Islam and Insurance [Archives:2000/08/Culture]

January 21 2000

Nageeb Baggash 
Little knowledge about insurance in the Arab countries creates misinterpretation of its meaning. This misinterpretation leads to some misunderstanding of its aims and benefits. Some Islamic religious figures have recently called for the idea of prohibiting of the system of insurance. 
A number of Islamic conferences were being held in Saudi Arabia and other Arab countries to discuss the issue. Most of these countries supported the idea of prohibition. Insurance system , however, is up till now operative in all Arab countries. The reason behind the rejection of the idea of prohibition is that there is no clear Quranic indicator against it. Indeed, there are some reasons that make the idea unreasonable and then unconvincing. 
Those who support the idea of prohibition have no evidence from  the Holy Quran or the Sunna. Their argument is that insurance is a foreign subject or system that is suitable for foreign societies only. Islamic societies are not in need of a system like it because the Islamic teachings cover all that is connected with human life. 
The idea of prohibition is not supported or declared by all Islamic figures. Islamic figures are divided into three groups. Some are with the legitimacy of insurance, some are of the opinion of its  prohibition while the remainder adopt a neutral stance. The group that follows the opinion of legitimacy of insurance says that the Islamic figures who follow the idea of prohibition know nothing about Islamic instructions. 
Some Islamic religious figures prohibited dealing with banks. They asked people to deal with the Islamic banks that were established for this aim. They say that dealing with the commercial banks is illegal because they pay interests. The idea of insurance prohibition is based on the same argument. Those who support the thought call for establishing insurance companies based on the Islamic teachings so both of the two groups do not exactly prevent the system of insurance companies that deal with people according to the Islamic principles. Their objective is the prohibition of the system of insurance as a whole. They do not distinguish between its various kinds and assess each in accordance with whether it is harmful or useful. Insurance is sorted into four main categories: Marine, Life, Property and Pecuniary. Each of these is subdivided into sections that may have one or more forms of policies. Each policy has its own provision and exclusions rather than the general condition and conditions used in all policies. So, the thought about prohibition must rely on good knowledge of the conditions of each and must also be restricted, if necessary, to the type which it is in contrast to our religious principles. 
Islam asks us to treat the subjects, that have no clear and direct Quranic teachings according to the general instructions stated in the holy Quran and the Prophets Sunna. General instructions state that humans should take everything that brings benefits and comfort for them and leave what may hurt them. Dealing with insurance proves that it offers many individual, collective and social benefits.  People can benefit from it much. In addition, insurance plays an important role in increasing the national revenue of any country, Thus, there is no reason to stand against it or prohibit it because it is useful and advantageous. Some may say there are certain irregularities and wrong procedures in  insurance operations. I reply that this is true but it is a great mistake to claim that these irregularities take place in all insurance companies. If they happen, they will be on argument on who commit them and not on insurance and a system. 
From my good study of insurance and its various types and forms my working experience in dealing with it I see no reason for prohibiting it, Insurance is an orderly system. It has clear and direct eight basic principles and about nine limitations which show together the nature of insurance and the way of exercising it. These principles and limitations can be considered the platform for passing a  judgment on insurance system. Those of the opinion of prohibition must study them well. What is worthy to mentioning is that prohibition concentrates much on life insurance because it is against Allahs wish and fate. It clearly they misunderstand it. Life insurance offers great benefits to  people and there is no reason to prohibit it. We must realize that the title life insurance is branched into different types and it carries another meaning not as some understand it. We may discuss this point next. 
To conclude, my advice to the figures who advocate the idea of prohibiting  the system of insurance is to read and exercise insurance much. To assess something you must have good knowledge about it.