Insurance as a system is a Western innovation with values influenced by the Judeo – Christian religion. The degree of compatibility of such insurance with Islamic traditions was discussed by scholars in various conferences on insurance (Damascus, Makkah, Jeddah, Cairo, Khartoum). Their views can be grouped into three categories.
The First Group: Insurance as a system fosters cooperation and good deeds and is in conformity with Islamic teachings. Scholars like Shiekh Mustafa Al Zarga, Shiekh Ali Al Khafif and others (Ulama) ruled that insurance is halal. Insurance contract is identical to Aqila and Muwala systems.
The Second Group: Only commercial insurance is permissible; life assurance is not acceptable in Islamic teachings. It is against the will of the Almighty Allah (Gadar).
The Third Group: All insurance – life and non-life – is not permissible. Majority of Muslim scholars agree with this group. The basic concepts to repudiate insurance as unlawful are:
- The concept of Gharar (uncertainty).
- The concept if Qimar (gambling)
The distinctive features of Takaful (Islamic Insurance) are appealing even to non- Muslims. Takaful operations yet to begin in India which offers huge market.