THE TELEGRAPH: More than 2m Muslims in Britain will now be able to arrange motor insurance without compromising their religious beliefs, according to Salaam Halal Insurance. Bradley Brandon-Cross, the chief executive of Salaam Insurance, says: "Conventional United Kingdom insurance options conflict with the core beliefs of the Muslim faith and, as a result, give Muslims living in the UK who wish to drive a car no choice but to go against their beliefs in order to follow the law, which requires motorists to have cover.
"The face of Britain is changing and it is the responsibility of British institutions to cater for such changes and welcome diversity."
In conventional insurance, the risk is entirely transferred from the policyholder to the insurance company upon payment of a premium, explained Brandon-Cross. He says: "In return for paying the premium, the policyholder gets peace of mind and in the event of a valid claim, the claim settled. This brings elements of uncertainty and, in the view of Muslims, gambling, into the contract as one of the two parties will make a loss, especially the policyholder if no claim occurs."
n Sudan in the 1970s, a concept called Takaful insurance was created to circumvent these problems. Takaful is an alternative form of cover which a Muslim can obtain against the risk of loss due to misfortunes and is a structure in which risk is shared between all policyholders.
Junaid Bhatti, director of independent Islamic finance consultancy Ballencrieff House, says: "So far, the only successful Takaful product in the UK has been Amanah’s home insurance offering, which is normally cross-promoted with the HSBC Islamic Mortgage product. It is great to see that the Government’s support for the industry has continued, and a fully sharia-compliant Takaful company has received authorisation."
Takaful provides its members with the same level of protection offered by conventional insurance, but it operates in a different way. This type of insurance allows participants to pay their contribution into a pool which is invested strictly in sharia-compliant investments and any investment profits are distributed back to the Takaful fund.
Takaful is an Arabic word meaning "guaranteeing each other" or joint guarantee. Theoretically, Takaful is perceived as co-operative insurance, where members contribute a certain sum of money to a common pool. The purpose of this system is not profits but to uphold the principle of "bear one another’s burden". The Car Insurance that Obeys Sharia Rules >>> By Kara Gammell | September 8, 2008
Cross-posted at: A New Dark Age Is Dawning >>>
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