The Takaful Islamic Insurance Company

Q: The Takaful Islamic Insurance Company affiliated with Dar Al-Mal Al-Islami (DMI) submitted a proposal to the employees of the Muslim World League. Some Muslim brothers in the league refrained from subscribing lest this should be invalid and requested to know your Eminence's opinion on the permissibility of this (Part No. 15; Page No. 275) subscription in light of the text stated in the company's proposal. The Islamic Arab Insurance Company (IAIC) has also submitted a proposal for car accident insurance. We hope that your Eminence would be kind enough to clarify the Shari`ah's (Islamic law) viewpoint on participation in the offer of the first company (copy of the offer attached) and the participation in the second offer (copy of this offer also attached), in light of the detailed description of both offers.

A: The insurance offer mentioned in the attached data with the letter of his Excellency the Secretary General is a commercial insurance that is prohibited by Shari`ah (Islamic Law). Unlike cooperative insurance, it does not aim at realizing profit; rather it is intended to remove harm from others, but this form is not the type mentioned in this offer. For additional benefit, we bring forward the text of the two decrees issued by the Council of Senior Scholars regarding commercial and cooperative insurance: Decree No. 55 dated 04/04/1397 A.H Praise be to Allah, Alone. Peace and blessings be upon the Last Prophet, his family, and Companions, and whoever follows his path till the Day of Judgment. In the light of the letter of His Majesty King Faysal ibn `Abdul-Aziz (Part No. 15; Page No. 276) Al Sa`ud (may Allah be merciful to him) no. 22310, dated 4/11/91 A.H addressed to his Honor Chairman of the Departments of Scholarly Research and Ifta', requesting that the Council of Senior Scholars study the insurance issue. Accordingly, it was decided to include it in the agenda of the fourth session.