(Our Lord! Punish us not if we forget or fall into error, our Lord! Lay not on us a burden like that which You did on those before us; our Lord! Put not on us a burden greater than we
have strength to bear. Pardon us and grant us forgiveness. Have mercy on us. You are Moulâ ( Patron, Supporter and Protector etc.), give us victory over the disbelieving people. )
Chapter 2: Al-Baqrah, part of Verse 286.

Riba:
Although the Takaful insurance companies have come into existence, but their operations so far have been limited to a few inves-tors and to a small area of the concerned countries. How far they are successful in getting rid of the interest is still not known. All the claims of being free from interest on the basis of ‘Al Mudhareba’ are yet to be proved. Unless these companies come into public, and market the idea as well as the product, it is difficult to be convinced that they too are free from the interest unlike the conventional insurance system.

Loans to the state:
As a large reserve fund is formed with the insurance companies out of the premium collections, they will have to invest somewhere. The state is the first deserving candidate to be loaned. If the Muslim state takes the loan and spends on the infra-structure, how it will return the money? With addition or without? This addition is interest or not?

Performance of Takaful in Saudi Arabia:
The Fatwa signed by six prominent scholars of Saudi Arabia, available on www.islam-qa.com has increased the concern about the future of the Takaful or the coop-erative insurance concept. It is a moment of serious consideration as the world has just started relying on the Islamic insurance concept. NCIC (National Cooperative Insurance Company) established on the basis of the Takaful General insurance was supposed to be functioning on Islamic principles. The deviation in applying the Islamic rules, as stated by the six scholars, makes everyone suspicious whether it is a failure of the management or the failure of the system itself.

The scholars gave the following reasons not to join this company:
1. The contract is not cooperative but commercial: Even though the company was established by separating the funds for instalments paid by shareholders from the financial activities of the insurance company (which has to do administering the funds paid by members of the insurance scheme)
– as is the case with the cooperative insurance – the system of insurance practiced by this company is nothing more or less than commercial insurance contrary to what its name may indicate.
Only 10% of the profit is distributed among the policy holders, 90% among the shareholders. This is the true nature of the commercial insurance. Giving back a small portion of the profit is nothing more than an attempt to give an air of Shariah legitimacy to the contract. In the cooperative insurance, the entire surplus must be given to the policyholders, either being paid out in cash or placed in a contingency fund.
2. This company has the contract of reinsurance with those foreign companies, which are purely commercial and collect more than half of the insurance payments. For example, NCIC collected 1.54 million Saudi Riyals from the customers and paid 716,584 to its reinsurers in the year 2003. The insurance payments were sent outside the country. Therefore, it is a pure form of commercial insurance.
3. The company invests in stocks and bonds, which are Haraam (illegitimate).

Signed by:
1. Dr. Mohammad Ibn Sa’ood Al Usaymi, General Director of Shariah council of the National Bank;
2. Dr. Yousuf Abdullah Al Shubayli, Faculty of Judicial Matters Committee, Imam Mohammad Bin Saud Islamic University;
3. Prof. Dr. Sulaiman ibn Fahd Al Eissa, Imam Mohammad Bin Saud Islamic University;
4. Prof. Dr. Saleh Ibn Mohammad Al Sattan, Prof. of Fiqh, University of Gassim;
5. Dr. Abdul Azeez Ibn Fawzaan, Imam Mohammad Bin Saud Islamic University;
6. Dr. Abdullah Ibn Moosa Al Ammaar, Imam Mohammad Bin Saud Islamic University.

(Note: The above report is included for the sake of alarming all those who are planning to establish the Takaful or Cooperative insurance companies based on the Islamic principles so that they can be aware of the possible mistakes or the negligence by the management and administration, and take steps to avoid further mistakes. But, on the other hand, there are successful examples too.)

Qatar Islamic Insurance Company, established in 1992 has been successful in the field of General as well as life (takaful) insurance. They are operating in Life, Cargo, Marine, Car, etc. The scholars are satisfied from the profit distribution system which is on the basis of Islamic Al Mudhareba whereby the premium payers get equal share of profit like the shareholders of the company.
Recently they introduced two important life policies ‘Aman’ and ‘Sanabel’. These policies are getting good popularity among the local Arabs. Up to 14% profit has been shown in their last financial report on the website.

Reinsurance or Retakaful
There is a lack of capacity within the Takaful industry for rein-surance. Therefore, a certain proportion of risk is placed with the international reinsurance companies that operate on the conventional basis. The reinsurance from Takaful companies ranges from 10% in the Far East where Takaful companies have relatively smaller com-mercial risk (so far), to the Middle East where up to 80% of the risk is reinsured on the conventional basis.

Lack of proper marketing
According to the surveys the penetration of the life insurance in terms of premium in Muslim countries is less than 1% of the GDP. It is therefore clear that Takaful had immense potential but remained untapped. The conventional life insurance is going to complete its 200 years and has penetrated almost 80% of Europe, Japan, America, Singapore, etc. Yet the Muslim world’s penetration is less than 1%. They are still pondering over the arguments of legitimacy. A solution should have been developed and come into action long ago. Takaful industry has completed almost 15 years so far when the first Takaful companies were established in Sudan and Malaysia.
This indicates that the marketing of Takaful has not been professional and convincing. It seems there is not adequate training in the field of insurance marketing.

Too much stress on profit distribution
The most stressed point in the presentation of Takaful has been the lure of the distribution of profit among the policy holders whereas the conventional insurance like LIC stresses mainly on the potential risks. As the prime interest of a common man in buying the life insurance is not the profit but the risk coverage, everyone can not be lured of the profit alone.
As far as the profits are concerned, the eventual return to a policy holder in the conventional insurance is still higher (if compared with LIC) than the Takaful. Therefore, the expatriate Muslim community is more inclined to the conventional life insurance than the Takaful. In Mallapuram district of Kerala which is known to be a Muslim majority area with most of the religious groups operating there, the record of premiums is the highest in all 100 branches of LIC in Kerala.

Too much stress on Islamic Shariah slogans
The Shariah is used as the main marketing tool for Takaful. In much of the literature available on Takaful, the main stress is given to the strong opposition of conventional insurance on the basis of Halaal Haraam, virtues of cooperation, solidarity and brotherhood. However, these are mere concepts that can not simply be equated and therefore can not be applied as a basis of legal principles in a contract. Principles of Al Mudhareba, Al Mushareka and Al Wakala, etc. are much publicised but a consensus on a common method is still lacking among the scholars and the companies.
With due respect to all these slogans, we can not deny the fact that by default it invokes communal feelings. The world is a global village where the solidarity and brotherhood are universal, and not limited to any particular region, religion or community. The conventional in-surance does not segregate anyone on the basis of the region, religion or community. A strong economy, fair political and social systems and a sense of humanity as a whole can bring together different com-munities. Instead of establishing a model which can silence the critics on the basis of the facts and figures, if we simply raise the religious slogans, no business is going to succeed.

Operator’s share of profit is not clear
Although basically under both the systems, the sharing of profit between participants and operators is an entitlement embedded in the contract, there is however a structural difference in the way such profit (surplus) is determined. The difference lies in the fact that under the principle of Al Mudarebah, the operator as the Mudharib or entrepreneur, can not charge its management expenses from the Takaful fund. On the other hand, under the Al Wakalah principle, the operator being an agent of the participants, can use part of the fund to cover its management costs. Further, under this system, underwriting the surplus of the Takaful fund, if any, shall be distributed back to the participants only, based on the promise that the funds actually belong to the policyholders. Finally, the paid up capital is considered as the donation of the shareholders who are not supposed to expect any share in the profit. However, they can be entitled in the capacity as operator or managers.
Observing the performance of Takaful operators, it was found that their returns to the participants were comparatively low. On an average, the rate of profit declared to their participants was below 10% p.a. On the other hand, it is also understood that there could be operators who might not be able to declare any profit to their participants.

Lack of professional expertise and manpower
In a world of tough competition in terms of concept as well as business, it is inevitable to have most qualified, talented and competent human resources. To sell the idea of a revolutionary concept like Takaful, it is not enough to have the university degrees only, but one must have motivation, involvement and personal attachment to the subject. Unfortunately, the kind of people we often come across are those who are appointed on the basis of their academic qualifications. This is the tragedy of not only Takaful but of every big Islamic organisation. The organisations do not realise that the people working for them must have the “Dawah” talent along with their degrees. There should be a highly competitive test like the Indian Civil services exams to select the best intelligent candidates.
The second hurdle in the way of Takaful, as in almost any other organisational activity, is the nationalisation of the jobs. A qualified talented person can not get a powerful position unless he is a native of that country. And a large number of those who qualify on the basis of the nationality are usually not ideal for the jobs. Therefore, the law enforcing bodies make it impossible to run any organisation successfully.
America and Europe are dominated by the anti-Islamic forces but their doors are always open for the qualified and experienced manpower of any country anytime but, unfortunately, in the Arab countries, the visa and immigration rules and regulations are so strict that no one likes to go there if he has a choice. America and Europe welcome the talents and extend their shelter to even citizenship to any qualified person whether he comes from Somalia or India or Arab. Their attitude towards a foreigner is such that he will help to increase their resources, whereas a foreigner on arrival in the Arab country feels from the attitude of the citizens as well as the immigration and police department that they take him as somebody who will share their livelihood and, as a result, their livelihood will be reduced.
However, due to lack of talented qualified manpower Takaful is not effective in the marketing.

Claim’s settlement not easy
It is said that in both the insurances the claim will be settled promptly. On experience, we found that it is not true. The official requirements are so much that one has to exhaust himself for several months. There are instances where the people had to wait for years for the compensation. Most of the delays are due to bad management, lazy clerks, and unnecessary paper work. The common man gets so much disappointed from the experience of others that he prefers keeping himself away from the insurance.

The Advertising Cost:
In the Islamic insurance as well as in the conventional insurance, it is sad to note that advertising costs are being added to the administrative costs. Since the advertisement is a part of the expansion program, the insurer is obliged to bear the cost of advertisement. But they use the money of the depositors, which is against Amaana rules. The Shariah does allow this as the insurer is earning profit through the insured’s money.

The State Governments dictate the insurance companies:
Whether it is Islamic insurance or conventional insurance operating in any country, the companies have to operate within a legal framework of the concerned country. To obtain a license from the concerned Government, the companies have to compromise in many ways even to the extent of sacrificing their own rules. Since the Governments too can not be blamed as, after all, they are to be blamed for any failure of the company after issuing the license; therefore, it is obligatory for the Governments too to take every precautionary step to safeguard the public funds.

The Islamic insurance is still in an experimental stage. It is nothing but an adventure to establish a model. The previously described 25 companies mostly belong to the Muslim states or are sponsored or shared by the Muslim state governments. However, their operations do not cover even 5% of the actual need. The individuals have to come forward with the plans to experiment with more and more companies. But getting a License is not an easy task. The local governments restrict the companies with legislations like:
1. Appointing the managers of their own choice.
2. By restricting the companies to employ the native nationals only.
3. By imposing heavy taxes.
4. By restricting them to provide securities/loans to the government only.

In some cases, due to some compulsions, the Shariah rules become impractical because of Governments’ involvement, even in the Islamic states.
Same is the case with the conventional system. The Indian Muslims, in particular, have tremendous scope to experiment with the insurance schemes, but their competition is with giants in the insurance business. The Takaful doctrine is most ideal for the Indian Muslims as well as for others, but the corruption, political interests, communal attitudes of governments, and similar other factors are a big hurdle.
Since the insurance companies are one of the biggest profit generating organs, the Governments as well as the capitalists realise this fact very well, therefore, they pose every hurdle in the way of a new company.

Interest without loans:
One of the main reasons for buying a life insurance policy is future saving and security of the money. The saved money should be available to the policyholder anytime he wants. But unfortunately, in both the systems, one has to wait for his money until the maturity of his policy. In the conventional insurance he can draw loan and pay interest but can not ask a partial payment from his own policy.This is unfair. The insurer gives the insured’s own money, not from the insurer’s pocket and collects interest. Some companies like the LIC have introduced “money back policy” whereby the insured is paid back certain percentage of his policy with the intervals of 3 to 5 years. This too is not useful as suppose he needs some money badly in 8th year, 2 years before the schedule, then he has to apply for a loan and pay interest on his own money. Or he has to cancel his policy and the insurance is forfeited. He loses the bonus, part of the premium and loses the security of financial compensation to his family in case he dies. In Takaful too, the insured has no facility to draw a loan from his premiums which he has paid so far.
There should be a facility whereby an insured should be able to apply for loan up to a certain percentage of his deposits for a fixed maximum period without interest.

Nominee:
In both insurances the nominee is presumed to be only a trustee. But, if he uses the funds inappropriately, due to human nature, there is no system in insurance which can restrict him from doing so.

• Investment without interest:
Islamic insurance is free from interest. It is based on the profit sharing financing technique called Al Mudarebah. The insurer invests the cumulated money on profit and loss basis, and yields the profits whereas in the conventional insurance the insurer lends money to the private sector as well as to the state in the form of security, loan, mortgage, finance, etc. and collects a fixed interest. This interest added return is not legitimate to a Muslim living in a Muslim state. (For details, please see the Chapter ‘misconceptions – Riba’)

• Insured gets profit not the bonus:
Islamic insurance contract binds the insurer to share the profit. Since the insurer invests the cumulated amount of premiums, so the yield deserves to be called ‘profit’ whereas in the conventional insurance contract, it is not called profit but ‘bonus’. This is very small share of the actual profit (not more than 10% of the total profit). Point is to be remembered that the bonus is paid only in the life insurance. No profit or bonus is paid in the general insurance except a small discount on renewed policy. The insured sacrifices a large valuable amount only to buy the security, and gets nothing eventually.

• Agent’s commission paid by insurer – not by insured:
In Islamic insurance, the agent gets his commission from the insurer while in the conventional insurance system it is the insured person who pays the commission. Therefore, the premium is less in bank insurance as the bank collects the premium directly from the account without involving any agent. Also, it is seen that the agents offer discount on the premiums as they sacrifice their own share of the commission and share it with the policy buyer. This shows that the commission of the agent is charged to the insured.

• Premium returned in General insurance:
In general insurance of Takaful, in case nothing unexpected happens, the insured gets back the premium in full or part of it with the addition of the profit. In the modern insurance, once the policy matures, the insured gets nothing unless something unexpected happens before the date of maturity.

• Advertising costs:
Due to the enormous competition, the insurers have to use every possible source of advertisement through screen media and paper media. The cost of the advertisement, which is in crores, is deducted from profits. Consequently, on one hand it increases the premium rate and on the other hand the insured loses his margin of profit. In Takaful, insurer is obliged to bear the cost of advertisement. Except the administrative costs, insurer is not authorised to spend as the profit is treated as Amana. The advertisements are for the purpose of introducing the policies, attracting new customers and generating more business. These steps are purely for development and expansion. Therefore, the investors should involve their money instead of involving depositors’ profit.

• Zakat:
In Islamic based insurance, the company pays the Zakat of the insured’s paid premiums as well as on the profit made by the company. The company too pays the Zakat on its own liable income. The Zakat paid on behalf of the insured is deducted from his account. In principle, the amount of Zakat of all the insured is accumulated and used in a more collective and constructive way. This serves the purpose of “Baitul Maal”, which was the first ever social security system.

In the conventional system the insured has to pay his Zakat by himself separately. Since the exact amount of premiums and the bonus is not known to the policy holders, they are not able to pay proper Zakat. Since most of the insured buy the insurance as a saving for the future, they do not remember even to pay Zakat on this amount. As a result, the sum of money he gets at the time of maturity of a policy, is that amount on which the Zakat has not been paid all along the years. Thus the insured is committing sin if a proper account of the Zakat is not maintained all along the years of his insurance policy.

• Distribution of Zakat
Takaful accumulates the Zakat into a large sum and uses collectively to help to a large number of people. In conventional insurance each person pays individually. The amount distributed in bits and pieces does not benefit as many as in the Takaful.

Although both insurance and Takaful strive for a common target based on the contractual principles there are some aspects of practical mechanisms whereby both systems stand on their own platforms. Let us see the common factors as well as the exceptional factors between Insurance and Takaful.

Common factors:
• In principle, Islamic system of Takaful embodies the element of shared responsibility, joint indemnity, common interest and solidarity irrespective of religion, cast and creed. The insurance too is based upon the same principles.
• In both Takaful and Insurance, the policy holders would cooperate among themselves for the common good.
• In both Takaful and insurance, it is the money of the policy holders which is used to grow the organization as well as assist the needy.
• The premium paid is not a loan in both systems. It is a kind of refundable donation, intended to divide losses and spread liability according to a community pooling system.
• The element of uncertainty (Gharar) is eliminated in so far as subscription and compensation are concerned in both.
• It does not aim at deriving advantage at the cost of other individuals in both.
• The basic objective of both is to pay for a defined loss from a defined fund.
• Both are essentially a commercial activity. Both have to invest the cumulated amounts of the premiums to generate income for running the administration, paying compensations and for paying profits on maturity if the insured survives till the expiry of his policy.
• The nominee in both is not the absolute beneficiary but a trustee only who is authorised to claim the benefits on behalf of the legal heirs of the deceased.
• In both, the person who claims the benefits over a policy must have an insurable interest on the subject matter
• In both, the parties involve in an insurance policy must have legal capacity to enter into contract.
• Morally as well legally Uberrrimae fidel principle is the most important condition in both. The parties should observe the principle of utmost good faith, honesty and truthfulness in disclosing the actual facts about the life being insured.
• Islamic law of contract binds the insurer to issue a ‘Damaan’ (guarantee) in writing of the undertaking he is liable for. In the conventional insurance too the insurer issues a “policy certificate” mentioning all the details, terms and conditions of the policy. Both the operations are bound by writing only. No oral understanding is acceptable.
• The premium paid to Takaful is not a loan but an Amaana. This is similar to the principle of ‘Al Wadia’ (deposit) whereby two parties engage themselves in an agreement in which one of them deposits money to the other as a trust or ‘Amana’ for the purpose of safe keeping and future safety. The premium paid in the conventional system too is not a loan but deposit with the intention of safe keeping and future safety.

Since 1979, there are over 25 Islamic insurance companies so far to our knowledge, operating all over the world. Among them there are five in Malaysia, two each in Sudan, Bahrain, Brunei, Iran, and Saudi Arabia and one each in U.A.E., Switzerland, Bahamas, Luxembourg, Indonesia, Singapore, Qatar, Kuwait and Pakistan. OIC (Organisation of Islamic Countries), WAMY (World Assembly of Muslim Youth) and IDB (Islamic Development Bank) at present are taking the initiatives to establish international re-insurance corporations, study groups to spread the awareness of the insurance among the common Muslims. They are doing research for finding out more sophisticated ways of avoiding all the unlawful elements which are an integral part of the conventional insurance.

Sudan and Malaysia took the lead to establish the first ever Takaful insurance system. The gradual growth and development of the Shariah based insurance is satisfactory despite the fact that there are still some areas to be developed. It is sad to say that there are also many scholars who oppose the practice of insurance, especially the life insurance.
They have no alternative to bring forth; as a result, the majority of the Muslim Ummah is away from the mainstream of the insurance field and unable to bring any change in the system. There are, of course, drawbacks in the contemporary conventional insurance system. This does not mean that insurance practice is entirely unlawful and illegal. This trend of opposing the insurance without suggesting an alternative is damaging severely the Muslims living in the non-Muslim states like America, Europe, India, Sri Lanka, Russia, etc. It is the responsibility of the scholars to be innovative and guide the Muslims living in the Muslim as well as in the non-Muslim states.

This is purely a fair, honest and justified system. The insured is neither blackmailed due to the expected losses nor can the insurer take the opportunity to make millions overnight. Therefore, it deserves to be called a real contract of mutual cooperation. Whereas in insurance, the beneficiary of the profit is only the insurer, as in case of General and Life insurance, the insured gets a nominal percentage of the profit.

Takaful models in practice
Theoretically, Takaful is perceived as cooperative insurance where the members contribute a certain sum of money to a common pool. The purpose of this system is not profits but to uphold the principle of “bear ye one another’s burden”. The role of this practice indicates that the policyholders are in fact fund managers and they are the ones having ultimate control. However, the commercialisation of Takaful has produced several types of Islamic insurances, each affecting a different experience, environment and perhaps a different school of thought as analysed by Sabbir Patel of ICMIF (International Cooperative and Mutual Insurance Federation), UK.

Ta’awuni Model (Cooperative Model)
The Ta’awuni model practices the concept of pure Al Mudarebah in the daily transactions. In the pure Mudarebah concept, the Takaful Company and the policyholders will only share the direct investment income. The policyholder is entitled to a 100% of the surplus with no deduction made prior to the distribution. The model is applicable to life family Takaful as the fund is entirely distributed to the participants.

Non-Profit Model
This model includes social or government owned enterprises and programmes operated on a non-profit basis which utilises a contribution that is 100% ‘Tabarru’ (donation) from the participants who willingly give to those members of the society who fall victim to any misfortune.

Al Mudarebah model
The surplus is shared between the policyholders and Takaful operator. The sharing of such profit may be in ratio of 5:5, 6:4, or as mutually agreed by the contracting parties. Generally, these risk sharing arrangements allow the Takaful operator to share in the underwriting results from operations as well as the favourable performance returns on the invested premium.

Al Wakala model
Cooperative risk sharing occurs among participants where a Takaful operator earns a fee for services as Wakeel or agent, and does not participate or a share any underwriting results. As these belong to participants as surplus or deficit, under the Al Wakala model, the operator may also charge a fund management fee and a performance incentive fee.

Al Mushareka
Both the operator (the shareholders) and the policyholders are partners and divide the profit equally.

Once a person came to the Prophet Mohammad(ﷺ)and confessed adultery and requested to be punished. The Prophet Mohammad(ﷺ) turned his head to the other side. He came on the other side and requested again. Three times the Prophet turned away his head but every time he kept coming face to face to the Prophet and reiterate the same. Then the Prophet Mohammad(ﷺ) very unwillingly ordered the punishment. The reason of turning away the head was that the Prophet Mohammad(ﷺ) wanted him to go away without asking questions as the human life is dearer and respectable. He wanted to save his life. Allah knows best. May Allah guide us to understand His wisdom rightly.

Another similar incident can be quoted here that a women came to the Prophet Mohammad(ﷺ) and stated that she is having pregnancy due to the adultery. She wanted to be punished so as to satisfy her conscience. The Prophet(ﷺ) asked her to come after the birth of the child. She gave birth to a child and came again. Then the Prophet(ﷺ) asked her to come after completing the milk-feeding age (2 years). She came again after two years. At last, the Prophet(ﷺ) got compelled to order the punishment. Here, one may realise why the Prophet(ﷺ)was sending her away again and again. He wanted to save her life but she was bent on an act, which Prophet(ﷺ) was unwilling to carry out.

In another Hadith:
The Prophet Mohammad(ﷺ) warned not to ask questions as the nations of the old Prophets were destroyed only due to habit of their excessive questioning.

The tragedy of today’s Muslims is that they search halaal haraam through a microscope in those things which are least important. They close their eyes from those apparent haraams, which are most sinful and unanimously haraam in all Masaliks. For example:
• The dowry money and Jahez taken from the brides’ guardians are worst haraam in Sunni as well as Shia’s Fiqh.
• The films, serials and advertisements seen on TV come under “zina”.
• Giving and taking bribe is absolutely Haraam, but people practise it even there where it does not come under the “extreme necessity”.
• The interest, people pay on the loans for the car, construction of the house, etc. can not be counted as a “necessity”, it is Haraam.

It is very annoying that those Haraams, which spoil the morale do not have any importance, but at insurance, they look suspiciously and raise stupid questions as if they would be the first one to buy the insurance if it were not doubtful.

Everyone who belongs to a different school of thought is regarded as a Bid’ati, Kaafir or a Mushrik. Ulema-e-Haq are considered to be those who belong to the people’s school of thought otherwise they are Ulema-e-soo. This is the trend of thinking. Scholars as well as the ignorant have made it a habit to raise objections only; they never tend to come to a consensus even if it is full of benefit to the Ummah. Unless it will come from their priests or chiefs they will not accept anything and instead, they start making false propaganda against it without taking the trouble of gaining the first hand knowledge and genuinely reflecting on any issue they are faced with.

My efforts of writing this book and giving a solution to the Ummah may face the same consequence as mentioned above. We can only pray to Allah: May Allah guide me to accept what is right with Him. Allah knows better.

One of the reasons for lacking Ijtehadic spirit is the misunderstanding about the Islamic law. It must be removed from the minds that the divine laws are rigid, inflexible and irrespective of the timely needs. The law, Islamic or non-Islamic, basically, is a product of human needs, convenience and reasoning. Therefore, the purpose or the need create the law, the law does not create the purpose or the need. The ultimate purpose of the law is the justice and the welfare of the society with the consent of Allah. Other than the divine laws called Nass, which are clearly descended in the Quran, several factors which affect the making of the law include the social norms, customs, ecology and environment. A law suitable for an African country may not be suitable for an European country. A law workable in the urban area can not be practical in the rural area. Therefore, the human beings, ever since they started learning to live a social life, adopted a system of ‘greatest good of the greatest number’ i.e. majority opinion. In the democracy, if the majority opinion votes in favour of an act which is prohibited by Allah, the law is approved. The Shariah law does not give the liberty to the man to become the law maker by himself as it would be incompatible with the ethical control of human actions and, ultimately, of society. In Islam, the democracy is limited to the permissibility by Nass. Where the direct Nass is not found, neither in the Ahadith nor in the Companions (رضي الله عنهم) period, one has to do ijtehaad, and majority opinion is the convenient way.

There are ample examples in this regard from the Islamic history and the life history of the Prophet Mohammad(ﷺ) as well as of the Caliph’s. The procedure of the appointment of the Caliph, for example. Although it was not legislated by the Prophet Mohammad(ﷺ) but the Caliphs appointed a body to take the opinion poll about the probable candidates. Regarding the war plans and war prisoners, the Prophet Mohammad(ﷺ) used the opinion polling.

The guiding factor to the judgment of the right or wrong is the divine admonition of the Hadith that:
“choose the same for others what you choose for yourself”.

There are three main sources of the Shariah laws:
1. Direct commandments of the Quran
2. Instructions, recommendations or the acts of the Prophet Mohammad (ﷺ)
3. Acts left legally indifferent (those things which are left open where there is no direct ruling found in the Quran, Ahadith , Seerat or in the lives of the Companions (رضي الله عنهم)). Here the scholars, intellectuals, etc. are required to find a solution which does not go against the aims and objectives of the Shariah. This is called Ijtehaad.

The life insurance too falls in the category of the third source and is legally indifferent.
The question arises: who has the authority to do the ijtehaad?
This subject has been so controversial for centuries that it requires many more volumes. To shorten the argument, we find a logical as well as rational solution in the suggestions of Dr. Allama Iqbal, one of the most revered Muslim intellectuals, a poet and a leader.
In the “The reconstruction of thought in Islam” he suggested the application of the principle of “Ijma” (consensus) of the community on the fundamentals, leaving the matters of detail to the agreement of the scholars. This has been enunciated by Imam Ghazali too. Thus, the text, if properly interpreted, is capable of meeting new situations and the Islamic law will not appear rigid as it is generally considered, but on the other hand, flexible enough to provide for all the eventualities. Since it is not possible anywhere any time that all the scholars will agree to any issue with absolute consensus, therefore, there is no other solution than accepting the opinion of the majority of the reliable scholars.

For this reason only, we sought to get the opinion of the leading Ulema from all parts of India. The list of the Ulema as well as the institutions has been given in the Chapter “Permissibility of life insurance.”