TIMES ONLINE: Conventional insurance products are in conflict with Islamic beliefs for three reasons. Insurance involves an element of uncertainty, gambling and the charging of interest, which are prohibited by the Koran.
In Sudan in the 1970s, a concept called Takaful insurance was created to circumvent these problems. The policies of British Islamic Insurance Holdings (BIIH) will include a contract specifying the nature of the risk and the period covered that is clear to the participants. Every participant pays their contribution into the Takaful fund and the pool is invested in Sharia-compliant, non-interest-bearing investments to maximise the fund value.
Administration of the scheme, management of the contributions and other associated services are usually undertaken by an agent, appointed by the participants.
The agent is paid a fee that can be deducted from each contribution before it is placed in the fund, whose running costs and any insurance claims arising are met by it.
The agent is paid a fee that can be deducted from each contribution before it is placed in the fund, whose running costs and any insurance claims arising are met by it. Conventional insurance in conflict with Islam >>> By Angela Jameson: Analysis
TIMES ONLINE:
Capita announces first UK insurance firm to operate on Muslim principles By Angela Jameson
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