Friday, October 02, 2009

Islamic Insurance

I'm struck by the existence of Islamic insurance:
"The idea behind Islamic insurance is to bring together a group of people with limited means to cooperate and help each other, said Abdelkarim al-Saqa, an official at the ministry of religious endowments.

"The companies differ from other private firms by giving their clients the possibility to have their funds repaid if they do not make any claims.

"Some strictly observant Muslims consider that paying fees to an insurance company, leaving it to fate whether they would receive benefits or not, could be regarded as a form of gambling, which they believe to be against Islamic principles.

"Islamic insurance companies also generate income and profit by investing in projects that are deemed to conform to religious beliefs, Saqa said.

"He added that these companies do not invest in areas that contradict Islamic teaching such as firms that sell liquor.

"In addition to covering individuals against injury, they also distribute excess gains fairly between all the insured."

I don't mean to belittle anyone's religious values, and I certainly see how private insurance could be seen as a form of usury. In fact, given the practices of American insurance companies, it's arguably one of the worst forms. However, isn't the gambling thing a but of a stretch?

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Anonymous K said...

Actually, not at all. That's how insurance began - as a bet that you would live until X age, and the insurer (or sometimes another private individual) would bet you'd die sooner. If you exceeded the expectations, you could either renew or take the money. If you died, then they won the bet.

Gotta love England.

11:06 AM  

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