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Takaful (Arabic: التكافل, sometimes translated as "solidarity" or mutual guarantee)[1] is a co-operative system of reimbursement or repayment in case of loss, organized as an Islamic or sharia-compliant alternative to conventional insurance, which contains riba (usury) and gharar (excessive uncertainty).[2]
Under takaful, people and companies concerned about hazards make regular contributions ("donations") to be reimbursed or repaid to members in the event of loss, and managed on their behalf by a takaful operator.[3] Like other Islamic finance products, Takaful is grounded in Islamic Muamalat (commercial and civil acts or dealings branch of Islamic law).
In 2018, the takaful industry had grown to a size of $27.7 billion of "contributions" (from a 2011 figure of $12 billion).[4] The movement has been praised as providing "superior alternatives" to insurance that "reinvigorate human capital, emphasize personal dignity, community self-help, and economic self-development";[5] but also criticized as having "dwindled" in scope to an industry of "conventional insurance with Arabic terminology and language of contract".[6]
- ^ Khan, What Is Wrong with Islamic Economics?, 2013: p.403
- ^ Khan, What Is Wrong with Islamic Economics?, 2013: p.402
- ^ Ajmal Bhatty, President & Chief Executive Officer, Tokio Marine Middle East, Takaful Summit 2011.
- ^ "Islamic Financial Services Industry Stability Report 2019, Page 10". Islamic Financial Services Board. July 2019.
- ^ Cite error: The named reference
PfEoTit21Cwas invoked but never defined (see the help page). - ^ Khan, What Is Wrong with Islamic Economics?, 2013: p.410