Islamic Economics Institute

Wednesday Academic Dialogue (5)

Models of Cooperative Family Insurance in

Models of Cooperative Family Insurance in

Arab and Islamic Countries: A Comparative Study

Full Text

Mohammad Sado Al-Jurf

Ommulqura University, Makkah, Saudi Arabia

Wednesday 28-09-2016 (27-12-1437H)


The paper aims to identify and examine models of providing cooperative insurance coverage to individuals and families in a number of Arab and Islamic countries. In this regard, the paper tackles the underlying implications of such models in the light of relevant legislations in these countries, based on illustrative empirical evidence. In conclusion, the paper demonstrates the fact that cooperative insurance models in these countries are founded, formally as well as practically, on mutual compensation (muawada) with regard to payment of membership subscription and receipt of indemnification in case of injury. As regards the relationship between policyholders and the insurance company, some would define it in terms of agency that involves collection of subscriptions and investment of insurance funds; others would argue that it is Mudarabah; while a third group is of the view that it is a mixture of the two. Varying viewpoints can also be depicted regarding the issue of whether insurance surplus is to be divided between policyholders and insurance company, or among policyholders alone. The paper also points out to the apparent and almost complete uniformity of regulations and documents of cooperative family insurance or Takaful in the sample countries, which obviously reflect the underlying organizational and legislative structures of the systems. Furthermore, the paper observes to identity between traditional and cooperative insurance terminology. Having portrayed this, the study recommends redrafting of regulations and documents of cooperative insurance to become reflective of its donation-based nature.

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