Jurisprudential Conditioning of the Takaful Insurance Contract: A Case Study of Islamic Insurance in Jordan

Abstract

This study aims to elucidate the reality of Takaful insurance, its juristic adaptation, and the impact of this adaptation on Islamic legal rulings. It also seeks to assess the extent of compatibility of the practical applications of Takaful insurance carried out by the Jordan Islamic Insurance Company with the decisions of the Islamic Fiqh Academy and the Sharia standards set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). To this end, the research begins by presenting the reality of Takaful insurance, highlighting its differences from commercial insurance, and discussing its major juristic adaptations. The study also examines the juristic opinions regarding the Sharia rulings on the applications of Takaful insurance. Since the Sharia rulings on Takaful insurance are based on its juristic adaptation and its application in Islamic insurance companies, the research attempts to uncover the mechanisms for implementing this contract in the Jordan Islamic Insurance Company. This is done through a specific questionnaire developed based on AAOIFI standards and the decisions of the Islamic Fiqh Academy, distributed to managers and employees of the Islamic insurance company, as well as experts, academics, and clients of the Islamic insurance company with extensive experience in this field. The research concludes, after juristic discussions, that the best juristic adaptation for the Takaful insurance contract is mutual consideration with minimal permissible excess, and that there is no difference between Islamic insurance contracts and commercial insurance if both are applied in an Islamic company.