ABSTRACT
A principal argument against insurance, one whose case is strong and deserves careful analysis, is that of the Quran’s and Shari’a’s banning of usury and other forms of economic transaction which are deemed to be unproductive or to give unfair advantage to one party at the expense of the other. The history of insurance as it developed in the Arab world has traditionally been limited to joint sharing of common risk. This is a slight deviation from the purely societal interpretation of the mutually caring community, as particular interest groups could individualize risk to their collective advantage, even when it could benefit their competitors. The Islamic concept of insurance is, we recall, not primarily an economic or material concept, but one based on faith in God and the daily following of Islamic moral law which, under the protection of God, enhances security, well-being and prosperity in this life, and ensures a heavenly life hereafter. This chapter details those Islamic legal, juristic and Quranic codes that have a bearing on insurance. As will be seen, the whole concept is interwoven with the principles of the faith.
