 |
Prof. Dr.Masum Billah |
Shari'ah rulings on Insurance And Re-Insurance
The 1985 Islamic Fiqh Academy ruling
Resolution No. (9)
Compiled By:
Prof. Dr. Mohd. Ma’sum Billah
masum2001@yahoo.com
masum@applied-islamicfinance.com
+6019-3699542
The Islamic Fiqh Academy, emanating from the Organization of Islamic Conference, meeting in its Second Session in Jeddah, Kingdom of Saudi Arabia, from 10 to 16 Rabiul Thani, 1406 H (corresponding to 22-28 December 1985).
- And after reviewing the presentations made by the participating scholars during the Session on the subject of 'Insurance reinsurance'.
- And after discussing the same;
- And after closely examining all types and forms of insurances and deeply examining the basic principles upon which they are founded and their goal and objectives;
- And having looked into what has been issued by the Fiqh Academics and other institutions in this regard;
RESOLVES
- The Commercial Insurance Contract, with a fixed periodical premium, which is commonly used by commercial insurance companies, is a contract, which contains major element of risk, which voids the contract and, therefore, is prohibited (Haram) according to the Sharia.
- The alternative contract, which conforms, to the principles of Islamic dealings is the contract of co-operative insurance, which is founded on the basis of charity and co-operation. Similarly is the case of re-insurance based on the principles of co-operative insurance.
- The Academy invites the Muslim countries to work on establishing co-operative insurance institutions and co-operative entities for the re-insurance, in order to liberate the Islamic economy from the exploitation and violation of the system, which Allah has chosen for this Ummah.
Source : Taylor, Dawood - To be or not to be (Takaful), that is the question?
European Council for Fatwa and Research ruling