Reinsurance, is it permissible ? : is reinsurance of reciprocal insurance permitted ?

Fatawa Question

Peace of Allah and his blessings be upon you. We are a group of Muslim families who want to form a reciprocal (Takaful) fund where if one of the breadwinners died the rest will pay his / her family $ 50,000 in order to settle any outstanding debts on the diseased and $ 5,000 funeral expenses for each member of the group. In this State of the United States this is called reciprocal insurance and although it's not required to be incorporated or licensed the government requires reinsurance of the fund to protect the interest of the members. Our intention of forming this Takaful is to avoid conventional insurance. Our question is are we sinning to reinsure through commercial reinsurance if there are no reinsurance company that adhere to the Islamic law and it is required by the regulators to either reinsure ourselves for an amount we cannot afford or through conventional reinsurances.

Fatwa

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Publication Date

2001-08-02

Main Subjects

Economics & Business Administration
Religion
Islamic Studies

Topics

• Islamic jurisprudence
• Islamic economics
• Insurance
• Perillous saale
• Reinsurance
• Insurance companies
• Cooperative insurance
• Premiums

No. of Pages

1

Data Type

Fatawa

Language

English

Record ID

BIM-724459

• APA
• MLA
• AMA