Date Added : 02-11-2015

Resolution No.(46) by the Board of Iftaa`, Research and Islamic Studies:
"Forms of Dealing with Islamic Insurance Company"
Date: 2001


The Board has received the following question:
What is the ruling of Sharia on dealing with the Islamic Insurance Company?
Answer: All success is attributed to Allah.
Having reviewed the forms of transaction applied in the Islamic Insurance Company and its corporate charter, it became clear to the Board that these forms are based on the system of cooperative insurance, which is permissible in Sharia. But, the transaction of the above company is also based on reinsuring with private commercial reinsurance companies, which don`t adhere to the rules of Sharia. However, since Islamic insurance companies are obliged to reinsure with these companies to be able to operate in the insurance sector, then the situation will remain as such until Islamic reinsurance companies are established.
Consequently, reinsurance and-the case aforementioned- are considered a need tantamount to a necessity, and the Muslim scholars have stated that a need is that whose non-fulfillment leads to hardship, whether that need was public i.e. includes the whole nation or private i.e. includes a certain category such as a the people of a country or a craft. Private here doesn`t refer to individual need. Therefore, it is permissible to deal with these reinsurance companies so long as there is a need for that, and within the above rules.
On its part, the Board recommends that Islamic insurance companies do their best to find international Islamic reinsurance companies so that the permissibility of dealing with the above commercial companies becomes based on a pressing necessity. The Board also demands the Legal Supervisory Department to make sure that reinsuring  with commercial companies is resorted to when  there is a certain need for doing so. And Allah Knows Best.


Iftaa` Board
Chairman of the Iftaa` Board, Chief Justice, Izz Al-Deen Al-Tamimi
Dr. Mohammad Abu Yahia
Dr. Abdulsalam Al-Abbadi
Dr. Yousef Gheezaan
Dr. Umar Al-Ashkhaar
Sheikh Saeid Hijjawi
Sheikh Na`eim Mijahid
Dr. Wasif Al- Bakhri