التكافل اإلسالمىIslamic Insurance

(Takaful)

Dr. Kamaru Salam YusofLecturer, FBMS, Unissa

Negara Brunei Darussalam

TOPIC 4DIFFERENCES BETWEEN TAKAFUL & INSURANCE

Faculty of Business & Management Sciences, UNISSA, Brunei Darussalam

point different 1

• Has elements of `IBADAH• Has element of TA`AWUN (Mutual Cooperation)• Has elements of TABARRU’ (Aim of Sincere

Donation)• No elements of RIBA’ (Interest Usury)• No elements of MAISIR (Gambling)• No elements of GHARAR (Uncertainty)• Sharing of investment Profit (Al-Mudharabah)• Distribution of net surplus on Hibah basis (Gift)*

Faculty of Business & Management Sciences, UNISSA, Brunei Darussalam

point different 2

not buying and selling, but an arrangement a group of individuals pay a fixed amount

and compensation for the losses of members.

Faculty of Business & Management Sciences, UNISSA, Brunei Darussalam

Fundamental differ

insurance• it contract• 2 parties• paying premium in return• guarantee pay compensation in case• probabilistic contract

Takaful• takaful operator not insurer• participant insurer each other• operator as administrator

– Managing– investing

Faculty of Business & Management Sciences, UNISSA, Brunei Darussalam

Points of differences - details

Faculty of Business & Management Sciences, UNISSA, Brunei Darussalam

diferences

Faculty of Business & Management Sciences, UNISSA, Brunei Darussalam

why takaful accepted?

1. co-operate on common good2. pay contribution to assist3. considered donation4. donation intended to divide losses5. element uncertanty eliminated - insofar

made clear6. not aim deriving advantage from others

Faculty of Business & Management Sciences, UNISSA, Brunei Darussalam

insurance ? It’s spirit?

• spirit ok except ?????

DISCUSSION

Faculty of Business & Management Sciences, UNISSA, Brunei Darussalam

2 words

Share & transfer

Faculty of Business & Management Sciences, UNISSA, Brunei Darussalam

Shariah Position on Insurance

• Three major groups.– Those who consider both the concept and

practice of commercial insurance un-Islamic.– Those who are in agreement with the present

insurance and find nothing wrong in it.– Those who accept the concept of insurance, but

find prohibited elements in its present practice.

Faculty of Business & Management Sciences, UNISSA, Brunei Darussalam

Rulings of Collective Fiqhi Bodies

1. Islamic Research Institute of Al-AzharUni: 19652. Council of Grand Ulamaof Saudi Arabia3. MajlisTahqiqat-e-Shari'yahLucknow, India 4. Islamic FiqhAcademy of Rabitaal-Aa'lam-e-Islami5. Al Majma’ Al-FiqhiAl-Islamiof OIC: 19756. Council of Islamic Ideology, Pakistan7. International conference on islamiceconomic 19768. European Council for Fatwa.

According to these Fiqhi bodies Conventional Insurance is unlawful because of involvement of prohibited elements

Faculty of Business & Management Sciences, UNISSA, Brunei Darussalam

Fatwa on Conventional Insurance

• In 1972 the Fatwa Committee declared the western concept of insurance was unlawful because of gharar, riba and maisir

• In 1982- a committee set up by the govt to study the implementation of takaful.

• Fiqh Academy of the Organization of Islamic Conference (OIC) at its gathering in Jeddah in December 1985 resolved that no form of insurance, be it life or general, had conformed to the Islamic principle Fuqaha.

Faculty of Business & Management Sciences, UNISSA, Brunei Darussalam

Fuqaha Views on Life Insurance

Opponents:-Sheikh Shaukat, Abu Zaharah and others.

Reason:-1. Insuring one’s life2. Betting3. Element of riba, maisir, gharar.4. Supersede the will of Allah5. Against the principle of mirath6. No direct authority to justify it.