islam about insurance
I was an analyst for Lincoln re, part of Lincoln monetary group, certainly one of the biggest insurance and economic services businesses inside us. this turned into inside the 1990s. many Muslims had long been comfortable shopping for various kinds of insurance. they disagreed with two foremost Muslim objections to insurance: 1) that charges paid are in the long run invested in interest-bearing money owed, with premiums being implicitly based on interest rates; and a couple of) that buying safety could be seen as undermining God’s will. muslims who didn’t locate those objections compelling had constantly offered coverage. but, Lincoln re-changed into increasing in southeast Asia and noticed a gap for products that at least prevented the interest price problem. lots of our southeast Asian customers had been keenly interested in this product.
the product we advanced – for the life insurance marketplace – was called “takaful.” Investopedia defines takaful as “…a form of Islamic insurance, where participants contribute cash into a pool system as a way to assure every different in opposition to loss or harm.” I’d also time period takaful as being “Islam-compliant insurance.” we had been a reinsurer. reinsurance is while an insurance organization provides help to different insurance organizations. for a positive sum of money, we might assume a number of the danger that our consumer insurance corporations had borne, and we had further strategies to spread that risk out around the arena to stabilize the worldwide coverage marketplace. our precise product turned into “retakaful,” or kind of “Islam-compliant reinsurance.” our actuaries – or implemented mathematicians – had been in a position to plot reinsurance “charges” in place of “rates” that pretty thrilled our insurance employer clients. in fact, one of my tasks was to take actually dozens of pre-existing reinsurance agreements and redo them as retakaful agreements – and I also drafted new agreements.
notice that takaful and retakaful pretty well handle problem #1) listed above, but not 2). whether or not a specific product prices “premiums” implicitly primarily based on interest quotes or now not is an empirical question, however whether or not any such protective product is compliant with God’s will – or even simply human interpretations of the guidelines in their faith – is an issue of individual judgment of right and wrong. we have been inside the coverage commercial enterprise, not the theology business! that stated, in my private opinion, any Muslim who wants to buy a greater ethical coverage product could do properly to shop for their coverage, when viable, from a) a mutual insurance agency [or a mutual takaful company] and/or b) a not-for-profit enterprise. mutual insurance groups are owned by the policyholders, and I assume that’s more in the spirit of Islam than insurance from a shareholder-owned coverage organization is. maximum mutual organizations in we are basically not-for-profits, so extra of the blessings of the coverage visit the policyholders, and no longer to outdoor traders, and that i suppose that too is extra in the spirit of Islam. the best news for human beings trying to shop for coverage in us is that many of the most important existence and assets & casualty coverage agencies are mutuals! the bad information for Muslims trying to buy coverage in us is that takaful products have only been supplied sporadically, even though they have been provided.
a number of my discussion involves us agency where I worked and America insurance marketplace. muslims now not within us can clearly look for takaful merchandise in their nations, and also can try to work with mutual coverage [or mutual takaful companies] rather than for-profit businesses.