Free Website Hosting Vs. Paid Website Hosting Basics

Web site hosting service companies on the Internet permit the user to make their web site accessible through the World Wide Web. There are huge numbers of companies that offer web space on their server for their customers and also offer Internet connectivity in general in a data center. There can be various types of web site hosting companies. The main classification is the free web site hosting and the paid web site hosting service companies.



In case of free web site hosting, the user has the right to upload his or her web site content on the server space that is provided by the web site hosting company without any cost. This type of web site hosting service is great for people who are new to to internet and plan to get familiar with web site creation and functionality of web servers. On the other hand, to get your web site uploaded on a web space that is provided by a paid web site hosting company, you need to pay the company periodic fees. The fee amount may vary from company to company. The paid web site hosting companies are best suited for professional web site owners. People who need large web space to upload their web sites and who expect a certain amount of web site visitors which is restricted on free hosting accounts to a minimum.

The revenue that the paid web hosting service companies get is through the fee that is paid to the company by the web site owners. In case of free web site hosting companies, the main source of income are the ads and banners that can be placed on their clients web pages.

The main advantage of using a free web site hosting service is that they are free of cost and hence make a perfect choice for people who are new into the business and are just looking to start out. They are perfect for people who just want to display a minimum content on the World Wide Web in small amount of web space. The other advantage of using the free web site hosting service is that most of these companies provide integrated, easy tools to upload the pages on to the hosting account. They do this realizing the fact that the free web site hosting services are generally utilized by the newbies.

There are also certain disadvantages of using the free web site hosting services. When using the free web site hosting service, you are forced to place the ads and banners by the web site hosting company on your web pages. Also the revenue that is obtained by the ads goes to the web site company. In case of paid web site hosting service, ads and banners placed on your web site are according to your will and the revenue of the banners and ads placed on your web site goes in your pocket. Also in some case of free web site hosting, the domain name of your web site starts with the web site hosting company name followed by your web site name. This is not the case of paid web site hosting service. You get a unique web site domain. The web space provided by free web site hosting service is limited whereas in case of paid web site hosting service you can buy the web space according to your requirements.

About The Author:
Roger McLean is marketing executive of http://www.mojoscripts.com. Copyright 2007 by Tela IT Inc. The article may be reproduced in newsletters or on websites provided that the complete article text is included, unchanged, and that neither the copyright declaration nor this license are removed.

Implementing SEO on Your Website

One thing that is the same for everyone with a website is the desire to get as many visitors as possible. Quality content is of course the single most important criteria for great success but there are a couple tips and tricks you can take advantage of in order to climb a couple of steps on the rankings of the search engines. In implementing Search Engine Optimization to the overall plan when creating your website you will boost the possibilities of getting found. There is nothing wrong with giving your website a little extra boost.
The oh so important Title tag

Let us begin with having a look at the title. Sounds easy to come up with a great title, does it not? Well, it is trickier than one might think as you should try to write a title that is both appealing for your visitors as well as for the search spiders. For the latter is the title one of the most important things when crawling a website. Begin with creating a list of your most important keywords as these will be the words that people search for when eventually finding your site. When this is done you should use one or two of these keywords in your headline as well as making it a relevant title. A big no-no is writing things such as witty jokes. At least if you are to take the search spiders into consideration as they are nothing but machines and will not understand the joke.
Do not forget about the subheads

Even though we just said that the titles are of the essence from a SEO point of view you should not forget about the sub-heads. Subheads are good from two aspects – they can change the direction of your text (avoiding huge blocks of text) and they are, just as the title, a great place to put a keyword. Let us take the subhead for this paragraph for example; it is optimized for the keyword “subheads”. When working with HTML the main title will an H1 which is followed by subheads H2, H3, H4 and H5. In making both the main title and the subheads bold they will easier to read for search spiders as well as for your visitors.
The URL Should be Optimized

The URL is also an important place to put one of your keywords. Try to find a domain name that includes one of your most important keywords and you are off to a great start. Many of the best domains will already be taken but if get creative we are sure that you will find a domain name that is more than satisfying.
Keywords are always necessary

It is not only important to use keywords in the titles, subheads and URLs – they should be used throughout the entire text. With this said, it is important to not stuff the text with keywords, it should be done naturally. Finding out what keywords that are more important than other can easily be done with the help of for example Google Adwords Keyword Tool. Google Adwords Keywords Suggestions is a great tool that will present you with the number of searches for a certain keyword as well as what kind of competition there is for this word. If you wish you can also enter your URL (or the URL of a similar website) and you will get a list of keywords that are related to the content of the website. Simply said is the Google Adwords tool a great little thing that can save you a ton of work.
Remove all useless code

Once your site is up and running you should go through everything one more time and remove useless code that is just lying around doing no good. All codes are constantly going through changes which mean that you have to update your code from time to time. Old and redundant code will only slow down the search engines and in worst case scenario they will not even bother listing your site on the place that it deserves to be.
Image Alt attributes

It is a given fact that people love looking at images but the same does not go for the search engines which is the reason to why you should add “Alt” attributes to them. In doing so you will describe what the image is about and hence you will be able to gain traffic via for example Google images. Adding an Alt tag is very easy to and it can look something like this:


Work on the Meta descriptions

Think about it, the short description you see on the search results can be a converting success or a real disaster, making it just as important as the title. In writing a good Meta description you will be able to persuade people that your site is worth checking up. There are a couple of guidelines that you should follow when writing this description and they are as follows. The length of the description should be between 25 and 40 words. Make sure that the descriptions include all of the targeted keywords that are unique for each of the pages. It is usually said that Meta descriptions should be written with a “marketing style” but we think that “informative” is a better word.
Avoid using Flash

Flash sites might look cool but they are really bad from a SEO perspective. While the software is qualitative and popular it does not attract the Google and Yahoo search engines. It is possible to add elements of SEO to a flash site but it can be pretty difficult and hiring people to do it for you can be rather expensive. So, if you think that you will attract most of your visitors via the search engines, try to stay away from Flash.
Do however use “No Archive” and “No Index” tags

A website contains a lot of content and not everything needs to be indexed. Such things, that do not have be get indexed, are the about page, privacy policy pages and contact information pages. In using the appropriate codes they will not be indexed, speeding up the indexing process, and get you higher up in the search engine results.
If you are working with blogs

Blogs are no exception – if you run a blog, make sure that it is optimized for the web. Most blog platforms are good for driving traffic and one of the best tips we can give you is sticking to only one platform and make sure that it is updated on a regular basis. The longer you have been using a blog platform the better your chances will be of it climbing the steps on the search engine results. Other than this do the same rules as for regular websites apply for blogs. Try to write compelling content and include keywords in titles, subheads and in the text itself. If you are using WordPress we can recommend you downloading the “All in One SEO Pack”, a plugin that is great for everyone that wish to boost their possibilities of optimizing their blog and consequently getting a larger number of visitors.

Need web hosting ? Compare before you buy

The internet is one of the most important tools in the modern times. What started off as simply a mode of transfer of data is today used for a wide variety of purposes. Today, it plays a very important role in commerce and finance, all across the globe. These days, a large number of products are sold over the net. So, you will find products ranging from safety pins to cars and nails to large factories on sale on the internet. It is perhaps due to this ever growing popularity, that a large number of firms, enter the arena of internet marketing.

As a result of this, more and more websites are coming up each day. As a matter of fact, it does not seem to be a distant reality, that some day, every person would be having a separate website of his or her own. In order to cater to this growing demand for websites, web hosting services have come up as an effective tool. In recent times, a number of portals have come up, which offer web hosting services. These websites offer various web hosting plans that you can choose from, depending upon your requirements. However, one of the most important aspects in this regard, is to select the appropriate web hosting service. It gets typically difficult, to select an appropriate service which can help you achieve your objective.

Web Hosting Geeks can be of great help in this regard, in case you are facing such a dilemma. This particular site, offers you reviews of the various sites, which offer web hosting services, dedicated server hosting and other products. This would help you in analyzing the various plans that are being offered to you and eventually in the selection of the appropriate plan, which suits your requirements. This site provides you with unbiased and independent reviews of web hosting providers, which provide the best in terms of price and value. It provides a view of economical web hosting services with a fee structure of $10 a month. Also, all the web hosting plans offer at least one free domain name registration, as well as thirty days money back guarantee. So, now, you can have a review of the web hosts.

Dedicated servers offer a number of advantages for your business. Irrespective of whether you are running an ecommerce web site or you are looking for extra security, dedicated servers play a very vital role. In this regard, this website also can provide you with adequate assistance.

You can also opt for green hosting services and contribute towards environmental cause. Green web hosts are those, which make use of renewable sources of energy, for running their datacenters.

Forex Trading - 3 Power Strategies

3 Rules to Make serious earnings

If you want to catch the serious profit in forex dealing you need to trend watch forex trends which are worse term. here we are going to give you a 3 step simple method which if you use it correctly, will help you catch every superior forex trend and lead you to long-term term currency dealing success.

Most beginner traders don't bother trying to trend following forex lengthier term - instead they try forex scalping or day trading. These methods focus the trader on small moves and they hope to catch small profit however as most short term moves are random, this leads to equity eliminate.

The other alternatives are swing trading and long term forex trend following and this article is all about the latter method. If you look at any forex chart, you will see long-term term trends that last for months or years. These moves can and do yield serious profit - present we will outline a simple method to get them.

Breakouts

By far the best way of catching the serious moves is to use a forex dealing strategy based around breakouts. A breakout is simply a move on a forex chart where a new high or low is made and resistance or support is broken.

It's a fact that most leading moves start from new highs or lows.

While it might appear that you are not buying or selling at the greatest level, you are in terms of the odds of the trend continuing. Most forex traders make the mistake of waiting for the breakout to come back and get in at a better price but these traders never get on board. The grounds for this is if a breakout occurs, then you have a new strong trend and a pullback is not very likely to occur.

Most traders don't buy or sell breakouts and that's exactly why it's such a powerful method.

The only point to keep in mind is a support or resistance which is ruined, should be valid and that means at least 3 points in at least 2 different times frames. The more tests and the greater the spacing between the tests the more valid the level is.

Confirmation

Of course not every breakout keeps and some reverse, these are false and can cause losses. You therefore need to confirm each move. All you need to do to achieve this is to put a few momentum indicators in your forex trading system to confirm your dealing signal.

These indicators give you an estimation of the strength and velocity of price and there are many to choose from. We don't have time to discuss them here (simply look up our other articles) but two of the greatest are - the stochastic and Relative Strength Index RSI

Stops and Targets

Stop points are easy with breakouts - Simply behind the breakout point.

If you have a serious trend then you need to be careful you can milk it, so don't move your stop to soon and keep it outside of normal volatility. If it is a huge move, trailing stops should be held a long-term way back and the 40 day moving average is a good level to use.

You have to keep in mind that when the trend does eventually turn you are going to give some profit back. You don't know when the trend is going to end, so don't predict.

It's ok to give a serious back, as that's the nature of trading forex. Keep in mind if you got 50% of all leading trend you would be very rich. When you are long-term term trend following you have accept giving a bit back and taking dips in open equity as the trend develops - this is noise and does not affect the long term trend.

The above is a simple way to trend watch forex and catch the high odds moves that yield the serious profit. If you are learning forex dealing and want a simple method that is robust and will help you get every major move, then you should base your dealing on the above method.

Now that you have all the winning strategies, you now need to have a winning broker, recently the

Online Trading, an Option for Transnational Trade

Global deal is exchange of capital, trade goods, and services across transnational frames or territories. In the most of nations, it acts a significant percentage of gross domestic product (GDP). While transnational switch has been represented throughout lots of history (see Silk Road, Amber Road) the economic, cultural, and policy-making importance has been along the rise in last centuries. Industrialization, manufacturers, advanced transportation, globalization, international corporations, and outsourcing are completely having a major affect on the global trade scheme.

Trading globally makes consumers and nations the chance to be exposed to trade goods and services that are not available in their personal nations. Almost each form of product can be seen on the transnational market: food, dress, spare parts, oil, jewellery, wine, stocks, currencies and water. Services are as well traded: tourism, banking, consulting and transportation. A product that is sold to the transnational market is an export, and a product that is bought from the transnational market is an import. Exports and Imports are calculated for in a country's ongoing account in the balance of payments.

According to the U.S. Department of Commerce, big companies gain up approximately 4 % of U.S. Exports which signifies that 96% of exporters are small companies. Why is transnational trade so crucial to scratch small businesses? In several cases, the products or services you may care to market are not accessible or created in your domicile area. For good example, consider about selling cashmere sweaters. You may need to turn an importer in order to compete with imported products sold by your competitors.

Online business can frequently start trading internationally with very little effort. The internet has transformed things. Your site can be your shop window in some number of nations. You don't require a physical front in each territory to deal there.

A Study by Georgios Papastamkos, MEP on Worldwide Trade on the cyberspace emphasised that the online circumstances for small and medium-size enterprises are especially good since they give more opportunities to get across conventional commercial schemes rather than they had even a . Enterprises are effective to prepare their internet sale points easily, rapidly and at small cost, thereby reaching a higher stage of competitiveness.

If your business is running in a niche, with a relatively smaller internal market, looking to another nations can help you widen your audience with surprisingly little effort. And if your trade goods or services appeal to a larger audience, moving into outside marketplaces gives you the chance to reach a wide number of potency recent clients. It could actually rise your receipts and profits.

Still, in a bigger market there will be more competitor from local companies. It can be heavy to equal up on price or fulfilment when sending internationally, so you might let to modify your proposition to have an touch.

It's not only for producer but for consumers are also receiving profits by online trading,. Since they enjoy a very large option between commodities and services, competitive pricing, lower living costs and a improve excellent of life, they as well don't require to go out to surf all products and services even from wholesale suppliers. They are now better able to compare merchandises and services since they gain access more data on online trading.

Intro To Forex Options

Forex options trading can be a great alternative to trading in the spot fx market. It is often used to head physical currency positions. We have created a comprehensive guide to forex options in addition to the basic information listed below.

Types of Forex Options

1. Traditional American Option: It can be used at any point until the expiration date
2. Traditional European Option: It can only be used at the point of expiration
3. Forex Spot Option: SPOT options are very similar to traditional options. The main difference is that the forex trader will first give a scenario (UER/USD will break 1.4000 in 2 weeks). The trader pays a premium, and then receives cash if his scenario occurs. SPOT trading also converts the option to cash automatically if your trade is successful.

Determining an Options Price

An option premium is determined by several factors including:

1. Time Value: In general, the longer the time period of the option, the higher the price you have to pay as time value shows the uncertainty of market movements
2. Interest Rate Differential: A change in the interest rates has an impact on the relationship between the strike price and the current market value.
3. Volatility: High volatility increases the probability that the market price will hit the strike price in a certain timeframe. Usually, the more volatile the currency, the higher the premium will be.

For more details about forex options, please visit our comprehensive guide. And remember, trading currency options offers a great alternative to or addition to trading currency in the spot market

8 FOREX TRADING MISTAKES THAT COULD RESULT TO MARGIN CALL

1 IGNORANT OF NEWS EVENTS
Most ignorant technical traders often have there trading account badly damaged if not wiped out during news event releases. I therefore recommend that you get familiar with economic calendars even if you do not like trading them.

2 OVER TRADING.
Most ignorant traders often over trade in any of the following ways: opening more positions than they should, not knowing when they have exceeded there trading limits. I recommend trading only one position at a time as a beginner.


3 NO TRADING SYSTEM
One of the worst things that can happen to a trader is to chase after pips or dollars without a proven system. To succeed in trading you need a proven and tested decent trading system.

4 NO TRADING PLAN
A plan gives you the road map to your destination. When you have no plan, you will surely not know when you miss the way.

5 NOT KNOWING WHERE TO PLACE STOP LOSS ORDER And have high probability for profits
It is one thing to place stop loss orders, it is another thing to know where to place them in order to avoid being stopped out before price resumes in your analyzed irend and entry direction.

6 NOT KNOWING HOW TO MONITOR MARGIN ACCOUNT.
If you do not know when your account is running into margin call, certainly you will not know when to cut your losses..

7 NOT KNOWING HOW TO IDENTIFY A TREND AND RIDE WITH IT.
You trading system should be able to identify new market trends and , trend corrections and trend reversal.

8 ALLOWING MAXIMUM DRAW DOWN ON AN ACCOUNT
When your account is drawn down by say 50% in one trade, you should know that it will not take you a profit of 50% to return to your previous balance. It will rather take you 100% profit in your remaining balance before the account was drawn down.
The above 8 mistakes put together can result in a margin call.

Send a blank e mail to wealthklub@yahoo.com to Get a free report on a powerful forex trading system that generates an average of 500 pips($5000 on a standard account) monthly plus how $5100 was turned to $40,000 without lifting a finger

Techniques for Advanced Forex Trading

Forex is a potential platform for earning substantial profit. In fact it is one of the largest trading markets of the world. Featuring an average daily trade of US$ 2 trillion and above, this market is best known for its high scale trading volume and intense liquidity. Adding to this, today with the advancement of technology it can be done from anywhere of the world. Backed up by world-wide web, you can easily trade in the forex market at the comfort of your own home. However, it is important to understand that fx trading is based hugely on speculation. You must be smart enough to guess exactly when the rate of a certain currency pair will rise and go down, and then buy or sell based on that. Indeed it is said that if you learn to study the speculation of this market, you will have a better chance of getting profit.

Today, it is more advanced and turned into an active investment arena, where only a factual understanding of the intricacies and complexities can make your capital grow every day. Moreover, like any other business, it also involves some amount of risks. There is no shot fx trading technique for success in the currency trading market, but there are some well-known techniques that can assist you formulate a good advanced foreign exchange trading strategy. Here are few essential techniques that can help you cut your losses and increases profits:

Forex Scalping: It is a latest technique of trading where profits are taken after relatively small moves in the forex market. It is a technique where trading is done over small time frames, and smaller profits are taken more frequently. As the position exposed to the market is shorter, it automatically reduces the risk of adverse market events causing the price to go against the trade. It is a different approach to most other forex strategies, but still requires you to analyze the market to ensure that the set up for a trade is present. This type of trading greatly appeals to day traders and those who look to reduce the risk involved in trading currencies.

Forex Hedging: It is a technique that helps in reducing some of the risk involved in holding an open forex position. It decreases the risk by taking both sides of a trade at once. If your broker allows it, a simple way to hedge is just to initiate a long and a short position on the same pair. Advanced traders sometimes use two different pairs to make one hedge, but that can get very complicated.

It is important to understand that much of the risk involved in holding any forex position is market risk; i.e. if the market falls sharply, your losses may escalate dramatically. So if you have an open Forex position with fine projection but you think the currency pair may reverse against you, it is advised to hedge your position.

Forex Position Trading: Forex position trading approach is yet another trouble-free technique to boost your position size without increasing your risk. This trading tactic is very effective with mini lots. The major highlight with this technique is that - with forex position trading your exposure to the market is less and so therefore is no need to monitor the market continuously. Moreover, you may even earn profit with negligible loss that can further boost your trading confidence. For Example- you might make a short trade on EUR/USD at 1.40. If the pair is ultimately trending lower, but happens to retrace up, and you take another short at say 1.42, your average position would be 1.41. Once the EUR/USD drops back below 1.41, you will be back in overall profit.

Today forex trading is all about watching your options when you make a trade. Aside from using effective risk management and extreme vigilance, advanced trading can be an alternate way to make profits and control losses. Nevertheless, these above mentioned advanced trading techniques are more about using the market behavior to your advantage. Utilizing these advanced techniques can give you the edge from other average trader.

The Foreign Exchange Market Differs From The Stock Market

The alien interchange market is likewise known as the FX market, and the forex market. Syndication that takes place amongst two regions with dissimilar currencies is the basis for the fx market and the background of the Syndication in this market. The forex market is over thirty years old, traditionalistic in the early 1970's. The forex market is one that is not grounded on any one business or laying out money in any one business, but the retail and retail of currencies.

The divergence amongst the stock market and the forex market is the tremendous retail that occurs on the forex market. There is millions and millions that are traded daily on the forex market, almost two trillion dollars is traded daily. There is is much higher than the cash traded on the daily stock market of any country. The forex market is one that involves governments, banks, financial foundations and those similar types of foundations from other countries. The

What is traded, purchased and sold on the forex market is a thing that can easily be liquidated, meaning it can be turned back to cash fast, or often times it is really going to be cash. From one currency to another, the accessibility of cash in the forex market is a thing that can take place fast for any investor from any country.

The divergence amongst the stock market and the forex market is that the forex market is worldwide, worldwide. The stock market is a thing that takes place only within a country. The stock market is grounded on businesses and products that are within a country, and the forex market takes that a step farther to include any country.

The stock market has set business hours. In general, this is going to follow the business day, and will be closed on banking holidays and weekends. The forex market is one that is open in general twenty four hours a day because the tremendous number of countries that have part in forex retail, buying and retail are located in galore dissimilar times zones. As one market is opening, another countries market is closing. This is the continual method of how the forex market retail occurs.

The stock market in any country is going to be grounded on only that countries currency, say as an illustration the Japanese yen, and the Japanese stock market, or the United States stock market and the dollar. However, in the forex market, you're involved with galore types of countries, and galore currencies. You will find references to a variety of currencies, and this is a big divergence amongst the stock market and the forex market.

Why Trade Forex

* Take control of your own finances.Beat the returns from mutual funds, hedge funds or managed funds.

* Start-up costs are low when compared with day trading stocks or futures.

* Forex is the world’s largest market. No one can corner the market.

* With a trading volume of around $3.2 trillion dollars a day( Bank for International Settlements April 2007), no single entity can control the market for an extended period of time.

* You can make money when the market is going up or down.

* Forex markets trade 24 hours a day. There is no waiting for the opening bell.

* Technical analysis works very well and the market trends well.

* Forex offers up to 100:1 leverage but it is wise avoid very high leverage if you can afford it. Stocks offer 1:1 or 2:1.Futures offers 15:1 leverage.

* The forex market is the most liquid in the world. Traders can almost always open or close a position at a fair price.

* You can make money working only a few hours a day or week on your computer.

* You can trade from anywhere in the world where there is an internet connection.

* You can gain experience without risking your own money by using a free demo account.

* When trading stocks, there are over 40,000 stocks to choose from. In forex, you can choose one or two currency pairs and focus your analysis.

Links to Other Sites

Accounting & Auditing Organization for Islamic Financial Institutions www.aaoifi.com
	Dow Jones Islamic Market Index www.djindexes.com
	Financial Services Authority, UK www.fsa.gov.uk
	Harvard Islamic Finance Information Program www.hifip.harvard.edu
	Islamic Development Bank www.isdb.org
	Dr. Iraj Toutounchian is a Professor of Economics at the Az-Zehra University, Tehran, Iran. He has written several books on Islamic Banking. His latest publication "Comparative Money and Banking in Capitalistic and Islamic Systems", received "The Economic Book of the Year" award in Iran. www.toutounchian.com
	Islamic Financial Serivces Board www.ifsb.org
	International Cooperative and Mutual Insurance Federation Takaful (ICMIF Takaful) www.icmif.org
	Islamic International Rating Agency (IIRA) www.iirating.com
	Liqidity Management Centre www.lmcbahrain.com
	Central Bank of Bahrain www.cbb.gov.bh
	State Bank of Pakistan www.sbp.org.pk
	Bank Negara Malaysia www.bnm.gov.my
	Bank of Sudan www.cbos.gov.sd
	Central Bank of the Islamic Republic of Iran www.cbi.ir

Status of Takaful

As Islamic finance continues to expand, there is likely to be a huge takeoff of other products such as pensions, education, marriage and health Takaful plans. There is also a huge scope for mortgage Takaful.

Islamic principles strong emphasis in Takaful on the economic, ethical, moral and social dimensions, to enhance equality and fairness for the good of society as a whole should also have appeal for the ethically minded.

Shari'ah Supervisory Board [Religious Board]

The role of Shari’ah Supervisory Board members is to review the takaful / retakaful operations, supervise its development of Islamic insurance products, and determine the Shari’ah compliance of these products and the investments. The Shari’ah Supervisory Board have to carry their own independent audit and certify that nothing relating to any of the operations involve any element that is prohibited by Shari’ah.

Islamic financial institutions must adhere to the best practices of corporate governance however they have one extra layer of supervision in the form of religious boards. The religious boards have both supervisory and consultative functions. Since the Shari’h scholars on the religious boards carry great responsibility, it is important that only high calibre scholars are appointed to the religious boards.

An Islamic financial institution is required to establish operating procedures to ensure that no form of investment or business activity is undertaken that has not been approved in advance by the religious board. The management is also required to periodically report and certify to the religious board that the actual investments and business activities undertaken by the institution conform to forms previously approved by the religious board.

Islamic financial institutions that offer products and services conforming to Islamic principles must, therefore, be governed by a religious board that act as an independent Shari’ah Supervisory Board comprising of at least three Shari’ah scholars with specialised knowledge of the Islamic laws for transacting, fiqh al mu`amalat, in addition to knowledge of modern business, finance and economics.

They are responsible primarily to give approval that banking and other financial products and services offered comply with the Shari’ah and subsequent verification that of the operations and activities of the financial institutions have complied with the Shari’ah principles (a form of post Shari’ah audit). The Shari’ah Supervisory Board is required to issue independently a certificate of Shari’ah compliance.

The day-to-day application of Shari’ah by the Shari’ah Supervisory Boards is two-fold. First, in the increasingly complex and sophisticated world of modern finance they endeavours to answer the question on whether or not proposals for new transactions or products conform to the Shari’ah. Second, they act to a large extent in an investigatory role in reviewing the operations of the financial institution to ensure that they comply with the Shari’ah.

The concept of collective decision-making, in other words, decisions made by more than one scholar, is especially important. Shari’ah Supervisory Boards function is to ensure that decisions are not unilateral, and that difficult issues of finance receive adequate consideration by a number of qualified people.

Shaikh Yusuf Talal DeLorenzo, Islamic scholar, position is that unless a financial product or service can be certified as Shari’ah compliant by a competent Shari’ah supervisory board, that product's authenticity is dubious. At that point, it will be the responsibility of the individual investor or consumer to determine on his or her own that the product complies with the principles and precepts of the Shari’ah.

Shari'ah Authenticity

Shaikh Yusuf Talal DeLorenzo, Islamic scholar, position is that unless a financial product or service can be certified as Shari’ah compliant by a competent Shari’ah supervisory board, that product's authenticity is dubious. At that point, it will be the responsibility of the individual investor or consumer to determine on his or her own that the product complies with the principles and precepts of the Shari’ah.

Retakaful or Reinsurance

Frequently, the scale of insurance risks underwritten is too great for one insurer to carry safely. In these circumstances, companies use reinsurance to mitigate their own risk exposure. When insurers insure a risk again with another company, it is called reinsurance which allows the insurance industry to spread its losses, lessening the impact of claims on any one company.

There is currently a shortage of retakaful capacity and the lack of companies in the market presents a challenge as well as an opportunity. The challenge is to have a large enough Takaful market to justify ReTakaful business. There is also a global need for strong and credible retakaful operators to assist the growth and expansion of takaful business. Shari’ah scholars have allowed takaful operators to reinsure conventionally when no retakaful alternative is available, although retakaful is strongly preferred.

However, this conventional reinsurance represents a dilemma, as it is contrary to the customer’s preference of seeking cover on Islamic principles. Structurally retakaful operating principles are similar to the takaful operating principles, and the same Shari’ah principles apply.

Pricing Transactions linked to Interest-rate Benchmark

There are continuing debates on whether the spirit of Shari`ah is being violated by the practice of "benchmarking" linked interest rate benchmark such as London Interbank Offered rate (LIBOR) plus an agreed mark-up in also pricing returns on Islamic finance transactions . At a very fundamental level, the reason for the debates is the lack of understanding to clearly discern the difference between the use of LIBOR as a benchmark for pricing and the use of non-Shari’ah compliant assets as a determinant for returns.

However, benchmarking touches upon the integrity of Islamic Finance as a whole, and the concept of Shari’ah-compliance vs Shari’ah-based approach in particular. There are practical challenges delaying a switch to participation-based structures, such as Musharakah and Mudarabah, that require financiers to participate in the underlying asset in a financing transaction.

How does Takaful Work

All participants (policyholders) agree to guarantee each other and, instead of paying premiums, they make contributions to a mutual fund, or pool. The pool of collected contributions creates the Takaful fund.

The amount of contribution that each participant makes is based on the type of cover they require, and on their personal circumstances. As in conventional insurance, the policy (Takaful Contract) specifies the nature of the risk and period of cover.

The Takaful fund is managed and administered on behalf of the participants by a Takaful Operator who charges an agreed fee to cover costs. These costs include the costs of sales and marketing, underwriting, and claims management.

Any claims made by participants are paid out of the Takaful fund and any remaining surpluses, after making provisions for likely cost of future claims and other reserves, belong to the participants in the fund, and not the Takaful Operator, and may be distributed to the participants in the form of cash dividends or distributions, alternatively in reduction in future contributions.

Why No to Conventional Insurance

In modern business, one of the ways to reduce the risk of loss due to misfortunes is through insurance. The concept of insurance where resources are pooled to help the needy does not necessarily contradict Islamic principles.
Three important differences distinguish conventional insurance from Takaful:

1. Conventional insurance involves the elements of excessive uncertainty (gharar) in the contract of insurance;
2. Gambling (maysir) as the consequences of the presence of excessive uncertainty that rely on future outcomes
3. Interest (riba) in the investment activities of the conventional insurance companies;
4. Conventional insurance companies are motivated by the desire for profit for the shareholders;
5. Conventional system of insurance can be subject to exploitation. For example, it is possible to charge high premium (especially in monopolistic situations) with the full benefit of such over-pricing going to the company.
   

The key difference between Takaful and conventional insurance rests in the way the risk is assessed and handled, as well as how the Takaful fund is managed. Further differences are also present in the relationship between the operator (under conventional insurance using the term: insurer) and the participants (under conventional it is the insured or the assured). Takaful business is also different from the conventional insurance in which the policyholders, rather than the shareholders, solely benefit from the profits generated from the Takaful and Investment assets.

Basis and Principles of Takaful

Islamic insurance requires each participant to contribute into a fund that is used to support one another with each participant contributing sufficient amounts to cover expected claims.

The underlying principles of Takaful may be summarised as follows:

* Policyholders co-operate among themselves for their common good.

* Every policyholder pays a part of the contribution as a donation to help those that need assistance.

* Losses are divided and liabilities spread according to the community pooling system.

* Uncertainty is eliminated in respect of subscription and compensation.

* It does not seek to derive advantage at the cost of others.

Theoretically, Takaful is perceived as cooperative insurance, where members contribute a certain sum of money to a common pool. The purpose of this system is not profits but to uphold the principle of "bear ye one another's burden."

Gambling and Insurance

ambling and insurance are two distinct and different operations. Gambling is speculative in its risk assessment whereas insurance is a pure risk and is non-speculative. In gambling, one may win or lose by creating that risk. In insurance, the risk is already there and one is trying to minimize the financial effects of that risk. Insurance shifts the impact of that risk to someone else and relieves the person of risk. The risk nevertheless still remains.

While gambling promotes dissension, ruin and hatred, insurance based on cooperative principles, enables the insured to lessen the financial impact without which it could drive the individual and his dependents to poverty, thereby weakening their place in the society. There is nothing in Islam that prevents individuals from making a provision for their dependents. Seen collectively for large groups of insured population, insurance strengthens the financial base of the society.

Islamic scholar, Yusuf Ali, in his translation of The Holy Qur’an, comments on Sura (chapter) Al-Baqara, ayat (verse) 219, "Insurance is not gambling, when conducted on business principles. Here the basis for calculation is statistics on a large scale, from which mere chance is eliminated. The insurers charge premium in proportion to the risks, exactly and scientifically calculated".

Islamic insurance

"Takaful" is an economic term, which is frequently used for a unique system of insurance or insuring activity that is quite different from the conventional insurance by some ways. It is based on the Islamic law of economics and works in such a marketing framework that follows strict rules fixed by Islamic Law and teachings and flexible regulations determined by various prominent insurance experts. It is also known as "Islamic Insurance" as well.

Before going to simplify the "Islamic Insurance", let first clarify that what is the meaning of insurance. The English word "insurance" means "a contract or an act of assuring by which persons or precious items, articles or valuable properties are guaranteed against a possible loss or damage by a contingent event in routine life.

In conventional insurance, there are many elements, activities and procedures are involved which are considered un-ethical, un-Islamic and un-lawful by the majority of Islamic scholars. Elements such as uncertainty (Al-Garar) in the contract, gambling (Al-Miasir) a consequence creates by the presence of uncertainty and excessive interest (Al-Riba) are the major culprits in the hindering of Muslim families, companies and organizations to take a shelter of insurance against the possible unseen misfortunes of the routine life. For the satisfaction of Muslim concerns, market experts and Islamic intellectuals introduced a new kid in the insurance block by the name of "Takaful"

What gives "Takaful" a priority over conventional insurance is its divine touch. "Takaful" is mainly based on the principles of "Shariah". Islam is a complete religion. It prohibits usury, the collection and payment of interest, trading in financial risk (gambling) and investing in such businesses that are against the general principles of ethics. In replacement of all such menaces, Islam presents many solutions through its law of economics and "Takaful" or Islamic Insurance is nothing but just an example of this practicable framework. The concept of insurance where resources are pooled to help the needy does not contradict Shariah in any way. The whole "Takaful" is based on this principal theme.

"Takaful" is a relatively new insurance trend which is not just gaining acceptance and popularity from the Muslim dominated countries and societies but also from the peoples of the developed world too. The Muslims, who are in search of Halal products and those non-Muslims but curious minds who want to taste a bit new insurance trend, are the major subscribers of this new insuring market.

By its nature, "Takaful" is more human friendly as compare to business friendly. Currently, the ratio of Islamic Insurance is not significant as compare to conventional insurance but its annual growth rate will definitely boost its market share in up-coming years. The future of "Takaful" is looks bright.

Prohibitions of Gharar, Maysir and Riba

Gharar: An insurance contract contains gharar because, when a claim is not made, one party (insurance company) may acquire all the profits (premium) gained whereas the other party (participant) may not obtain any profit whatsoever. Ibn Taimiyah, a leading Muslim scholar, further reasoned "Gharar found in the contract exists because one party acquired profit while the other party did not". The prohibition on gharar would require all investment gains and losses to eventually be apportioned in order to avoid excessive uncertainty with respect to a return on the policyholder's investment.

Maysir: Islamic scholars have stated that maysir (gambling) and gharar are inter-related. Where there are elements of gharar, elements of maysir is usually present. Maysir exists in an insurance contract when; the policy holder contributes a small amount of premium in the hope to gain a larger sum; the policy holder loses the money paid for the premium when the event that has been insured for does not occur; the company will be in deficit if the claims are higher that the amount contributed by the policy holders.

Riba: Conventional endowment insurance policies promising a contractually-guaranteed payment, hence offends the riba prohibition. The element of riba also exists in the profit of investments used for the payment of policyholders’ claims by the conventional insurance companies. This is because most of the insurance funds are invested by them in financial instruments such as bonds and stacks which may contain elements of Riba.

What is Takaful?

This concept has been practiced in various forms for over 1400 years. It originates from the Arabic word Kafalah, which means "guaranteeing each other" or "joint guarantee". The concept is in line with the principles of compensation and shared responsibilities among the community.

Takaful originated within the ancient Arab tribes as a pooled liability that obliged those who committed offences against members of a different tribe to pay compensation to the victims or their heirs. This principle later extended to many walks of life, including sea trade, in which participants contributed to a fund to cover anyone in a group who suffered mishaps on sea voyages.

In modern-day conventional insurance, the insurance vendor (the insurance company) sells policies and invests the proceeds for the profit of its shareholders, who are not necessarily policyholders. There is therefore a clear disjunction between policyholders and shareholders. Payouts to policyholders may vary depending on financial performance, but a minimum positive return is always contractually guaranteed.

Takaful is commonly referred to as Islamic insurance; this is due to the apparent similarity between the contract of kafalah (guarantee) and that of insurance.

However, takaful is founded on the cooperative principle and on the principle of separation between the funds and operations of shareholders, thus passing the ownership of the Takaful (Insurance) fund and operations to the policyholders. Muslim jurists conclude that insurance in Islam should be based on principles of mutuality and co-operation, encompassing the elements of shared responsibility, joint indemnity, common interest and solidarity.

In takaful, the policyholders are joint investors with the insurance vendor (the takaful operator), who acts as a mudarib – a manager or an entrepreneurial agent for the policyholders. The policyholders share in the investment pool's profits as well as its losses. A positive return on policies is not legally guaranteed, as any fixed profit guarantee would be akin to receiving interest and offend the prohibition against riba.

For some time conventional insurance was considered to be incompatible with the Shari’ah that prohibit excessive uncertainty in dealings and investment in interest-bearing assets; both are inherent factors in conventional insurance business.

However, takaful complies with the Shari’ah (which outlines the principles of compensation and shared responsibilities among the community) and has been approved by Muslim scholars. There is now general, health and family (life) takaful plans available for the Muslim communities.