The Ulemas’ status in Islam can not be challenged; neither their intention nor their knowledge is questionable. Their sincerity towards
Islam is recognised and respected as they dedicate their whole life selflessly for the benefit of the Ummah. As far as their views, analytical approach and argument is concerned, there is no sin in presenting the argument different to their views with authenticity, logic and rationality. As a matter of fact, the development of the insurance subject during last two or three decades has been enormous but most of the literature being taught at the Madrasa is decades, rather centuries, old. There is a need to introduce the modern concepts of economics, commerce, finances, arithmetic, insurance, etc. as subjects in the Madrasa’s syllabus.

The importance of learning the subject of accounts has been mentioned in the Quran. To stress the point, it is to be noted that the longest verse of the Quran is about this subject only.
Chapter 2 – Al Baqara verses 282-283 say:

يَا أَيُّهَا الَّذِينَ آمَنُواْ إِذَا تَدَايَنتُم بِدَيْنٍ إِلَى أَجَلٍ مُّسَمًّى فَاكْتُبُوهُ وَلْيَكْتُب بَّيْنَكُمْ كَاتِبٌ بِالْعَدْلِ وَلاَ يَأْبَ كَاتِبٌ أَنْ يَكْتُبَ كَمَا عَلَّمَهُ اللّهُ فَلْيَكْتُبْ وَلْيُمْلِلِ الَّذِي عَلَيْهِ الْحَقُّ وَلْيَتَّقِ اللّهَ رَبَّهُ وَلاَ يَبْخَسْ مِنْهُ شَيْئًا فَإن كَانَ الَّذِي عَلَيْهِ الْحَقُّ سَفِيهًا أَوْ ضَعِيفًا أَوْ لاَ يَسْتَطِيعُ أَن يُمِلَّ هُوَ فَلْيُمْلِلْ وَلِيُّهُ بِالْعَدْلِ وَاسْتَشْهِدُواْ شَهِيدَيْنِ من رِّجَالِكُمْ فَإِن لَّمْ يَكُونَا رَجُلَيْنِ فَرَجُلٌ وَامْرَأَتَانِ مِمَّن تَرْضَوْنَ مِنَ الشُّهَدَاء أَن تَضِلَّ إْحْدَاهُمَا فَتُذَكِّرَ إِحْدَاهُمَا الأُخْرَى وَلاَ يَأْبَ الشُّهَدَاء إِذَا مَا دُعُواْ وَلاَ تَسْأَمُوْاْ أَن تَكْتُبُوْهُ صَغِيرًا أَو كَبِيرًا إِلَى أَجَلِهِ ذَلِكُمْ أَقْسَطُ عِندَ اللّهِ وَأَقْومُ لِلشَّهَادَةِ وَأَدْنَى أَلاَّ تَرْتَابُواْ إِلاَّ أَن تَكُونَ تِجَارَةً حَاضِرَةً تُدِيرُونَهَا بَيْنَكُمْ فَلَيْسَ عَلَيْكُمْ جُنَاحٌ أَلاَّ تَكْتُبُوهَا وَأَشْهِدُوْاْ إِذَا تَبَايَعْتُمْ وَلاَ يُضَآرَّ كَاتِبٌ وَلاَ شَهِيدٌ وَإِن تَفْعَلُواْ فَإِنَّهُ فُسُوقٌ بِكُمْ وَاتَّقُواْ اللّهَ وَيُعَلِّمُكُمُ اللّهُ وَاللّهُ بِكُلِّ شَيْءٍ عَلِيم (282‫)

وَإِن كُنتُمْ عَلَى سَفَرٍ وَلَمْ تَجِدُواْ كَاتِبًا فَرِهَانٌ مَّقْبُوضَةٌ فَإِنْ أَمِنَ بَعْضُكُم بَعْضًا فَلْيُؤَدِّ الَّذِي اؤْتُمِنَ أَمَانَتَهُ وَلْيَتَّقِ اللّهَ رَبَّهُ وَلاَ تَكْتُمُواْ الشَّهَادَةَ وَمَن يَكْتُمْهَا فَإِنَّهُ آثِمٌ قَلْبُهُ وَاللّهُ بِمَا تَعْمَلُونَ عَلِيم(283)
البقرة:282-283

O believers, when you contract a debt for a fixed period, you should put it in writing. Let a scribe (means a writer, transcriber, translator) write with equity the document for the parties. The scribe whom Allah has given the literacy should not refuse to write. Let him write and let the one under obligation (the debtor) dictate, and he (writer) should fear Allah, his Lord, and should not diminish from or add anything to the terms which have been settled. But if the borrower be of low understanding or weak or unable to dictate (for any reason), then let the guardian of interests dictate with equity. And let two men among you bear witness to all such documents. But if two men not available, there should be one man and two women to bear witness so that if one of women forgets, the other may remind her. The witness should be from among such people whom you approve of as witness (your trustworthy). When the witnesses are asked to testify, they should not refuse to do so. Do not neglect to reduce to writing your transaction for a specified term (period), whether it is big or small. Allah considers this thing more just for you, for it facilitates the establishment of evidence and lessens doubts and suspicions. Of course there is no harm if you do not put it in writing the common commercial transactions you conclude daily on the spot (hand to hand short period loans) but in the case of commercial transactions you should have witness. The scribe and the witness should not be harassed: if you do so, you shall be guilty of sin. You should guard against the wrath of Allah: He gives you the knowledge of the right way and Allah has the entire knowledge of everything.(282).

If you are on a journey and cannot find a scribe (writer) to write the document, then transact your business on the security of a pledge in hand. And if anyone transacts a piece of business with another merely on trust, then the one who is trusted should fulfill his trust and fear Allah, his Lord. And never conceal evidence, he who conceals it has a sinful heart, Allah knows everything you are doing. (283).
Al Baqara : 282-283

To add to the importance of the accounts keeping, a Hadith is most appropriate here that:
“Allah rejects the prayer of three people, one among them is he who does not write when he deals any transaction (and then comes to Allah when he faces a discrepancy from other party)”

Wish that people look at the insurance or bank’s constitution or their contract. Every rule mentioned above from the Quran is written in those constitutions. The above teachings are the same for which the colleges or the universities award the degrees of commerce, chartered accountancy, etc.
What a pity that Islam teaches the importance of a subject in which the Muslims themselves are most backward. They should have been the champions of commerce and economics and lead the world today but, unfortunately, they shunned this subject from their syllabi. As an interpretation to the mentioned verses, they were supposed to have all the leading colleges and universities of economics and commerce. They should have been the founders and leaders of banking and insurance sectors as these departments are based upon ‘writing account with transparency and justice.
The concept of the Baitul maal itself carries the insurance as its integral part as the contribution collected from the rich was used for helping the poor, debtors and those who are unable to pay ransom (diyyat). Therefore, the Muslims should have been first to establish the insurance concept. As a result of their negligence, others have taken lead. They succeeded in establishing a perfect system of insurance and banking but as far as the transparency and justice is concerned, in many cases it is lacking. The justice and transparency depend upon the belief in accountability to God. Simple perfection is not enough. A Muslim is assigned the duty of establishing justice.

يَا أَيُّهَا الَّذِينَ آمَنُواْ كُونُواْ قَوَّامِينَ بِالْقِسْطِ
سوره النساء:4 , آيت:135 , جزء من الآية

O you who believe! Stand out firmly for justice…
(Chapter 4, part of Verse 135).

The Quran prohibits both the simple and compound interest. To define and calculate the profit and distinguish it from the Riba, one needs to be perfect in the mathematics and accounts. Otherwise, he can not grasp the real message of this verse. The verse also asks Muslims to be the experts in writing accounts so that others would come to them for accounting, but the situation is opposite. They have to spend huge amount of money to educate their children in accountancy, still they find it difficult to get a job of even clerk, cashier or book keeper. The finance control elsewhere in the world is either in the hands of non-Muslims or centrally controlled by non-Muslim system.

The strange thing is that to declare anything legitimate or illegitimate, the scholars interpret so many verses which hardly relate to the subject, but to legitimise and regularise a subject which is mentioned so clearly, they need more clear words from Allah as if Allah should have asked “O Muslims, study the commerce, economics, banking and insurance etc., so that you will become a fair and just nation.”
Ironically, the concept is that studying B.Com. or M.Com. is regarded as totally a worldly act and going to Madrasa is totally an Islamic act. Most of the Ulema too are responsible for erecting the wall between the mosque and the State like the Christian priests who heightened the wall between the Church and the State.

There is no reason why the Ulema should blame America or Jews for manipulating world economy while they themselves neglected such an important verse of the Quran and vacated the seat for others.

However, in the following views of scholars against the insurance, it can be noted that they are based on many decades old knowledge about insurance. None of the scholars bothered to visit any insurance company to find out exactly what the conventional or Takaful insurance is. As it is mentioned earlier that the legitimacy of the life insurance can not be generalized. Not every life insurance company can be regarded as purely interest free. But it varies from company to company. The private life insurance companies run their business purely on interest while the government owned or controlled companies involve in interest to a minimum level as the investment and source of income in the two are entirely different from each other.

I sincerely believe that if the scholars instead of concentrating on the conventional system of operation of life insurance, consider the sufferings and consequences presented in detail in these pages, they will certainly justify the life insurance. The realisation, although too late but not too late to learn, will serve as a big satisfaction and compensation to the Ummah who lost centuries by neglecting this most important subject.

We are including the views of the Ulema who are against the life insurance so that the readers themselves can judge the objections and the answers to the objections. None of the objections are unanswered in the following chapters.