Evolution of Takāful insurance

Generally, insurance as a concept is an alien economic tool in Islamic jurisprudence. Prior to the Hanafī jurist Ibn CAbidīn (died: 1252 A.H), there was any scholastic discussion on insurance and its related terminologies even though Kafalah (guaranty) as a contractual transaction is noticeably present in Islamic transactional law. Ibnu cAbidīn was the pioneer jurist to have exercised his legal verdict on the case and adjudged insurance impermissible (Salūs, 1986, p,164). Until after a century, the legal status quo of insurance remains as adjudged by this scholar until it was later opened to a scholastic discussion when some jurist seemed unsupportive to the formal judgment. In May 1965, the Islamic research center held in Cairo tabled for juristic discussion- among others- the legality of the prevailing commercial and conventional insurance. The conference with its majority participants ruled the commercial insurance impermissible and devised therein another Sharī’ah compliant module that is latterly known as a Takāful or Ta’awun insurance. (Salūs, 1986, p, 164). Researches later continued rereading and reappraising the commercial insurance and the majority of the jurists still opined its impermissibility until 1972 that a group of scholars attended a conference held in the Libya University discussingamong other topics the commercial insurance in Islamic jurisprudence. Even though the majority of the attendees unanimously agreed to utilize other means of commercial insurance except live insurance, they still believed an alternative insurance that is Sharī’ah compliant be devised. until 1976 that an international conference on Islamic economics was held in Makkah which had in attendance more than two hundred scholars, professors and experts of Islamic economics and finance who agreed to the fact that commercial insurance does not represent the Islamic principleof solidarity and mutual association and that a committee of experts be charged to devise out a Sharī’ah compliant module of insurance that is devoid of interest and speculation and will at the same time connote the Islamic recipe that will substitute the conventional commercial insurance (Salūs, 1986,164). From this synoptic overview, it is deduced that the practical evolution of the Takāful insurance could be linked to the early seventies of the twentieth century having its main start point in the gulf countries such as Saudi Arabia, Bahrain etcetera and spreading across Asian countries where Malaysia assumes both the pioneering and the leading position followed by Indonesia Pakistan etcetera. The spread and entrenchment later got to Egypt ,Maghreb Algeria and other countries in the northern zones of Africa not leaving behind- even with slow wheeling- countries in the sub-Saharan zones such as Kenya and Nigeria. According to a research (“Emergence and evolution,” 2017). Takāful insurance is currently operational in more than 75 countries. The research also affirmed that starting from 2006; Takāful insurance has been gathering momentum spreading to other areas in Africa and even in Europe where a big community of Muslim people has settled down.