Insurance and Reinsurance

In the Name of Allāh,

the Entirely Merciful, the Especially Merciful

Praise is due to Allāh, Lord of the worlds, may the blessings and peace be upon our master Muḥammad, the last of prophets, on his family, and all his companions.

Resolution No. 9 (9/2) Insurance and Reinsurance

The Council of the International Islamic Fiqh Academy of the Organization of the Islamic Conference, holding its 2nd session in Jeddah, Saudi Arabia on 10–16 Rabīʿ al-Awwal 1406H (22–28 December 1985),

Having reviewed the presentations of the participating scholars concerning

Insurance and Reinsurance,

Having discussed the studies presented and examined all the forms, types, and principles on which insurance and reinsurance are based, and their objec- tives and aims,

Having considered the resolutions of other Fiqh Academies and Islamic Councils in this regard,


First: The commercial insurance contract with a fixed periodical premium, which commercial insurance companies commonly use, is a contract that con- tains major elements of deceit that void the contract and is therefore prohibited by Shariah.

Second: The alternative contract, which is compliant to Shariah in this mat- ter, is the contract of cooperative insurance, founded on the basis of charity and cooperation. Similarly, it is a case of reinsurance based on the principle of cooperative insurance.

Third: Calling on Muslim countries to work towards establishing cooper- ative insurance institutions and cooperative entities for reinsurance to liberate Islamic economy from exploitation and end violating the system that Allāh has chosen for this Ummah.

Indeed, Allāh is All-Knowing.

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