. iv. Responsible
v. Tawakkal
vi. Magnanimous and charitable
vii. Transparence

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11. Disciplinary Procedures and Penalties
Where there has been a breach of the Code of Ethics by any
Agent, the Malaysian Takaful Association may impose any penalty
in accordance with the amount of penalty imposed by the relevant
Takaful Operator as follows (or a combination thereof):
i. The penalty amount imposed on the Takaful Operator by
the Malaysian Takaful Association due to the breach by
the Agent; and/or
ii. A proposal ha he said Agen s con rac be ermina ed.
Any breach of the Code of Ethics must be reported to the
disciplinary committee.
12. Amendments to the Code of Ethics
i. The Malaysian Takaful Association has the right to
rescind, modify, change or amend this Code of Ethics to
render it suitable to the Takaful Business environment and
other circumstances. Agents are hereby bound and
subject to any future amendments made; and
ii. In the event of any changes, the Malaysian Takaful
Association shall inform the Agents through a notice given
to the Takaful Operators before the said changes take
effect.
All Takaful Agents must at all times comply with every guideline and rule
contained in this Code of Ethics.
*Delete whichever is not applicable.
Kindly submit this portion to your Takaful Provider
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DECLARATION OF COMPLIANCE
I, *Mr/Mrs/Miss/ (Others, please state)
_____________________________________________________
(Name)
holder of NRIC Number _________________________________
as an Agent for
_____________________________________________________
(Takaful Operator)
do declare and affirm that I have read and understood the contents of the
Code of Ethics for Agents which has been shown to me, and I also
declare that I shall fulfill and comply with every regulation contained in this
Code of Ethics in the conduct of my duties as an Agent.
Signature:
_____________________________________________________
Designation:
______________________________________________________
Date:
_______________________________________________________
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