Islamic Economics Institute

Wednesday Academic Dialogue

Rights of beneficiaries for endowment contracts:
Fitting French assurance-vie to the Islamic moral order

Scientific Seminar with University of
 
Paris1 Panthéon Sorbonne, France

Mr. Ezzedine Gholamullah
Fellow, Chair for Ethics and Financial Norm

Wednesday 09 April, 2014 (09-06-1435H)

Abstract

French “life insurance” is distinct from insurance in case of death, which is “reprobate and contrary to morality” according to both Colbert and the Islamic law. The French life insurance contract is a mere shell providing an apt legal basis for capitalization and tax exemptions. Consequently, amount outstanding in life insurance contracts is close to 1. 4 trillion euros, close to 70% of French GDP, 15% of total assets held by French households, from which more than 40% own such a contract. One must then think how to fit this wealth transmission medium into Islamic moral order. We will thus examine the designation of beneficiary as life insurance subscription amounts to bringing the designated assets out of the signer wealth and into the insurance company’s balance sheet. Under French law, inheritance distribution rules thus do not apply strictly to transmission through life insurance. This custom is questionable from a Muslim legal perspective, as the Islamic law on inheritance seeks to protect the heirs, especially the most vulnerable from an economic point of view.

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Last Update 4/10/2014 11:28:12 AM