The concept and development of insurance in Islamic countries

Islamic jurists are averse to profit sharing and risk. Insurance appeared in Arabia in the 18th century. Ibn Abidin, a Hanafi scholar, first investigated the nature and legality of insurance that thought it impermissible. The concept of abstract legal acts is not really a part of Islamic legal thought. According to one opinion in Hanafi Islamic law, a Muslim could collect insurance benefits but could not enforce his claim against a foreign disputant. Although he could not enforce a claim against insurance agents with Dhimmi status, he could do so at the insurer''s overseas head office. As social institutions that helped Muslims in calamities fell apart, it became more justifiable for Muslims to take out insurance policies. Insurance may also be seen as a mutual cooperation among community members. As for interest, a 1965 conference of the Islamic Research Academy decided that interest charged on public enterprises is legal because of a social-benefit argument.