Takaful (an Arabic word meaning guaranteeing each other) is a shariah compliance mutual risk transfer arrangement which involves participants and operators. Shariah is based on the Qur’an and Assunah. Takaful as a concept that some extent is similar to conventional mutual risk sharing such as Mutual Insurance and Protection and Indemnity Club ( P and I Club ). It is a mutual sharing of risk based on the concept of Taawun (Mutual Protection).The 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. In risk assessment (underwriting) and handling, Takaful do not allow what is called Gharar (uncertainty or speculation) and Maisir (i.e. gambling). In investment or fund management Riba (i.e. usury) is also not allowed.