Resolution No.(44) by the Board of Iftaa`, Research and Islamic Studies:
“ Ruling on the Proposed Regulations of Mutual Insurance for those Engaging in Murabaha with the Orphans` Fund Development Foundation “
Date: 15/11/1420 AH corresponding to 10/2/2000 AD.
The Board has received the following question:
What is the Sharia ruling on the proposed regulations of mutual insurance for those engaging in Murabaha with the Orphans` Fund Development Foundation?
Answer: All success is attributed to Allah.
The Board is of the view that the above type of insurance is permissible in Sharia for in this type, a number of individuals agree upon paying a certain sum, by each, as a contribution to be saved in a private fund or account, and to be spent in case an accident occurs to any of them. Its permissibility rests on the principle of cooperation, which is acknowledged by Islamic Sharia and its general rules. Allah, The Almighty, says what means: “Help ye one another in righteousness and piety, but help ye not one another in sin and rancour: fear Allah. for Allah is strict in punishment.”{Al-Maidah/2}.
The idea of this insurance exists in the Aqila(male blood relatives of the killer)system, which is based on solidarity and cooperation amongst the relatives of the murderer in unintentional killing when paying the Diya(blood money) of the murdered. In addition, mutual insurance lessens the financial burden on the family members of the deceased participant(mutual insurance), so they aren`t obligated to pay on his behalf, and he is acquitted before Allah the Almighty. Also, mutual insurance preserves the funds of the Orphans` Fund Development Foundation and secures its right to collect the debt due on the participants in case of their death.
This resolution{permissibility of mutual insurance} agrees with the theme of the second conference of the Islamic Research Academy , held in Al-Azhar during the month of Moharram,1385AH, the Council of the Fiqh Academy held in Makkah in 1399AH, and the opinion celebrated by many contemporary scholars. And Allah knows best.
Iftaa` Board
Chairman of the Iftaa` Board, Chief Justice, Izz Al-Deen Al-Tamimi
Dr. Mohamoud Al-Bakheet
Dr. Abdulsalam Al-Abbadi
Dr. Yousef Gheezaan
Dr. Umar Al-Ashkhaar
Dr. Abdulaziz Al-Khayyat
Sheikh Saeid Hijjawi
Sheikh Na`eim Mojahid
Sheikh Mahmoud Shwayaat