Use these 60 concepts to connect Sharia insurance principles with practical agent decisions in Indonesia. Begin with participant funds and contracts, then work through compliance, family and general products, customer needs, professional responsibilities, and service. Each concept includes a worked example and a specific error to avoid. Monetary figures and product terms in examples are hypothetical; actual benefits, charges, and procedures depend on the relevant contract.
Sharia Insurance Foundations and Fund Structure
1. Mutual assistance and risk sharing
Takaful organizes mutual assistance among participants facing specified risks. Participants contribute to a collective arrangement that finances eligible benefits, while an operator manages it under agreed contracts. Risk sharing explains the relationship among participants; it does not mean every loss is covered or that the operator has no responsibilities.
Worked example: A participant suffers a covered fire loss. The eligible benefit is financed through the participant risk arrangement, rather than by returning only that participant's own contributions.
Mistake to avoid: Describing takaful as personal savings that reimburse every loss.
Source reference: AASI current code of ethics for sharia insurance marketers; AASI - Asosiasi Asuransi Syariah Indonesia
2. Tabarru and personal investment allocations
Tabarru denotes a donation commitment supporting mutual assistance. An amount allocated to the participant risk fund serves collective protection and should be distinguished from any separately recorded personal investment allocation. Donation-based participation does not automatically create a right to withdraw the donated amount; any payment or distribution follows the arrangement's terms.
Worked example: An illustrative contribution allocates Rp300,000 to tabarru and Rp500,000 to investment. The agent explains that the Rp800,000 payment is not entirely a personal investment balance.
Mistake to avoid: Promising repayment of every tabarru allocation on cancellation.
Source reference: AASI current code of ethics for sharia insurance marketers
3. Participant and operator responsibilities
Participants provide agreed contributions and accurate information; the operator administers the arrangement within its contractual responsibilities. The operator's role can include risk assessment, fund administration, and claims processing. These functions do not make an individual agent the decision-maker for acceptance or payment, and mutual assistance does not remove contractual conditions.
Worked example: A customer submits an application through an agent. The agent explains the process, but the authorized company function decides whether to offer the requested terms.
Mistake to avoid: Treating the agent's recommendation as acceptance of the application.
Source reference: AASI current code of ethics for sharia insurance marketers
4. Separating participant funds from operator funds
A Sharia insurance structure distinguishes participant-related funds from the operator's own funds. Within participant arrangements, risk and investment allocations may also require separate accounting. Identify the purpose and ownership treatment of each allocation before explaining balances, fees, or payments. Money moving between accounts needs a contractual basis rather than an informal assumption.
Worked example: A statement shows a participant investment value and an operator management fee. The fee belongs to a different accounting purpose and is not added to the participant's withdrawal value.
Mistake to avoid: Combining every account into one supposedly withdrawable balance.
Source reference: AASI current code of ethics for sharia insurance marketers
5. Wakalah and management fees
Wakalah is an agency arrangement under which one party authorizes another to perform specified tasks. In takaful, an operator may manage agreed activities for a disclosed fee. The authorization, fee basis, and responsibilities matter. A wakalah fee is compensation for management, rather than automatically a share of investment profit or underwriting surplus.
Worked example: A hypothetical contract sets a Rp100,000 management fee on a Rp1,000,000 contribution. That fee is identified separately before explaining the remaining allocations.
Mistake to avoid: Calling every operator payment an investment profit share.
Source reference: AASI current code of ethics for sharia insurance marketers
6. Mudharabah and actual profit sharing
Mudharabah is a partnership in which a capital provider and a manager share actual profit using an agreed ratio. Ordinary investment loss is generally borne by capital, while misconduct, negligence, or breach can change responsibility. A profit-sharing ratio is not a promised return on capital, and the arrangement must be read in its specific contractual setting.
Worked example: With an agreed 70:30 split and Rp1,000,000 of distributable profit, the capital provider receives Rp700,000 and the manager Rp300,000.
Mistake to avoid: Presenting a 70% profit share as a 70% investment return.
Source reference: AASI current code of ethics for sharia insurance marketers
7. Different contracts for different functions
A takaful arrangement can use different contracts for donation, management, and investment functions. Identify the function first, then the governing contract and financial consequence. The presence of wakalah in one part does not establish the rules for every other part. A product name alone cannot reveal its complete contractual structure.
Worked example: An arrangement uses tabarru for mutual protection and wakalah for administration. The agent explains each separately instead of describing the entire contribution as an agency fee.
Mistake to avoid: Assuming one contract label governs all fund movements.
Source reference: AASI current code of ethics for sharia insurance marketers
8. Expected losses in a participant pool
Expected loss combines the likelihood of a covered event with its expected financial severity across comparable exposures. It is an average used in risk analysis, not a prediction of an individual's claim. Contributions must also account for relevant expenses and uncertainty; an expected-loss calculation alone does not establish a product's contribution amount.
Worked example: For 1,000 comparable exposures, a 2% event probability and Rp5 million average loss produce expected losses of 1,000 × 0.02 × Rp5 million = Rp100 million.
Mistake to avoid: Using expected losses alone as a quoted contribution.
Source reference: AASI current code of ethics for sharia insurance marketers
9. Correlated risks and concentration
Pooling becomes less predictable when many participants can suffer losses from the same event. Geographic, occupational, or other concentrations can create correlated claims. Adding participants does not necessarily diversify a pool if they share the same exposure. Risk assessment must consider both the number of participants and the relationships among their risks.
Worked example: Two hundred shops on one flood-prone street can generate simultaneous claims. Two hundred shops spread across unrelated locations may offer better geographic diversification.
Mistake to avoid: Assuming a larger pool automatically eliminates catastrophe risk.
Source reference: AASI current code of ethics for sharia insurance marketers
10. Adverse selection and honest underwriting
Adverse selection arises when people with higher expected losses are more likely to seek protection, particularly when they know more about their risk than the operator. Accurate underwriting information helps manage this imbalance fairly. Higher risk is not itself dishonesty: a participant may fully disclose a condition and still require different underwriting terms.
Worked example: An applicant honestly reports a recent diagnosis. The agent forwards the information for assessment rather than calling the applicant fraudulent or promising standard terms.
Mistake to avoid: Confusing a disclosed high risk with deliberate deception.
Source reference: AASI current code of ethics for sharia insurance marketers
11. Retakaful and layers of protection
Retakaful supports risk management between a takaful operator or arrangement and a further Sharia-compatible risk-sharing arrangement. It concerns the financing of accepted exposures beyond the immediate participant pool. It does not automatically broaden the participant's coverage, remove exclusions, or give an agent authority to promise payment. Participant benefits remain governed by their own contract.
Worked example: An operator arranges retakaful for large property exposures. A participant's excluded loss remains excluded unless the participant's policy terms provide otherwise.
Mistake to avoid: Treating retakaful as an additional participant benefit.
Source reference: AASI - Asosiasi Asuransi Syariah Indonesia
Sharia Compliance and Governance
12. Sharia supervision and role boundaries
Sharia supervision assesses whether relevant structures and activities conform to applicable Sharia principles. A Dewan Pengawas Syariah, or DPS, has a specialist oversight role distinct from an agent's sales role. Agents should explain approved structures and route unresolved Sharia questions to authorized specialists rather than issue personal rulings or invent exceptions.
Worked example: A customer asks whether a proposed investment change is permissible. The agent requests the operator's authorized Sharia explanation before recommending the change.
Mistake to avoid: Presenting personal religious opinions as the operator's approved position.
Source reference: AASI - Asosiasi Asuransi Syariah Indonesia; AASI current code of ethics for sharia insurance marketers
13. Riba and contractual return promises
Riba includes prohibited interest in lending arrangements. In explaining Sharia insurance, distinguish a contractually required interest payment from a genuine investment outcome or another permissible contractual return. A favorable financial result does not establish compliance by itself. The underlying transaction and approved structure matter more than the label attached to a payment.
Worked example: A proposal promises a fixed increment solely for lending money. Calling that increment a bonus does not change the need for Sharia review.
Mistake to avoid: Assuming renamed interest becomes permissible.
Source reference: AASI current code of ethics for sharia insurance marketers
14. Gharar and clarity of obligations
Gharar concerns problematic uncertainty in transactions, especially where material rights or obligations are unclear. Insurance events are uncertain by nature, but takaful uses a mutual-assistance structure and defined terms to address that uncertainty. Agents should clearly explain contributions, benefit triggers, limitations, and fund arrangements rather than claim that every uncertainty is prohibited.
Worked example: A brochure says benefits depend on an event but never defines it. The agent obtains the contractual definition before presenting the benefit as understood coverage.
Mistake to avoid: Equating all future uncertainty with prohibited gharar.
Source reference: AASI current code of ethics for sharia insurance marketers
15. Maysir and legitimate protection
Maysir concerns gambling arrangements in which participants stake value on chance for a gain at others' expense. Takaful is organized around mutual assistance for specified protection needs. Explain that purpose and the contractual structure without suggesting that uncertainty alone makes an arrangement gambling, or that a Sharia label automatically validates any wager.
Worked example: A customer asks whether a death benefit is a prize. The agent explains its protection purpose, eligibility conditions, and mutual fund arrangement rather than promoting a payout opportunity.
Mistake to avoid: Marketing protection as a chance to profit from misfortune.
Source reference: AASI current code of ethics for sharia insurance marketers
16. Permissible investments require more than a label
Sharia investment assessment examines relevant business activities and financial or transactional features using the applicable approved methodology. A familiar brand or the word Islamic is insufficient evidence. Agents should rely on authorized fund information and specialist oversight, while distinguishing Sharia compliance from market performance: a permissible investment can still lose value.
Worked example: A customer assumes a Sharia fund cannot fall in price. The agent explains that compliance addresses permissibility, while investment value remains exposed to the fund's disclosed risks.
Mistake to avoid: Equating Sharia compliance with capital protection.
Source reference: AASI current code of ethics for sharia insurance marketers; AASI - Asosiasi Asuransi Syariah Indonesia
17. Underwriting surplus versus investment profit
Underwriting surplus relates to the participant risk fund's experience after relevant claims, provisions, and other applicable items. Investment profit concerns returns generated by invested assets. They arise from different activities and may have different allocation rules. A positive investment result does not prove that the risk fund has a distributable underwriting surplus.
Worked example: Investment assets earn Rp20 million, but claims and required provisions leave the risk fund without distributable surplus. The agent keeps the two results separate.
Mistake to avoid: Calling every positive fund result underwriting surplus.
Source reference: AASI current code of ethics for sharia insurance marketers
18. Surplus distribution is conditional
Any underwriting surplus distribution depends on the arrangement's terms, eligibility conditions, and applicable approvals. Surplus may be retained or allocated according to the approved structure; it should not be promised as an automatic refund. Distinguish an illustrative distribution from an entitlement already established under the relevant participant contract.
Worked example: A participant makes no claim and expects money back. The agent checks the actual surplus and distribution conditions before explaining whether any payment is available.
Mistake to avoid: Promising a surplus payment simply because no claim occurred.
Source reference: AASI current code of ethics for sharia insurance marketers
19. Qard and participant fund deficits
Some takaful structures use qard, a non-interest-bearing loan, to support a participant risk fund experiencing a deficit. Whether it applies and how repayment works depend on the approved arrangement. Such support is different from investment profit, an operator fee, or a participant distribution, and it does not eliminate the need to investigate the deficit.
Worked example: An arrangement records operator support as qard repayable under its terms from future available fund results. The agent does not describe the support as new investment earnings.
Mistake to avoid: Assuming every deficit is covered by an unconditional gift.
Source reference: AASI current code of ethics for sharia insurance marketers
20. Honesty, fairness, trust, and service
The AASI code organizes ethical business conduct around honesty, fairness, trustworthiness, and excellent service. Apply these values together: accurate information supports honesty, balanced treatment supports fairness, fulfilling commitments supports trust, and continuing assistance supports service. A technically correct statement can still mislead if a material limitation is deliberately hidden.
Worked example: An agent explains an attractive benefit and its restrictive eligibility condition before the customer decides. This combines truthful presentation with fair treatment.
Mistake to avoid: Treating a true headline as sufficient disclosure.
Source reference: AASI current code of ethics for sharia insurance marketers
21. Escalating a Sharia compliance uncertainty
A compliance uncertainty requires identifying the disputed feature, collecting the relevant approved documents, and referring the issue through the operator's authorized channel. Avoid making unsupported assurances while the question remains unresolved. Separate a structural Sharia question from an ordinary service error, because the appropriate specialist and corrective action can differ.
Worked example: A draft presentation describes a return inconsistent with the approved fund explanation. The agent stops using that statement and requests clarification from the responsible compliance function.
Mistake to avoid: Continuing a doubtful representation while awaiting an answer.
Source reference: AASI current code of ethics for sharia insurance marketers; AASI - Asosiasi Asuransi Syariah Indonesia
Family and General Sharia Insurance Products
22. Family protection and general protection
Family takaful commonly addresses life-related protection needs, while general takaful commonly addresses specified property, liability, or other non-life exposures. Product families help organize questions but do not determine every benefit. AASI distinguishes Sharia life and general agency fields, so candidates should connect shared foundations to the field-specific products they will explain.
Worked example: A parent needs financial support for dependants after death and protection for a shop against fire. These are separate needs requiring examination of different product contracts.
Mistake to avoid: Assuming one product family covers every household exposure.
Source reference: AASI - Asosiasi Asuransi Syariah Indonesia; AASI current code of ethics for sharia insurance marketers
23. Fixed benefits and indemnity benefits
A fixed benefit pays a specified amount when its covered trigger is satisfied. An indemnity benefit compensates an eligible financial loss within contractual limits. The distinction controls the calculation: a fixed benefit is not automatically reduced to actual expenses, while indemnity does not automatically pay the full stated limit.
Worked example: A hypothetical hospital cash benefit pays Rp300,000 for each eligible day. Four eligible days produce Rp1,200,000, regardless of whether the hospital bill is higher.
Mistake to avoid: Applying reimbursement calculations to a fixed daily benefit.
Source reference: AASI current code of ethics for sharia insurance marketers
24. Protection periods and additional benefits
A benefit requires both a qualifying event and an active applicable protection period. Additional benefits or riders can have different expiry dates and triggers from the main protection. Read each component separately; completion of contribution payments does not necessarily establish maturity, continued coverage, or the continued availability of every added benefit.
Worked example: A hypothetical main benefit continues beyond age 60, but an accident addition ends at 60. An accident at 61 cannot be assessed using the expired addition.
Mistake to avoid: Assuming every benefit lasts as long as the main contract.
Source reference: AASI current code of ethics for sharia insurance marketers
25. Medical reimbursement and eligible expenses
Medical reimbursement depends on which expenses qualify, applicable limits, and any participant cost sharing. A total bill and an eligible bill are different quantities. Room categories, services, and other conditions must be checked in the actual contract; agents should neither interpret treatment clinically nor promise reimbursement before eligibility is assessed.
Worked example: A hypothetical Rp8 million bill includes Rp1 million of excluded expenses. With no further deductions and sufficient limits, the eligible reimbursement is Rp7 million.
Mistake to avoid: Using the entire hospital bill without checking eligible items.
Source reference: AASI current code of ethics for sharia insurance marketers
26. Property cover and specified causes of loss
Property protection requires identifying the insured property, the covered cause of loss, and any exclusions or extensions. Damage alone does not establish a payable claim. Broad descriptions must still be read with exclusions, while named-peril protection requires a listed cause. Valuation conditions and property changes can also affect the assessment.
Worked example: A hypothetical shop policy lists fire but does not include flood. Water damage from flooding is referred for assessment under the actual wording, rather than promised as fire coverage.
Mistake to avoid: Treating all physical damage as the same insured event.
Source reference: AASI current code of ethics for sharia insurance marketers; AASI - Asosiasi Asuransi Syariah Indonesia
27. Motor protection and separate exposures
Motor-related protection can address damage to the covered vehicle, liability to others, or additional specified benefits. These exposures are distinct and require their own wording. Vehicle use, covered drivers, territory, and endorsements may matter. Never infer a benefit or an Indonesian legal obligation from a product's informal name.
Worked example: A hypothetical policy covers damage to the participant's vehicle but contains no third-party liability benefit. The agent does not promise payment for damage caused to another vehicle.
Mistake to avoid: Assuming own-vehicle protection includes every third-party loss.
Source reference: AASI current code of ethics for sharia insurance marketers; AASI - Asosiasi Asuransi Syariah Indonesia
28. Deductibles and benefit limits
A deductible leaves a defined portion of an eligible loss with the participant; a benefit limit caps the payable amount. Their order and interaction depend on the wording. State the assumed calculation explicitly instead of applying one universal formula. A covered loss can exceed both the payment received and the available limit.
Worked example: A hypothetical contract deducts Rp1 million before applying a Rp10 million payment cap. For an eligible Rp13 million loss, payment is min(Rp12 million, Rp10 million) = Rp10 million.
Mistake to avoid: Ignoring the contract's order of deductions and limits.
Source reference: AASI current code of ethics for sharia insurance marketers
29. Investment-linked units and changing values
An investment-linked structure can combine protection with an allocation into Sharia investment funds. Unit holdings multiplied by the applicable unit price give an illustrative fund value before relevant deductions. Market movements change that value, while protection follows separate contractual conditions. Investment value and protection benefit should therefore be explained independently.
Worked example: A participant holds 2,500 units. At Rp1,200 per unit, their value is Rp3 million; at Rp1,080, it becomes Rp2.7 million before applicable deductions.
Mistake to avoid: Presenting the original contribution as a guaranteed unit value.
Source reference: AASI current code of ethics for sharia insurance marketers
30. Contribution allocation and charges
A contribution may be allocated among mutual protection, investment, and disclosed charges under the product's terms. The amount paid is therefore not necessarily the amount invested. Distinguish deductions made before investment from later charges taken from an account, and explain their effects without inventing a standard allocation percentage.
Worked example: A hypothetical Rp1 million contribution allocates Rp250,000 to tabarru and Rp150,000 to charges, leaving Rp600,000 for investment. The investment allocation is 60% of the contribution.
Mistake to avoid: Showing the full contribution as money invested.
Source reference: AASI current code of ethics for sharia insurance marketers
31. Exclusions and waiting periods
An exclusion removes specified circumstances from coverage. A waiting period delays eligibility for a stated benefit under defined conditions. They require different reasoning: expiry of a waiting period does not erase an exclusion. Identify the particular benefit affected and use the contractual commencement and event dates rather than assuming one timing rule applies throughout.
Worked example: A hypothetical benefit has a 30-day waiting period and a separate excluded circumstance. An event on day 40 clears the timing condition but must still satisfy the exclusion rules.
Mistake to avoid: Treating elapsed time as proof that every circumstance is covered.
Source reference: AASI current code of ethics for sharia insurance marketers
Customer Needs and Ethical Presentation
32. Fact finding before recommending a product
Needs-based selling starts with the customer's dependants, income, commitments, existing protection, objectives, and relevant risk information. Separate confirmed facts from estimates and unanswered questions. The AASI code calls for identifying needs and asking suitability questions; the recommendation should follow the findings rather than determine which facts the agent chooses to collect.
Worked example: A shop owner initially requests investment growth. Fact finding reveals an uninsured business property and dependent children, so the agent discusses both protection gaps before proposing options.
Mistake to avoid: Selecting a preferred product before understanding the customer's needs.
Source reference: AASI current code of ethics for sharia insurance marketers
33. Calculating a simple family protection gap
A simplified capital estimate adds specified obligations and support needs, then subtracts resources genuinely available for those purposes. State assumptions clearly and avoid presenting an undiscounted calculation as a precise financial plan. The estimate informs a discussion; it does not establish underwriting acceptance or a universal benefit requirement.
Worked example: Debts of Rp120 million plus three years of support at Rp60 million annually equal Rp300 million. Subtracting Rp80 million of available resources leaves an illustrative Rp220 million gap.
Mistake to avoid: Calling a simplified estimate an exact required benefit.
Source reference: AASI current code of ethics for sharia insurance marketers
34. Avoiding double-counted resources
A resource reduces a protection gap only when it is realistically available for that particular need. Essential housing, restricted savings, and uncertain employment benefits may not be freely usable. Record the intended use of each resource so the same money is not counted against several obligations at once.
Worked example: A family has Rp100 million in savings, but Rp40 million is committed to an unavoidable expense. Only the remaining Rp60 million is included as available support capital.
Mistake to avoid: Deducting the same savings from both debt and dependency needs.
Source reference: AASI current code of ethics for sharia insurance marketers
35. Sustainable contribution affordability
Affordability concerns the ability to maintain contributions through the expected commitment, including periods of weaker income. Review essential spending, existing obligations, and payment frequency. A contribution that fits one favorable month may still be unsuitable. An affordability calculation should identify a constraint without implying that every remaining rupiah should be committed.
Worked example: Monthly income is Rp8 million and essential commitments are Rp6.5 million. The Rp1.5 million remainder must also support emergencies and other goals, so a Rp1.5 million contribution is not automatically affordable.
Mistake to avoid: Using the entire apparent surplus as a contribution budget.
Source reference: AASI current code of ethics for sharia insurance marketers
36. Matching protection to the duration of need
The duration of a protection need follows the underlying obligation, not simply the customer's preferred payment schedule. Dependency, a loan, and continuing business responsibilities can have different timelines. Match the proposed protection period to each need and distinguish how long contributions are paid from how long the relevant benefit remains available.
Worked example: A customer's loan ends in eight years, while a child's expected dependency lasts fifteen years. The agent evaluates these as separate durations rather than using the loan term for both.
Mistake to avoid: Assuming the shortest obligation defines every protection period.
Source reference: AASI current code of ethics for sharia insurance marketers
37. Risk tolerance and capacity for loss
Risk tolerance describes willingness to accept investment fluctuations; capacity for loss describes the financial ability to withstand them. Both matter when discussing an investment-linked Sharia product. A customer may welcome higher potential returns yet need stable access to money for essential commitments. Sharia compliance does not remove this suitability distinction.
Worked example: A customer accepts market volatility emotionally but needs the funds for tuition next year. Limited capacity for loss constrains the recommendation despite stated enthusiasm for risk.
Mistake to avoid: Treating willingness to take risk as sufficient suitability evidence.
Source reference: AASI current code of ethics for sharia insurance marketers
38. Illustrations and contractual promises
An illustration shows results under stated assumptions; a contractual promise specifies an obligation subject to its conditions. The AASI code requires accurate use of company-provided illustrations and restricts unauthorized changes. Identify projected values, actual guarantees, and the consequences of weaker performance instead of presenting the most favorable scenario as an expected entitlement.
Worked example: An approved illustration shows a future investment value of Rp150 million under one assumption. The agent explains that this figure is projected rather than a guaranteed maturity payment.
Mistake to avoid: Editing assumptions to make a product appear guaranteed.
Source reference: AASI current code of ethics for sharia insurance marketers
39. Checking understanding through plain explanations
A meaningful presentation explains benefits, risks, contributions, conditions, and charges in language the customer understands. A signature alone does not demonstrate comprehension. Ask the customer to describe a key feature in their own words, then correct any misunderstanding without embarrassment or pressure. Understanding should cover limitations as well as attractive benefits.
Worked example: A customer says every contribution remains withdrawable. The agent explains the tabarru and charge allocations again before proceeding with the application.
Mistake to avoid: Treating agreement to sign as proof of understanding.
Source reference: AASI current code of ethics for sharia insurance marketers
40. Comparing products on the same basis
A fair comparison evaluates products against the same need and distinguishes benefits, duration, exclusions, payment commitments, and investment risk. The AASI code prohibits incomplete or incorrect comparisons intended to influence purchase or termination. If replacement is considered, existing contractual rights and potential exit losses also belong in the comparison.
Worked example: Two products show the same contribution, but one has a shorter protection period. The agent explains the duration difference before suggesting they offer equivalent value.
Mistake to avoid: Comparing price while concealing materially different protection.
Source reference: AASI current code of ethics for sharia insurance marketers
41. Answering objections without exceeding competence
A customer question should be answered by identifying the actual concern and providing an accurate explanation within the agent's competence. The AASI code prohibits misleading statements and advice beyond the marketer's capacity and knowledge. Unresolved specialist questions need referral, while a customer's decision to decline should not trigger pressure or fabricated urgency.
Worked example: A customer asks about inheritance consequences of a beneficiary choice. The agent explains the product process and refers the legal interpretation to an appropriately qualified professional.
Mistake to avoid: Inventing a legal answer to overcome hesitation.
Source reference: AASI current code of ethics for sharia insurance marketers
AASI Standards and Agent Responsibilities
42. Distinguishing OJK, AASI, and company functions
OJK, AASI, and the represented company have different institutional roles. AASI describes certification, registration activities, ethical standards, and consultation with OJK; the company administers its products and supervises its marketers. Attribute each requirement to its actual source rather than treating association guidance, company procedures, and regulatory requirements as interchangeable.
Worked example: A company requires a particular application checklist. The agent identifies it as a company procedure rather than claiming that OJK prescribed every item.
Mistake to avoid: Attributing all industry rules to the same institution.
Source reference: AASI - Asosiasi Asuransi Syariah Indonesia; AASI current code of ethics for sharia insurance marketers
43. Certification, registration, and authorization
AASI's agency guidance distinguishes field-appropriate certification, OJK registration, association registration, and compliance obligations. Its code also addresses certification before marketing, subject to applicable legal exceptions. Passing an examination should therefore be distinguished from completing every requirement for a particular role. Confirm current status and company authorization for the chosen Sharia life or general field.
Worked example: Someone passes a Sharia life agency examination and assumes they can immediately market any general product. The agent checks the separate field and authorization requirements.
Mistake to avoid: Treating an examination pass as unrestricted permission to sell.
Source reference: AASI - Asosiasi Asuransi Syariah Indonesia; AASI current code of ethics for sharia insurance marketers
44. Agency agreements and permitted representation
The AASI code requires agents to comply with their agency agreements and describes representation of one Sharia insurance company, unless applicable law provides otherwise. The agreement requirement is distinguished from the code's treatment of non-agent marketers. Identify the person's role, represented company, and actual delegated powers before deciding what they may do.
Worked example: An agent is asked to present another company's product. They check the agreement and applicable exception rather than assuming customer demand authorizes dual representation.
Mistake to avoid: Applying an agent-specific rule without checking the person's role.
Source reference: AASI current code of ethics for sharia insurance marketers
45. Truthful applications and authentic signatures
The AASI code requires clear, correct, complete application information and prohibits manipulation, blank signed forms, and signing for the customer even at their request. If a customer cannot complete the form, the marketer should explain the questions and record the customer's dictated answers. Assistance must preserve the customer's answers and signature responsibility.
Worked example: A customer struggles to read the SPAS. The agent reads each question, records the stated answer, and obtains the customer's own signature on the completed form.
Mistake to avoid: Filling convenient answers into a previously signed blank application.
Source reference: AASI current code of ethics for sharia insurance marketers
46. Confidentiality and authorized disclosure
The AASI code restricts using or disclosing participant and company information outside authorized purposes. It provides exceptions involving the relevant company and participant approvals, or qualifying official instructions under applicable rules. Use authorized channels and disclose only what the legitimate purpose requires; possession of customer information is not permission for personal marketing.
Worked example: A former colleague requests a participant's health details. The agent refuses informal sharing and routes any legitimate request through the company's authorized process.
Mistake to avoid: Treating a personal relationship as authorization to disclose data.
Source reference: AASI current code of ethics for sharia insurance marketers
47. Contribution custody and temporary receipts
An agent may receive contribution payments only within the company's granted authority. The AASI code requires explaining temporary receipt terms, accurately acknowledging the amount, and promptly forwarding entrusted contributions. Taking, using, or delaying funds beyond the company's permitted period constitutes misuse under the code. A receipt must not be described as establishing coverage beyond its terms.
Worked example: An authorized agent receives Rp2 million and issues the approved temporary receipt. They forward the full amount without borrowing from it for personal expenses.
Mistake to avoid: Using entrusted contributions temporarily because repayment seems easy.
Source reference: AASI current code of ethics for sharia insurance marketers
48. Financial inducements and agent-funded contributions
The AASI code prohibits contribution discounts, commission rebates, and equivalent valuable inducements intended to secure a purchase. It also prohibits agents funding participant contributions, with an exception for spouses and specified direct-line blood relatives. These provisions address different transaction risks; the family exception does not create general permission to offer sales rebates.
Worked example: An agent offers to pay an unrelated customer's first contribution to win a sale. The funding is refused rather than disguised as a personal gift.
Mistake to avoid: Using the family funding exception to justify unrelated sales inducements.
Source reference: AASI current code of ethics for sharia insurance marketers
49. Churning within the same company
The AASI code describes churning as persuading a participant to change or replace a policy, or fund a new policy from an active one, within the same company without first explaining the resulting losses. It prohibits churning and its variations. Identify the funding source, company relationship, and consequences rather than treating additional sales as automatically beneficial.
Worked example: An agent proposes surrendering an existing contract to fund a new one at the same company but conceals the surrender loss. The proposal illustrates the prohibited conduct.
Mistake to avoid: Presenting replacement as an upgrade while hiding existing-policy losses.
Source reference: AASI current code of ethics for sharia insurance marketers
50. Twisting across different companies
The 2019 AASI code defines twisting around persuasion to alter or replace another company's policy, or use funds from an active policy there to buy a new one. Its definition includes a six-month period before or after issuance of the new policy. Apply that wording carefully and confirm current provisions before interpreting a real case.
Worked example: An agent encourages surrender of another company's active policy to finance a new policy one month later. The transaction is escalated for review under the twisting provisions.
Mistake to avoid: Assuming cross-company replacement is harmless because no cash is borrowed.
Source reference: AASI current code of ethics for sharia insurance marketers
51. Pooling and truthful sales attribution
In the AASI code, pooling means transferring sales attribution to another marketer; it is unrelated to actuarial risk pooling. The marketer recorded on the SPAS should be the person who performed the relevant prospecting, presentation, and sale through signing. A marketer must refuse attribution when they did not conduct the sale.
Worked example: An agent is asked to put their name on a colleague's application to satisfy a sales target. They refuse because the attribution would not reflect their work.
Mistake to avoid: Confusing prohibited sales pooling with legitimate participant risk pooling.
Source reference: AASI current code of ethics for sharia insurance marketers
Participant Service, Claims, and Complaints
52. Monitoring changes after the sale
Continuing service means checking whether relevant customer circumstances and protection needs have changed. A new dependant, altered business activity, or changed income can affect suitability or require a contractual update. Monitoring should identify a specific service need rather than manufacture a reason to replace the policy. Any alteration follows the company's authorized procedure.
Worked example: A shop begins storing different goods. The agent asks the company whether the changed exposure needs notification or revised terms instead of assuming the original cover remains identical.
Mistake to avoid: Using every customer change as an automatic replacement opportunity.
Source reference: AASI current code of ethics for sharia insurance marketers
53. Contribution status and continuity of protection
Payment due dates, permitted late-payment arrangements, lapse, and restoration are different matters. Their effect on protection depends on the contract and company confirmation. Agents should establish the relevant status before describing a benefit as active. Paying an overdue amount does not necessarily restore every benefit immediately or remove any further acceptance conditions.
Worked example: A participant pays after a stated lapse date. The agent checks restoration acceptance and its effective date before assuring the participant that protection has resumed.
Mistake to avoid: Treating a bank payment as automatic reinstatement of coverage.
Source reference: AASI current code of ethics for sharia insurance marketers
54. Delivering policies and recording receipt
When entrusted with participant documents, the AASI code requires prompt delivery, obtaining a receipt, and returning that receipt to the company. If delivery fails, the marketer must promptly explain the failure and return the documents. Delivery records establish what happened; they should not falsely imply that the participant received or reviewed a policy.
Worked example: A participant has moved and cannot be reached. The agent reports the failed delivery and returns the policy instead of signing a receipt on the participant's behalf.
Mistake to avoid: Recording successful delivery merely because a document was dispatched.
Source reference: AASI current code of ethics for sharia insurance marketers
55. Beneficiary instructions and legitimate interests
Beneficiary instructions need clear identifying information and processing under the product's actual rules. A customer's spoken intention does not itself establish an effective change. The AASI code also prohibits an agent becoming a participant's beneficiary unless an insurable-interest relationship exists. That exception does not remove the need to examine applicable contract conditions and conflicts.
Worked example: A participant verbally names a different recipient. The agent initiates the authorized change process rather than promising the conversation has already changed entitlement.
Mistake to avoid: Treating an informal instruction as a completed beneficiary amendment.
Source reference: AASI current code of ethics for sharia insurance marketers
56. Building a claim event timeline
A claim timeline connects relevant commencement dates, benefit waiting periods, contribution status, alterations, the event, and notification. Each date answers a different question. Apply the contract to the appropriate event and status rather than substituting the date the agent learned about the loss. Keep unresolved dates visible for the authorized claims team.
Worked example: A loss occurs on 10 June and is reported on 18 June. The agent records both dates because event eligibility and notification requirements are separate questions.
Mistake to avoid: Using the reporting date as the date of loss.
Source reference: AASI current code of ethics for sharia insurance marketers
57. Claim evidence serves different purposes
Claims documentation should establish the covered event, relevant loss or benefit conditions, and the claimant's entitlement. These are separate evidential tasks. Request documents using the company's actual checklist and explain what is missing precisely. A complete identity record does not prove the event, and event evidence does not establish who should receive payment.
Worked example: A death record supports occurrence of the event, while claimant identification and beneficiary records address entitlement. The agent identifies the missing beneficiary record rather than saying all evidence is inadequate.
Mistake to avoid: Assuming one official document proves every element of a claim.
Source reference: AASI current code of ethics for sharia insurance marketers
58. Claim discrepancies and decision authority
An inconsistency warrants focused clarification, not an immediate accusation or payment promise. Preserve the relevant documents, identify the conflict, and refer it to the authorized claims function. The agent can support communication and evidence collection but should not invent a rejection, waive a condition, or diagnose fraud without an established basis.
Worked example: Two records show different event dates. The agent submits both and requests clarification instead of altering one to make the file appear consistent.
Mistake to avoid: Correcting claim evidence without a traceable authorized basis.
Source reference: AASI current code of ethics for sharia insurance marketers
59. Complaints and the correct review route
A complaint identifies dissatisfaction; a dispute may involve a contested decision requiring a further review route. Record the issue, the requested resolution, and relevant evidence, then use the company's current process. AASI's stated mediation role concerns disputes among its members and should not automatically be described as the participant's claims appeal mechanism.
Worked example: A participant challenges an exclusion decision. The agent records the wording and requested review, then confirms the appropriate complaint and escalation channels.
Mistake to avoid: Promising access to a dispute forum without checking its jurisdiction.
Source reference: AASI current code of ethics for sharia insurance marketers; AASI - Asosiasi Asuransi Syariah Indonesia
60. Conduct reports, audit records, and consequences
The AASI code requires reporting known marketer violations to the represented company and reasonable cooperation with investigations or audits. Preserve factual records and use authorized channels. The code describes possible warnings, suspension, agency termination, and certification-related sanctions; the applicable decision belongs to the authorized body rather than the reporting agent.
Worked example: An agent discovers altered illustrations in a shared sales file. They preserve the originals and report the facts without declaring what sanction the colleague will receive.
Mistake to avoid: Deleting evidence after a customer complaint has been resolved.
Source reference: AASI current code of ethics for sharia insurance marketers
Sources
Credential identity and source support:
- AASI current code of ethics for sharia insurance marketers
- AASI - Asosiasi Asuransi Syariah Indonesia