Takaful for the
good of all
Today insurance plays a very important role in commercial
and personal finance, but while most of us take insurance for granted, for
people of the Muslim faith conventional insurance is incompatible with their
religious beliefs. Under Islamic jurisprudence (Shari'ah), conventional
insurance is not permissible. Therefore an innovative concept, based on
solidarity, cooperation and mutuality which have been the keystones of Islamic
society from the days of the holy Prophet, began to develop in the early 70's in
Sudan, Middle East and Far-East Asia and it was called Takaful.
It is important to understand that Islam is not against the concept of insurance
but the basis of operation of conventional insurance, which does not meet the
requirement of Shari'ah. In fact, the concept of insurance which simply means
the pooling of common resources to help the needy is very much in line with the
teaching of Islam which propagates solidarity, mutual help and cooperation among
members of the community. The essence of insurance could be seen in the system
of mutual help in the Arab tribal custom of blood money or diyah.
Under this system, a victim or the injured party would be compensated by the
members of the community whose action had resulted in the loss of life or
impairment of the victim. Therefore the principle of compensation and group
responsibility was accepted by Islam and the holy Prophet. Muslim scholars have
acknowledged that the basis of shared responsibility is embedded in the system
of aqila as practiced by Muslims of Mecca (Muhajirin)
and Medina (Ansar), and laid the foundation of mutual
insurance.
It needs to be emphasized that the operational framework of conventional
insurance is against the tenets of Shari'ah, but not the basic concept of the
insurance. Takaful which means 'the act of a group of people
reciprocally guaranteeing each other' - is based on the concept of mutual
cooperative insurance. The Takaful framework is based on solidarity,
responsibility and brotherhood among members who agree to share the defined
losses to be paid out of defined assets. |
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| Fire, Property, Liability.. |
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