Archive for April, 2008

Variety is the spice of life in Islamic finance

April 26, 2008 at 10:34 pm · Filed under Analysis, Islamic Finance, Shariah ·Tagged

Variety is the spice of life in Islamic finance

Reuters
Published: April 26, 2008, 00:35

Despite growth rates at least twice as high as those recorded on global conventional financial markets, the Islamic financial industry remains fraught with diversity and heterogeneity, says Moody’s Investors Service in its special report entitled Islamic Banks and Sukuk: Growing Fast, but Still Fragmented.

Modern Islamic finance is a recent phenomenon. Only 30 years have passed since the first fully fledged Islamic financial institutions (IFIs) emerged, and the market for Sukuk (Islamic bonds) was virtually non-existent as recently as the beginning of this century.

Today, estimations tend to value the Islamic financial industry – which comprises about 300 Sharia-compliant banks, takaful (or Islamic mutual insurance) companies and mutual funds in line with the principles of Islamic finance – at more than $700 billion in terms of assets.

“The market for Sukuk alone, accounting for around $100 billion at year-end 2007, has exceeded the GDP of a country the size of Morocco,” says Anouar Hassoune, a Moody’s analyst and author of the report.

Moody’s notes that current excess liquidity prevailing in Gulf econ-omies since 11 September 2001 has fuelled both sustained demand for the products supplied by IFIs and the booming expansion of the market for Sukuk, while contributing to creating a very close link between Islamic banks and what remains to date a relatively illiquid compartment of the bond market. Nevertheless, the rating agency expects liquidity in the Sukuk market to improve gradually as the variety of Sukuk issuances widens.

Not only are volumes expected to exceed $150 billion by the end of the current decade, but the nature, geographic location and credit quality of future issuers are also expected to considerably evolve and diversify.

At this stage, the Islamic financial industry remains very much intermediated – or, in other words, more widely dominated by financial intermediaries capturing deposits to recycle them into on-balance-sheet asset portfolios than by disincarnated, de-territorialised and virtual capital markets.

Weakly co-ordinated

Moody’s notes that some 90 per cent of Sharia-compliant assets are concentrated on IFIs’ balance sheets and on those of conventional banks offering Islamic financial services and products through “Islamic windows”. Islamic finance is becoming increasingly “internationalised,” but essentially remains a collection of disseminated and still weakly co-ordinated local operations.

“A number of forces within the Islamic financial universe tend to contribute to its fragmentation. The core principles underlying Islamic financial products, although subject to vast consensus as to their formal content, remain differently interpreted and differently weighted in practice,” says Hassoune.

In Moody’s opinion, the lack of technical and contractual standardisation impedes the capacity of Islamic finance, as an alternative financing and investment model, to enhance its globalisation process, without necessarily forbidding its internationalisation.

Initiatives aiming at either introducing Islamic finance or strengthening its position are mushrooming across a wider range of countries, whether home to majority Muslim populations or not, but these remain country specific and weakly co-ordinated, despite the sustained endeavour of several cross-border organisations to bring some consistency to the concept.

“Building in prospective views is not an easy task in such a young industry. Nevertheless, we expect the Sukuk market to become more complex, more structured, larger, more diversified and more liquid as it evolves over time,” adds Hassoune.

Equally, IFIs are expected to explore new geographic horizons as well as new business lines, become more competitive and (paradoxically) contribute to the gradual emergence of a more disintermediated Islamic financial industry – one with a reduced presence of Islamic banks.

Source: http://www.gulfnews.com/business/Banking_and_Finance/10208467.html

Leave a Comment

The UK’s Development as a Major Marketplace for Islamic Finance

April 23, 2008 at 3:41 pm · Filed under Analysis, Islamic Finance, Islamic Investment, Shariah, UK, United Kingdom ·Tagged , , ,

The UK’s Development as a Major Marketplace for Islamic Finance
Anouar Hassoune, Standard & Poor’s – Emmanuel Volland, Standard & Poor’s – 23 Jul 2007

The UK is set to become the first non-Muslim country to be a major financial centre of Islamic finance. This article looks at the conditions that have allowed Islamic finance to grow in the UK, and how it may move forward.

Competition is heating up among the world’s financial centres to attract Islamic issuers and investors. So far, Dubai, Kuala Lumpur, Bahrain and, to a lesser extent, Riyadh and Singapore, are all well placed to capture part of the booming Islamic finance industry. The latest entrant is London, the only financial centre actively involved in Sharia-compliant market intermediation that is not in a Muslim country. London, as a financial centre, has a number of competitive advantages compared with its emerging-market counterparts, including:

* Large size and international reach.
* Deep, efficient markets, where investors can switch from one asset class to another (including in and out of sukuk).
* Liquidity in the secondary market.
* Tremendous human resources and expertise (including research, analysis, operations, and structuring capabilities).

In addition, the legal environment is robust. The tax regime applicable to sukuk coupons will make them deductible – no longer viewing them as rental payments but equivalent to interest. Announced 21 March 2007, among other initiatives pertaining to Islamic finance, this sukuk-friendly amendment to tax law in the UK stands to make London more attractive for issuing and trading sukuk, although Dubai has been so far the most active trading centre for sukuk notes. The largest sukuk to date were those issued by Dubai-based Nakheel Group for US$3.52bn early in the first quarter of 2007. These notes were listed in both Dubai and London.

The overall size of the sukuk market worldwide is estimated at nearly US$70bn,including issuance from Malaysia, Pakistan and, of course, the Middle East. However, the bulk of sukuk are over-the-counter instruments. Listed sukuk account for only 20-25% of outstanding sukuk issued worldwide, that is, US$10-15bn so far. There are more sukuk listed in Dubai than anywhere else, but the secondary market is virtually non-existent. Second is London, where the secondary market for sukuk totalled less than US$5bn at 21 March 2007. Among listed sukuk, Standard & Poor’s Ratings Services rates close to US$6bn or roughly 50% of sukuk outstanding that is listed globally. New sukuk issuance is expected to accelerate, and could reach US$20-25bn in the next five years, according to the most reasonable forecasts.

We believe that the global Islamic financial industry will benefit from the UK’s development as an attractive marketplace for Sharia-compliant financing and investment instruments – on both the wholesale and retail side. We estimate that up to 300,000 retail customers in the UK would be ready customers for Sharia-compliant banking services. The establishment of these services in the UK would extend the reach of the Islamic financial model – so far still concentrated in a few countries in the Middle East and Muslim parts of Asia. As for wholesale banking, London has the capacity to become a hub for Sharia-compliant financial flows that seek recycling in Europe. For example, Islamic investment banks such as the Bahrain-based Arcapita Bank B.S.C. and Gulf Finance House, both have offices in London where vast amounts of liquidity from the Gulf meet attractive Sharia-compliant asset classes packaged in private equity, real estate, and infrastructure funds domiciled in the more mature and stable European economies.

The UK intends to become a key player in market intermediation for sukuk. Competition from western financial centres is low, as limited appetite for Islamic finance is coming from New York, more interested in facilitating the trading of Sharia-compliant stocks, especially through the Dow Jones Islamic Index and, more recently, through the newly created family of Standard & Poor’s Sharia indices. London, on the contrary, has a wider approach to Islamic finance, encompassing a broader range of financial instruments and asset classes. For example, the Financial Services Authority (FSA) has recently licensed the European Islamic Investment Bank, a wholesale financial institution created expressly to recycle the massive amounts of institutional and private liquidity in the Gulf into Sharia-compliant asset classes originated in mature, stable, and transparent western markets.

The FSA has taken on an Islamic retail strategy in keeping with its mission that aims for inclusion. This principle aims at combating financial exclusion, that is, the incapacity or unwillingness of households to access banking services because of distance, poverty or religion.

Some UK citizens do not actively deal with banks simply because banking in the UK is based on interest, called ‘riba’ in Arabic, considered unlawful according to Sharia, or Islamic law. To prevent Muslim customers being excluded from the banking market because of their beliefs, the FSA has given its green light to established conventional banks to offer Sharia-compliant services. Both HSBC, through its Amanah brand, and Lloyds TSB already offer Islamic banking services.

The FSA has also recently licensed a fully-fledged Islamic financial institution, the Islamic Bank of Britain, to serve the UK retail market with Sharia-compliant products. For Sharia-compliant services to become more comprehensive in the UK, the country needs to offer takaful (or Islamic mutual insurance). Licensing a takaful company or allowing conventional insurers to offer takaful products could be the next step in the UK’s strategy to further enhance its position as a leading Islamic financial centre.

The UK itself might be interested in issuing sukuk notes. Such issuance would be of high interest for investors who adhere to or favour Islamic finance. If the country did so, its issuance would be the second to carry an AAA rating, after sukuk issued by the Islamic Development Bank in 2005 for US$1bn. In addition, the UK would be the third sovereign outside the Middle East to issue Sharia-compliant paper, after Malaysia in 2002 through a US$600m structure called Malaysia Global Sukuk Inc. Japan has also expressed its intention to tap liquidity in the Gulf through the issuance of Sharia-compliant notes. The German State of Saxony-Anhalt has also issued sukuk, through a vehicle called Stichting Sachsen-Anhalt Trust for €100m in 2004.

http://www.gtnews.com/article/6846.cfm

Leave a Comment

The Difference Between Shari’a-compliant and Shari’a-based Islamic Finance Institutions

April 23, 2008 at 3:31 pm · Filed under Uncategorized

The Difference Between Shari’a-compliant and Shari’a-based Islamic Finance Institutions
Natalie Schoon, The Bank of London & The Middle East – 22 Jan 2008

This article considers the subtle differences between the two key players within the Islamic finance industry – Shari’a-compliant banks and Shari’a-based banks – and how they could co-operate to achieve the real potential of this market.

On 9 July 2007, the Bank of London and The Middle East (BLME) was launched in London. BLME is the second wholly Shari’a-compliant investment bank authorised and regulated by the UK’s Financial Services Authority (FSA). This brings the number of fully Islamic banks in the UK to three, with the total number of financial institutions offering Islamic financial services in the UK at 24. Another three Islamic financial institutions are in the process of applying for a licence with the FSA, showing the strength of the UK as the largest Islamic finance hub outside Muslim geographies.

Although a young segment of the financial industry, Islamic finance has gone through an exceptional growth period. Over the past 10 years, the industry has grown at a rate of 15-20% per year. This level of growth is expected to continue in the coming years and by far exceeds the rate of growth in conventional finance. The increase in wealth resulting from the rise in oil prices and the subsequent requirements for investment in oil-producing countries is a large contributor to the expansion of the Islamic finance industry. Coupled with relatively high returns, this attracts banks and investors alike.

Islamic financial products are not only offered by fully Shari’a-compliant banks but also by conventional banks employing specific distribution channels, such as Islamic windows and Islamic branches. The issue that arises is whether Islamic financial products offered by a conventional bank are equally acceptable to Muslims as those offered by fully compliant Islamic financial institutions. There is, after all, a difference in the level of Shari’a compliance of conventional and Islamic banks.
Shari’a Supervision

Islamic financial institutions have an additional layer of corporate governance over and above the governance mechanisms in place for conventional financial institutions. In addition to a supervisory board, independent external auditors, adequate policies and procedures and other governance mechanisms, Islamic financial institutions also have to ensure compliance with the Shari’a principles, which are reviewed and monitored by the Shari’a Supervisory Board (SSB). The role of the SSB is to issue fatwa (opinions) setting out how the bank’s operations should be carried out in order to be consistent with Shari’a rules and principles (ex-ante compliance). In addition, because of its role within the corporate governance framework, the SSB is also responsible for the monitoring of the institution’s Shari’a compliance in applying the fatwa in practice (ex-post compliance).
Shari’a Compliance

In order for a financial product to be Shari’a compliant, it needs to satisfy, at a minimum, the criteria of Shari’a law regarding the avoidance of Riba, Maysir and Gharar. Once these are satisfied and the bank obtains Shari’a supervisory board approval, the product or structure can be marketed as Shari’a compliant. As far as conventional banks are concerned, this is where Shari’a compliance stops. It does not constrain the bank from employing non-Islamically raised funds to invest in Islamic structures.
Shari’a Based Banks

A fully Shari’a-compliant or Shari’a-based bank takes the compliance with Shari’a law a step further. Not only do individual products have to meet all requirements but also all operations within the bank are required to be compliant with Shari’a law. This extends to contracts with suppliers, rental contracts and labour contracts. The bank is completely set up to work in line with the ethical framework of Shari’a, which makes it more likely to be able to structure all products to meet the requirements. In addition, there is no co-mingling of conventional and Islamically raised funds, since all funds are raised in line with Shari’a requirements.
Impact on Investment Decisions

The decision any investor, depositor, Sukuk issuer or other client of a bank will have to make is related to the trade-off between the level of Shari’a compliance and the reputation and historic track record of the bank.

A large conventional bank with a proven track record will provide a relatively higher degree of certainty than a newly established Islamic bank. In addition, large conventional banks have the advantage of the backing of a big balance sheet and structuring capabilities that are well beyond the potential of Islamic banks, at least at the moment. This becomes immediately clear when comparing the total assets of the largest Islamic bank with total assets of large conventional banks. At the end of 2006, the largest Islamic bank (Al Rajhi) had total assets of US$28.1bn. The likes of HSBC, Barclays and Citi, on the other hand, each had a total asset base close to US$2 trillion at the end of December 2006.

As a result, it is much easier for conventional banks to underwrite large Sukuk issues and to structure sizeable project finance structures than it is for Islamic banks. Between June 2006 and June 2007, five of the 10 biggest Sukuk arrangers were conventional banks. Issuers choose conventional banks for their proven track record, their ability to raise large sums of money and, most importantly, their competitive pricing.

Conventional banks, however, provide Islamic finance as part of a broader range of financial products and although the individual offerings are Shari’a-compliant and the distribution channel is different from other financial products, a conventional bank is likely to co-mingle funds raised in an Islamic manner with conventionally raised funds. In addition, conventional banks can hedge positions using innovative financial products that are often not allowed in Islamic banks, given the speculative nature of the majority of hedging products.

A small, relatively young Islamic bank does not have a long track record and can hence be seen by investors and depositors as carrying a higher risk. Although some comfort can be found in the fact that the bank is regulated, conventional banks are regulated in the same way. As a result of the smaller balance sheet size, Islamic banks are not currently in a position to underwrite large Islamic finance transactions unless they are part of a syndication effort and, even then, some transactions are out of their scope due to large exposure regulations and size limitations.

On the other hand, a Shari’a-based bank operates completely within the remit of the ethical framework defined by Shari’a law, something that could be of significant interest for Muslims. A fully Islamic financial institution will not only be audited internally and externally, but will also be subject to an annual review by the Shari’a supervisory board as an independent third party to ensure ongoing Shari’a compliance for the whole of the business. An Islamic window or branch of a conventional bank does not necessarily go through this type of ex-post compliance audit, and in any case does not have to report the results in its annual report.
Compete or Co-operate?

There is a strong call in the market to form an Islamic ‘mega’ bank but given the size of the individual Islamic banks, this appears to be quite a way off.

Although the number of Islamic banks is growing exponentially, their balance sheet size on a consolidated basis is not even remotely close to the size of any of the large conventional banks on their own. Thus, the two types of players operate in different market segments, which actually make them very complementary. In the end, there is a place for both Shari’a-compliant and Shari’a-based banks. By working closely together, they can achieve high market penetration and work on reaching the full potential of the market.

Source: http://www.gtnews.com/article/7055.cfm

Leave a Comment

Growth of the Islamic Takaful Market in Malaysia

April 23, 2008 at 2:56 pm · Filed under Islamic Insurance, Takaful ·Tagged ,

Growth of the Islamic Takaful Market in Malaysia
Kevin Willis, Standard & Poor’s – 22 Jan 2008

Malaysia’s well established regulatory and legal environments give its takaful market the edge over those being developed throughout the Gulf countries. However, this article argues that competition will hit Malaysian firms earlier than their neighbours.

Standard & Poor’s views the industry risk in the more established Malaysian takaful, or insurance, market as comparatively lower than in the Gulf Cooperation Council (GCC), due to the country’s more developed regulatory and legal environment. Growth potential for Islamic finance in Malaysia overall is still strong, particularly if it is to reach the level outlined in the Financial Sector Masterplan by Bank Negara Malaysia, the central bank of Malaysia.

The historical stability and profitability of the takaful market is attracting an increasing number of takaful operators to Malaysia. The market expectations of growth in gross contributions of about 15-20% per year are broadly in line with our expectations. At the same time, however, competitive pressures are likely to affect the Malaysian market earlier than the GCC takaful market, particularly in the general takaful segment. This may place pressure on pricing as companies begin to more aggressively compete for policyholders through a broader range of distribution channels.

In terms of credit ratings on the takaful sector, Standard & Poor’s applies the same analytical process to the traditional insurance market. Less than 45% of the Malaysian population have life or family takaful policies (these being long-term savings, investment, and/or protection plans) but this is relatively high when compared with statistics for the GCC. More significant is the proportion of life insurance penetration relative to non-life, which shows a higher level of development for the Malaysian market relative to the world average.

This is based on our view that in a wealthier and more insurance-aware market, life premiums outstrip non-life premiums per capita. Nevertheless, the relatively low level of total premiums per capita supports strong growth potential, with market expectations of growth of 20% a year being broadly in line with our expectations.

The more developed regulatory and legal framework for takaful in Malaysia compared to the GCC supports this potential for growth. The regulatory focus on the introduction of a risk-based capital framework promotes better risk management by takaful players. Also, the compulsory takaful sales agent qualification, as introduced by the Malaysian Takaful Association, is encouraging as it enhances product recognition and the advice available to consumers. The local regulator has also been supportive in raising consumer awareness about the need to insure (through consumer education programmes) and in encouraging bancassurance (the distribution of an insurance company’s products via a bank’s branch network) and broader distribution channels to improve the availability and proximity of takaful to the consumer.

The broader Islamic capital markets in Malaysia allow for a greater depth of instruments to aid better risk management and asset-liability management. This ultimately improves product choice, particularly in the family takaful segment, where a broader range of products has gradually been rolled out. From the mainly mortgage-backed portfolio of family takaful products, investment-linked products have grown rapidly in line with a stronger marketing strategy, and will be further boosted by stronger stock market performance in 2006 and 2007.

In the general takaful segment, much of the 2006 growth was driven by the motor line of business. This was not just due to an increase in the compulsory motor segment, but also as a result of a greater volume of business written in comprehensive and third-party liability, reflecting an increased use of broader distribution channels (including banking institutions).

Other lines of business, in particular commercial, showed growth potential, although this may be constrained by a relatively limited availability of retakaful (the Islamic insurance equivalent of reinsurance, or
risk protection taken by takaful companies) capacity for large, specialised risks. Nevertheless, with new retakaful operators in Malaysia’s offshore financial centre of Labuan, a Malaysian island off the coast of Borneo, these concerns seem to be easing somewhat.

Source: http://www.gtnews.com/article/7058.cfm

Comments (2)

Insurance: Takaful gaining ground

April 23, 2008 at 2:40 pm · Filed under Analysis, Islamic Insurance, Mudharabah, Takaful ·Tagged ,

Insurance: Takaful gaining ground

Hussein Mahmoud traces the origins of Takaful insurance and looks at why it is one of the fastest growing parts of the market

Takaful originates from the Arabic word ‘Kafalah’, which means ‘guaranteeing each other’ or ‘joint guarantee’. The Takaful market started in Sudan in 1979 and then spread to Asia, with Malaysia being one of the most mature markets in the Islamic Asian region. The Takaful concept reached the Gulf regional market in 2002, and gained ground in 2005.

The principles of Takaful are similar to those that underpin mainstream mutual insurance, as the Takaful system is based on mutual cooperation, responsibility, assurance, protection and assistance between groups of participants. In addition, however, a Takaful-branded product has to strictly follow the Muslim business norms of Islamic contracts for clients and Boards of Islamic Sharia scholars whose role is to vet business decisions.

Major international companies moving into the Takaful segment include AIG, Allianz, HSBC, Aviva, and Prudential. Further in 2008, the second largest Takaful company in the world, British Islamic Insurance Holding, is due to launch a UK base with the intention of raising more than $350m (£174m) of capital. As well as targeting the UK market, the company is also setting its sights on other European countries, especially France and Germany, the Gulf States and some Asian countries.

Why the demand?
Islamic banking institutions providing capital and Islamic financial instruments for asset management and investment have already developed successfully and there is now a strong demand, due to religious beliefs, for a Shariacompliant insurance product.

Takaful is one of the fastest-growing segments in insurance, with an average growth of 20% per annum. In 2006, worldwide Takaful contributions were estimated at around $3bn. Approximately 60% comes from general Takaful (general insurance) and 40% from family Takaful (life insurance and pensions).

According to Moody’s Global Credit Research service, total Takaful premiums were worth more than $2bn in 2005 and it is predicted that this will rise to $7bn by 2015.

In addition, consumer surveys have shown a high willingness for Muslims to switch their conventional savings, health and education plans to a Takaful product, given the same level of customer service, quality and profitability.

Defining a Takaful system
There are five elements that must co-exist to establish a proper framework for a Takaful system:

1. Ne’aa or utmost sincerity of intention — for knowingly following the guidance of, and adhering to the rule and purpose of, Takaful — co-operative risk sharing and mutual assistance.
2. Integration of Sharia principles — in particular, risk sharing under Ta’awuni principles, coincidence of ownership, participation in management by policyholders, avoidance of riba (an agreement in which the policyholder expects to receive a predetermined/ fixed amount that is greater than that invested), gambling (referred to as ‘qimar’ or ‘maisir’ in Arabic, which means any activity that involves an arrangement between two or more parties, each of whom undertakes the risk of a loss where a loss for one means a gain for the other), and al Gharar (activities that have elements of uncertainty, ambiguity or deception. In a commercial transaction, it refers to either the uncertainty of the goods or price of goods, or deceiving the buyer on the price of goods), and inclusion of the al Mudharabah (profitsharing arrangements) and/or al Wakalah (agents) principles for management practices.
3. Presence of moral value and ethics — whereby business is conducted openly in accordance with utmost good faith, honesty, full disclosure, truthfulness and fairness in all dealing.
4. No unlawful element — that contravenes Sharia and strict adherence to Islamic rules for commercial contract, namely:

  • Parties have legal capacity and are mentally fit n Insurable interest n Principle of indemnity prevails
  • Payment of premium is consideration (offer and acceptance)
  • Mutual consent, which includes voluntary purifi cation
  • Specific time period of policy and underlying agreement.

5. Appointment of a Sharia Advisory Council or Committee — to oversee the development and Islamic auditing of the Takaful operation and to make sure the investments are made in eligible areas that are allowed and approved by the Sharia board.

Two areas of business
Most Takaful products fall into two main areas.

General Takaful
General Takaful refers to schemes designed to meet the protection needs of individuals and corporate bodies in relation to material loss or damage resulting from a catastrophe or disaster infl icted upon properties, assets or belongings.

Participants (policyholders) pay their premiums (calculated by actuaries) into the Takaful fund as a Tabarru’ (donation). This will eliminate the elements of al Gharar and gambling. That is, the participant agrees to donate their contribution (premium) to the fund with a mission to help other participants covered under the various Takaful schemes when in distress. Therefore, it is the members who carry the risk and the Takaful operator is merely a custodian. Mudharabah, Musharakah and Wakalah models (see Takaful models box) can be implemented under this approach.

Family Takaful
The range of Takaful products offered falls into two categories: risk-type products that are provided for the protection of the participants; and investmenttype products with an element of risk. These products tend to be regular savings plans where a participant indicates his need to achieve a target lump sum by a specifi ed time in the future. Under this scheme the participants pay their premiums into the Takaful fund. A portion of the premium is allocated purely for saving and investment, and the balance goes as a Tabarru’ to build up reserves (claims reserves, unearned premium reserves and so on), to direct expenses, and to pay for Retakaful (reinsurance). Again, Mudharabah, Musharakah and Wakalah models can be implemented under this approach.

Beyond these two main areas, Takaful products are also available for health and pensions needs. It should be noted that Takaful insurance is not just for Muslims but also for non-Muslims, as it is seen by them as an ethical form of insurance.

Takaful models
» Mudharabah model (profit and loss sharing) This is a contract between capital providers with management, where any profi t is shared according to ratio or percentage agreed by both parties but any losses are borne entirely by the capital provider. In practice, participants provide capital to the Takaful operator.
» Musharakah model (joint venture) Both parties provide capital and/or management. Profi t is split either based on capital or upon negotiation, and any loss is distributed in proportion to capital contributions.
» Kafalah model (surety) A guarantor to become the surety in the event the debtor fails to honour his obligation. This type of contract can be used for the development of the Takaful scheme for bonds products.
» Wakalah model (agency) The principal appoints and authorises someone to act on his behalf. The authorisation could be either specific or general. The Wakeel (agent) could then charge a fee to the principal. This model is suitable for most Takaful products including products for corporate risks such as a ‘Rent-a-Captive’ concept.
» Ju’alah model (commission) Similar to the Wakalah contract except that the payment to the agent is measured on his output and performance. This contract could be used to develop distribution channels for Takaful. The most important element of a Takaful model is that there must be a subject matter of contract upon which contracting parties mutually agree by an ijab (proposal) and a qabul (acceptance).

Takaful structures
A Takaful operation in a non-Muslim country can be established in any one of the followings ways:
» A Takaful operator set up under the local Company’s Act with a distinct legal entity
» A Takaful window with any of the existing insurance companies
» A branch of any established Takaful company under a franchise agreement or other understanding
» Establishment of marketing facilities for Takaful products as part of an existing Takaful company with an agency agreement.

Hussein Mahmoud is a Senior Actuarial Analyst at ACE European Group

Source: http://www.the-actuary.org.uk/695085

Leave a Comment

Capita to support Sharia-compliant insurance

April 16, 2008 at 12:25 am · Filed under BIIH, Islamic Insurance, News, Takaful, United Kingdom ·Tagged , , ,

Capita to support Sharia-compliant insurance
February 29, 2008

” Sharia policies will comply with strict Islamic beliefs, which are in conflict with conventional insurance products.” by Angela Jameson

Outsourcing giant Capita, best known for running London’s congestion charge, is providing backoffice functions for a new insurance business tailored to comply with Islamic beliefs.

The initiative, due to launch in April, will see Capita initially sell car and home insurance by working with British Islamic Insurance Holdings. Life insurance, investments, savings and ethical financial products are to be launched later this year.

Capita, also known for collecting the BBC licence fee, will sell the policies as well as process claims and run the company’s back office. The deal should be worth £87 million to Capita over eight years.

Conventional UK insurance products are in conflict with Islamic beliefs as the Koran prohibits “riba”, loosely translated as interest but interpreted by many progressive Muslims as usury or extortionate interest. Insurance also contains elements of uncertainty and gambling that make it unsuitable for devout Muslims.

Bradley Brandon-Cross, chief executive of British Islamic Insurance Holdings, said: “The Muslim faith states that, because of various product features, conventional UK insurance options are in conflict with Islam and this creates a dilemma for British Muslims. We are planning to create a British insurer that operates in a way that removes this dilemma and creates an exciting new sector in the British insurance market.”

The insurance product will comply with “Takaful” principles. Takaful is an Islamic insurance concept which has been practised in various forms for more than 1400 years. It originates from the Arabic word Kafalah, which means guaranteeing each other or joint guarantee. The Takaful system is a form of mutual insurance based on co-operation and responsibility. The principles of Takaful are that policyholders co-operate among themselves for their common good; each pays a subscription, which eliminates uncertainty and losses are divided and liabilities spread across a community pool. No individual should derive advantage at the expense.

Capita has been operating in the financial services market since 2000, first in the general insurance market and latterly in the life and pensions arena. The insurance sector has provided some of its biggest contract wins in the past year, when it began a £722 million contract with Prudential to administer 7 million mature life and pensions policies. The contract win has seen 1,750 Prudential UK staff transfer to Capita and a further 1,250 staff in Bombay have also joined Capita.

Since the turn of the year it has been taken on to run back office in Norwich of Marsh, the US-based insurance broker, in deal which is expected to be worth £200 million over 10 years.

Capita said yesterday that pre-tax profits had risen in the year to December 31 by 19 per cent to £238.4 million on turnover up 19 per cent to £2.07 billion. The company has all of its 2008 revenue of £2.3 billion in the bag and said that it has very good visibility on 2009 and 2010 earnings.

Paul Pindar, chief executive, said that any economic downturn was likely to be good for Capita as other companies looked to outsource their back offices.

Increasingly, Capita is also running other companies’ front office and sales operations. For instance, it runs customer contact centres for DSG, formerly Dixons, and eircom, the Irish telecoms operator.

Capita has said that it will increase its dividend by 33 per cent, in line with a five-year average of 32 per cent increases. It has also proposed to return 25p a share through a special dividend.

Source: http://business.timesonline.co.uk/tol/business/industry_sectors/support_services/article3458486.ece

Leave a Comment

Islamic finance manages over $500b assets

April 15, 2008 at 11:35 pm · Filed under Islamic Finance, Islamic Investment, News ·Tagged ,

Islamic finance manages over $500b assets

22/03/2008 10:02:00 AM GMT
Islamic banking has emerged as one of the vital pillars of the global economic system.

Islamic banking, with 15 to 20% growth a year, has emerged as one of the vital pillars of the global economic system.

(AJP – Bahrain Tribune) Islamic banking, with 15 to 20% growth a year, has emerged as one of the vital pillars of the global economic system.

Islamic financial institutions (IFIs) are operating in over 75 countries, managing between $500 billion and $1 trillion assets, an economist and member of Bahrain’s Parliament Dr Jassim Hussain said.

In Japan to present a paper on Islamic banking, the MP urged Japan, being one of the top industrialised economies, to join the global trend by adopting the Islamic banking model as an alternative and safe banking and financial system. He made a presentation at the Japan Institute for International Affairs dealing with Islamic banking opportunities in Bahrain.

The audience included professionals from diverse fields such as academics, investors and news agencies. The economist said that IFIs work under strict Shariah guidelines and are based on the basic principle that the money earns return once used in productive or real investment.

He said: “Islamic banking prohibits a guaranteed, predetermined rate of return, making the entire cycle from investment to returns more transparent and open, unlike the conventional way of baking where depositors get a sense of a certain level of returns at the time of deposit.

Islamic finance encourages risk sharing, promotes entrepreneurship, a connect based in creating a welfare state with equal opportunities for everyone and not for a select group of people in each society who holds wealth.

On the socio-economic level as to how investment can play a positive role in building a robust system, Shari’a prohibits investment in some activities such as gambling and liquor. “At the start of the year, some 300 IFIs are operating in 75 countries, managing some $500 billion, and there is a projection to reach a $1 trillion in the next few years.

Talking about Bahrain’s experience, Dr Hussain said Bahrain Islamic Bank was set up 30 years ago – the first ever Islamic commercial bank was opened in 1975 in the United Arab Emirates – and this institution has set a benchmark for other new entities aspiring to become leading Islamic banks.

Total assets of Bahrain-based IFIs (retail and wholesale) 10 years ago amounted to $1.4 billion, increasing to $1.9 billion six years ago, still to $ 8 billion three years ago and $16.4 billion last year.

However, figures do not fully capture full activities of Bahrain-based Islamic institutions (Gulf Finance House’s investments in different countries like $1 billion plus the Jordan Gate project). As of last January, Bahrain boasted some 26 banks plus two special ones dealing primarily with property.

Local, conventional banks offer dedicated branches (Ahli United Bank) offering al Hilal Islamic Banking Services since last October which has a separate Shariah board.

Mostly wholesale (investment), a few commercial global banks provide Shari’a-compliant products (window) like Citi and HSBC.

Islamic banking products include murabaha (trade with a markup or cost plus financing) accounts for three-quarters of the Islamic financial activities, mudaraba (profit sharing), general investments, accounts for 10 per cent of Islamic financial activities, musharaka (equity participation), like joint ventures in ijara (leasing), salam (deferred payment or delivery of goods), sukuk (Islamic bonds) and now credit cards.

The concept of Islamic banking credit cards (with a one-time charge plus fee per transaction) was launched six years ago by Shamil Bank of Bahrain, yet no major breakthrough was experienced but the product is there all the same.

Source: http://www.islamonline.com/news/newsfull.php?newid=102001

Leave a Comment

Takaful-Islamic insurance set for strong growth

April 15, 2008 at 11:19 pm · Filed under Analysis, Islamic Insurance, News, Retakaful, Takaful ·Tagged ,

Islamic insurance set for strong growth

Written by Adrie van der Luijt
Monday, 14 April 2008

Takaful growth has outpaced that in conventional insurance in most countries of the Middle East.

Takaful is an Islamic insurance concept which is grounded in Islamic muamalat (banking transactions), observing the rules and regulations of Islamic law.

Gulf cooperative countries (GCC) represented over 50 per cent of the value of global Takaful contributions of $2 billion in 2006.

Ernst & Young’s inaugural World Takaful Report 2008, launched at the Annual World Takaful Conference 2008, shows that 59 of the 133 Takaful operators worldwide are within the GCC countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

The report also forecasts that accepted contributions globally would rise to more than $4.3 billion in 2010 and that the 20 per cent annual growth rate of the industry would be maintained for the foreseeable future.

General Takaful, which includes Property & Miscellaneous Accident Takaful, currently accounts for approximately 50 per cent of written business globally and in the region.

Key challenges and drivers

While current growth rates indicate a future Takaful industry of $10-15bn within the next ten years, there are critical factors that must be addressed to maintain this expansion.

Key challenges facing Takaful, as outlined by the report, include a fragmented and undercapitalised landscape, limited re-Takaful capacity, problematic asset management and lack of local solution offerings and local distribution channels.

The drivers of Takaful demand include high economic growth and increase in per capita GDP, a youthful demography, increasing awareness, a greater desire for shari’a compliant offerings and increasing asset based, shari’a compliant financing.

Noor Ur Rahman Abid, managing partner of audit and assurance business services at Ernst & Young Middle East, said that it is clear that there are significant growth opportunities for the Takaful industry, especially when the estimated global insurance premiums are as high as US$3.7 trillion.

Most Organisation of Islamic Conference (OIC) countries have underdeveloped insurance sectors. Premiums in the Middle East are at 1 per cent of nominal GDP compared to 8 per cent in North America.

In addition, high levels of market liquidity and with income levels rising in the region, should contribute to a future rise in the global Takaful industry.

Takaful used to underwrite risk

Despite significant challenges, the outlook for the Takaful industry has excited the Islamic finance world, according to Sameer Abdi, head of Ernst & Young’s Islamic finance services group.

He explains that assets held and financed by the Islamic financial services industry are increasingly motivated to use Takaful to underwrite risk.

Existing Takaful capacity is slowly replacing conventional insurance in the industry.

“The challenge for Takaful operators lies not only in tapping extrinsic demand but also in developing their capacity and expertise to provide a competitive alternative to conventional insurance,” Abdi concluded.

Source: http://www.dofonline.co.uk/economy/islamic-insurance-set-for-strong-growth2568.html

Leave a Comment

Gulf Re and Islamic reinsurance services

April 13, 2008 at 10:02 pm · Filed under Islamic Insurance, Retakaful, Takaful ·Tagged ,

Gail Norstrom, CEO of Gulf Re, answering question about re-Takaful during interview with Emirates Business 24:7 emagazine

Do you have plans for Islamic reinsurance services?

The re-Takaful products are growing by 20 per cent annually and reached $2.5bn last year. The Islamic insurance and re-insurance sector, Takaful and re-Takaful, started gathering momentum. It is based on the principle of co-operative insurance and mutuality.

As the Shariah compliant alternative to conventional insurance, the market for re-Takaful is making progress and looks set to continue this growth as more Islamic finance instruments become available.

We are just starting but we may think about creating a re-Takaful organisation to offer Islamic reinsurance services to our clients. This needs very precise evaluation and requires the recruitment of very highly specialised staff.

Source & full interview about overall insurance industry: http://www.business24-7.ae/cs/article_show_mainh1_story.aspx?HeadlineID=5490

Leave a Comment

Origins and Operations of Takaful System

April 13, 2008 at 8:34 pm · Filed under Islamic Insurance, Saudi Arabia, Shariah, Takaful ·Tagged , ,

Note: I’ve found this explanation on Takaful as one of the best and comprehensive from Takaful Taawuni website.

Origins and Operations of Takaful System

Background Elements to Takaful

Four fundamental factors must co-exist to establish the proper framework for a Takaful system:

A. Nea’a, or utmost sincerity of intention for knowingly following guidance and adhering to the rules of a Takaful system.

B. Integration of Shariah Conditions, namely: risk protection sharing under ta’awuni principle, coincidence of ownership, participation in management by policyholders, avoidance of Riba and prohibited investments, and inclusion of al Mudharabah or Wakalah principles for Takaful management.

C. Presence of Moral Values and Ethics, business is conducted openly in accordance with utmost good faith, honesty, full disclosure, truthfulness and fairness in all dealings.

D. No Unlawful Element that contravenes Shariah and strict adherence to Islamic rules for commercial contracts; namely the key elements present are:

* Parties have Legal Capacity (ie. +18 years old) and are mental fit

* Insurable Interest

* Principle of Indemnity prevails

* Payment of Premium is consideration (offer and acceptance)

* Mutual Consent (which includes voluntary purification)

* Specific Time Period of Policy and underlying Agreement

Main Objections against Conventional Insurance

While there a number of objectionable elements existing with conventional insurance, three main ones stand out.

Qard Al Hassan

According to Islamic principles, only one type of loan, Qard el Hasan (lit. good or benevolent loan) is allowable. Under the concept of Qard el Hassan, the lender may not charge interest or any premium above the actual loan amount. Some Muslim jurists state that this restriction includes directly or indirectly any benefits associated with the loan: “…this prohibition applies to any advantage or benefits that a lender might secure out of the qard (loan), such as riding the borrower’s mule, eating at his table, or even taking advantage of the shade of his wall.”

Muslims are encouraged to invest actively in ventures with an intent to share profits or losses that may result, rather than becoming a passive creditor. Unlike conventional commercial banking (largely based upon fixed, guaranteed rates of return-interest), this mutual sharing of risk promotes communal enterprises, risk-taking and productive activities. Monies are not sitting idle or invested at nominal, fixed rates of return. Instead, monies are applied to commercial transactions or agarian cultivation where risks and rates of return are balanced. A higher degree of risk in investment attracts a concomitant high rate of return to investors, provides stimulus to an economy and creates an environment for entrepreneurs to maximize their productive efforts.

By contrast, most conventional insurers invest premiums in bonds/loans (corporate and municipal) as well as other interest generating investments (involving Riba from Islamic perspective).

Riba (Interest/Premium/Usury)

The single most important aspect that differentiates Islamic finance from conventional finance and banking is the absence of interest. As discussed earlier, the Sharia prohibits both the taking and paying of interest (Riba) no matter what the purpose of the transaction, or the amount of interest charged. Apart from a minority interpretation of Sharia by a few Scholars, the consensus among Islamic jurists is that Riba and interest are the same.

There are four occasions in the Holy Quran where Riba is clearly prohibited. Refer to V.30:39; V.4:161; V.3:130 and V.2:275-276.

In the Yusuf Ali translation, Riba is described in commentary as “undue profit made, not in the way of legitimate trade, but out of loans of gold and silver, and necessary articles of food, such as wheat, barley, dates and sale…including profiteering of all kinds, but exclude economic credit, the creator of modern banking and finance…” He goes on to comment on the relationship of debitor-creditor in the four verses that follow: “…on behalf of debtors, as creditors are asked to (a) give up even claims arising out of past on account of usury, and (b) to give time for payment of capital if necessary, or (c) to write off the debt altogether as an act of charity.”

The use of Riba is clearly prohibited by Prophet Muhammed (PBUH) in a Hadith, where the Prophet (PBUH) condemned those who accept interest, as well as those who pay it or are witness to such a transaction.

Riba, however, circumscribes other aspects that makes commercial transactions suspect as well: “The Prophet (PBUH) forbade indeterminent, doubtful or speculative transactions or selling something before having possession of it.” “The Prophet (PBUH) forbade purchases from needy people and purchases involving uncertainty such as the sale of fruit before its maturity. “

Al Gharar (Uncertainty)

All commercial transactions must contain full disclosure. In other words, any transaction entered into should be free of uncertainty, deception and unknown elements or speculation. Al parties involved should have “full disclosure” or knowledge of the “counter values intended to be exchanged as a result” of the transaction, including the fact that “profits” cannot be guaranteed. The purpose of this prohibition is to avoid exploitation and injustice, especially on the part of the holder of capital.

Examples of prohibited transactions include: options, futures, derivatives, short sales and forward foreign exchange transactions (rates are determined by interest differentials). A number of transactions are treated as exceptions to the rule of Gharar. Such commercial transactions contain special treatments to assure they are organized to minimize harm and risk to both parties. Such transactions are:

1. Sales with payment in advance (bai’bithaman ajil)

2. Contract to manufacture (Istisna)

3. Hire contract (Ijara).

Specifically, Takaful transactions are design to minimize Al Gharar since the risk of future events can neither be known in advance nor influenced in any way. Note that the mere fact of purchase of a Takaful Contract in no manner affects future events nor does it guarantee that any specific outcome will/will not occur. Obviously, nothing in a Takaful operations can influence Al Qadar (Allah’s swt destiny).

Precedents for Islamic Insurance (Takaful)

An Islamic alternative to contemporary insurance is known as Takaful, and is based on the concept of Ta’awun, or mutual assistance. Ta’awun forms the basis of many Islamic practices. The teaching of Islam in regard to the equality and brotherhood of believers, and their responsibilities toward one another and all humanity led to several forms of mutual assistance both social and economic. Takaful as practiced in the sixth century (Christian Era A.D. and +50 Hijrah) actually evolved from tribal practices of mutual assistance dating back to pre Islamic times. There are several examples in pre-Islamic history whereby families, tribes or related members throughout the Arabia peninsula pooled their resources as a mean to help the needy on a voluntary and gratuitous basis. There practices were validated by Prophet Muhammed (PBUH) and incorporated into the institutions of the early Islamic State in Arabia around 650 C.E.

Examples of these early Islamic practices include the following:

* Merchants of Mecca formed funds to assist victims of natural disasters or hazards of trade journeys.

* Surety called daman khatr al-tariq was placed on traders against losses suffered during a journey due to hazards on trade routes.

* Assistance was provided to captives and the families of murder victims through a grouping known as a’qila.

* Contracts, called ‘aqd muwalat, were entered into for bringing about an end to mutual amity or revenge.

* Confederation were brought about by means of a hilf, or an agreements for mutual assistance among people.

Origins of Bloodrite in Islam

Before the time of the Prophet Muhammad (PBUH) , raids, looting, and traditions to revenge those killed were a common fact of nomadic Arab life. The hardships of desert life and a war-like vigilance forged a unity amongst groups wherein a group would act as a social unit .

In the words of Dr. M. Muslehuddin: “..not only does the unit consider the loss of its individual member as its own, it also takes steps to cover such loss, either by revenge and blood-letting, or alternatively by payment of blood money” by the group on behalf of the individual.” Such a perspective towards life and early society can be viewed as an early form of insurance (mutual self-protection).

The practice of blood money, or “wergild” was sustained for nearly a thousand years as a provision against danger to which a group of persons are all equally subject. A group united by blood-ties and family-ties comes to the aid of a member through mutual action. Hence, the custom of sharing in common. This practice was used for plundered property as well as compensation for the loss of life to avoid feud and unchecked destruction. The Arabic term for bloodtie is maaqil , which is derived from aql or aqila.

{Note: The vestiges of these practices still exist in Saudi Arabia today. Motorists who cause injury or death are obliged to pay a “wergild” to the victim’s family.}

During the emergence of Islam( 623-670 CE), some of these customs, including ‘aqila were sanctioned by the Prophet Muhammad (PBUH). In this way, these customs became part of the Sunnah (collection of sayings and practices of the Prophet Muhammad (PBUH) and subject to regulations by the Shari’ah.

The principle of maaqil was affirmed by the Prophet Muhammad (PBUH) as related in the following story from the Sunnah.

“Allah’s Apostle gave this verdict about two ladies of the Hudhail tribe who had fought each other and one of them had hit the other with a stone. The stone hit her abdomen and as she was pregnant, the blow killed the child in her womb. They both filed their case with the Prophet and he judged that the blood money was for what was in her womb. The guardian of the lady who was fined said,”O Allah’s apostle! Shall I be fined for a creature that has neither drunk nor eaten, neither spoke nor cried? A case like that should be nullified” On that the Prophet said, “This is one of the brothers of soothsayers.”

Two ladies (had a fight) and one of them hit the other with a stone on the abdomen and caused her to abort. The Prophet judged that the victim be given either a slave or a female slave (as blood-money). Narrated Ibn Shihab: Said bin Al-Musayyab said, “Allah’s apostle judged that in case of child killed in the womb of its mother, the offender should give the mother a slave or a female slave in recompense. The offender said, “How can I be fined for killing one who neither ate nor drank, neither spoke nor cried: a case like that should be denied.” On that Allah’s Apostle said “He is one of the brothers of the foretellers.” {Sahih Bukhari, Volume 7, Book 71, Number 654-655, Narrated by Abu Hurairah.}

The decree in this case was that the Prophet Muhammad (PBUH) decided that the second woman’s kin would pay a penalty to the relatives of the first woman who was killed (aqila), in accordance with established custom.

Mutual assistance amongst members of a tribe was not originally a commercial transaction and contained no profit or gain at the expense of others. Rather, it evolved as a social institution: to mitigate the burden of an individual by dividing it among his fellow members (group persons) or tribe. In contrast, most modern insurance (even mutual stock insurance entities, but not mutual associations) is a capitalist-based commercial enterprise, where losses are projected in advance and funds (premiums) allocated to risks to cover them. Premiums are paid in line with such projections of risk.

In short, the former practice involves compensation for actual losses upon occurrence by dividing them among the group, whereas, the latter involves the transfer of losses in advance based upon past experiences. This transfer often is from policyholders (the group) to shareholders (owner of insurance company) and thus voids the age-old principle of mutual assistance .

It is noteworthy that the first Constitution in Medinah (622 C.E.) arranged by Prophet Muhammad (PBUH) contained three aspects directly relating to insurance.

· Provision for social insurance affecting the Jews, Ansar and the Christians.

· Article 3 which included “the immigrants among the Quraish shall be responsible for their word and shall pay their blood money in mutual collaboration.”

· Provision for Fidya (ransom) whereby payment is made to rescue the life of a prisoner and the aqila (relatives) could cooperate to free him.

Takaful Referenced with the Qur’an and Sunnah

Although the word Takaful does not appear in the Holy Quran, it is derived from the term Ta’awun, or mutual assistance and connotes the same meaning. The second verse of Surah 5 in the Holy Quran exhorts the individual to assist others:

* “Assist one another in the doing of good and righteousness. Assist not one another in sin and transgression, but keep your duty to Allah” V.5:2.

In addition, many of the virtuous customs from the pre-Islamic period of Jahiliyya were declared “Islamic” by the Prophet Muhammad (PBUH) when he said: ” the virtues of the Jahiliyya are acted upon in Islam.” He further clarified this point in the constitution written in Medinah.

* They {Muslims of the Quraysh and Yathrib tribes} are one community (ummah) to exclusion of all men. The Quraysh emigrants according to their personal custom shall pay the blood-rite {aqila} within their number and shall redeem their prisoners with the kindness and justice common among believers.”

* Believers are to other believers like parts of a structure that tighten and reinforce each other.” Al-Bukhari and Muslim .

* The Believer, in their affection, mercy and sympathy towards each other, are like the body- if one of its organs suffers and complains, the entire body responds with insomnia and fever.” Muslim.

Given the Quranic admonition to “assist one another” and the words of the Prophet Muhammad (PBUH) regarding mutual assistance, Takaful may be understood as an imperative upon Muslim believers:

* “… a system based on solidarity, peace of mind and mutual protection which provides mutual financial and other forms of aid to Members {of the group} in case of specific need, whereby Members mutually agree to contribute monies to support this common goal.” O.Fisher

Finally, although a believing Muslim is required to accept (destiny or pre-ordainment) which can incorporate misfortune, s/he is not a passive “victim of circumstances. Conversely, the believing Muslim is exhorted by the injunctions of the Holy Quran to proactively take precautions in order to minimize potential misfortune, losses or injury from unfortunate events. One specific such instruction appears in Hadith to the owner of the camel to first tie your camel then rely upon the destiny ordained by Allah (swt).[Al Tirmidhi Vol.4,p.668].

A Perspective on Takaful from Islamic Scholars

The Majority viewpoint by contemporary Islamic scholars is that Takaful (cooperative insurance) is fully consistent with Shariah principles. This perspective is upheld by numerous meetings and resolutions :

* Council of Saudi Ulama (1397 Ah/1977 CE) resolution

* Fiqh Council of Muslim World League (1398/1978) resolution

* Fiqh council of Organization of Islamic Conference (1405/1985)

* Islamic Fiqh Week Conference, Damascus 1961

* Second Conference of Muslim Scholars, Cairo 1965

* Symposium on Islamic Jurisprudence, Libya 1972

* First International Conference on Islamic Economics, Meccah February 1976

* The Islamic Conference,Mekkah,October 1976

The esteemed shariah advisory Board of Bank Aljazira confirms also its viewpoint and whole heartedly endorsed the Family and Group Takaful Programs now offered by Bank Aljazira .{Refer to Fatwa dated April 2001}.

-THE END-

Source: http://www.takaful.com.sa/m1sub2.asp
(13 April 2008)

Leave a Comment

Older Posts »