Sharīʻah Appraisal of Conventional Insurance and Takāful:Sharīʻahand Ethical Issues

Abstract

    Contemporary Islamic insurance (Takāful) is an alternate to the conventional insurance. Although justification has been given by scholars in favour of conventional insurance however majority of Scholars (fuqaha) are against conventional insurance. Due to the presence of uncertainty (Gharar), Gambling (Maysir), interest (Ribā) and unlawful appropriation of others property (Akl-l-Māl-Bil-Batil)in conventional insurance, it is not fitted in Islamic framework. Alternatively Mudārabah, Wakālah and Waqf-Wakālah models are used for Islamic insurance in different parts of the world.Conventional insurance is different from Islamic insurance in the sense of contract formation, nature of capital, business apprehensions and investment strategies. Although lot of work has been done for Islamic insurance but yet there are  some issues which needs to be addressed in order to develop consensus on one practicable model, formation of regulations  and some other Sharīʻahand ethical concerns.