A contract that has caused much controversy among contemporary scholars is that of insurance. Ever since insurance was introduced into Muslim countries, imported as it is from Western systems, scholars have fundamentally differed on its permissibility or otherwise. Some scholars consider it permissible in all its forms, and others find it forbidden in all forms, while a third group distinguishes between its different types and forms, making some of them permissible and pronouncing others as forbidden.
Contemporary literature abounds with papers on the subject, but all of these uphold one of these three views. Perhaps the most comprehensive research on this issue is the one prepared by Sheikh Ali Al-Khafeef, a highly eminent scholar of the first half of the twentieth century, presented in the second session of the Islamic Research Council. Sheikh Muhammad Abu Zuhrah, an equally eminent scholar, commented at length on this piece of research. Also, Professor Mustafa Al-Zarqa, a top scholar of the twentieth century, wrote a book on the subject which was published several times. Furthermore, Dr. Hussain Hamid Hassan, the former president of the International Islamic University of Islamabad, presented a paper on the subject of insurance to the first Islamic economic conference held in Makkah in 1396 AH. Another writer on the subject is Dr. Yussuf Qassim who tackles insurance in his book Al-Ta’amul Al-Tijari fi Mizan Al-Shariah, published by Dar Al-Nahdah Al-Arabiyah, Cairo in 1993.
Dr. Muhammad Haitham Al-Khayat tackles the question of insurance within the context of health insurance in a paper presented to a session of the International Islamic Fiqh Council in Kuala Lumpur in 1997. The paper discusses the four basic principles stated in the World Health Organization’s constitution, namely, justice, universal health equity, providing high quality health services, and guaranteeing the efficiency of these services at the best level and the lowest cost.
Dr. Khayat starts his discussion of insurance by making clear that all human situations involve risks of loss. From the Islamic perspective, such loss has nothing to do with good or evil, right or wrong, God’s pleasure or displeasure. This is evidenced by the Qur’anic verse that states: “It may well be that you hate a thing although it is good for you, and love a thing although it is bad for you.” (2: 216)
Exposure to risk in the different stages and relations of human life is both natural and inherent in most matters, grave or trivial. Crossing the road, driving a motor car, marriage, childbirth, work and trade, etc., involve certain risks. Such exposure to risk is part of God’s will in life and in the universe: “Every misfortune that befalls the Earth or your own persons is laid down in [Our] decree before We bring it into being.” (57: 22)
It is important to distinguish between such natural risks and transactions in which man intentionally produces a risk factor and unnecessarily puts himself in a position of exposure to such risk. Examples of such situations are betting and gambling.
Betting is an action by people who have nothing to do with the result they are betting on. A person who places a bet on a horse running in a race has nothing to do with the race itself. He is neither the jockey who rides the horse, nor the horse owner who is elated when his horse wins and stands to profit financially. Similarly, a person who places a bet on the result of a football match is neither a player nor a coach of either team. Likewise, people bet on the results of elections, but they need not be the voters and they have nothing to do with the party programs which could affect the result of the elections.
Everyone who places a bet on any such event tries to prove that he is able to know, in some way or another, what is unknown to mankind. He conceitedly tries to give himself a quality that belongs only to God: “Say: ‘None in the Heavens or on Earth, other than God, knows the hidden reality’ (of anything).” (27: 65). When a betting person loses, or indeed when he places his bet, he exposes himself to the risk of financial loss which he has deliberately perpetrated. Such a loss is in no way inherent in the horse race, the football match or the elections.
Similarly, a gambler exposes himself to a financial loss through a result over which he has no control, such as the drawing of lots, or divining the arrows, or the movement of the roulette. However, the psychological attitude of a gambler is very different from that of a betting person. A gambler is after entertainment through the feeling of taking risks, with the element of winning or losing taking a secondary position. A betting person tries to prove his ability and intelligence by showing that he is able to divine the future. Both expose themselves to self-induced high risk in order to fulfill their personal desires.
To deliberately expose oneself to the risk of financial loss is to be unjust to oneself, without justification. In its linguistic and Islamic sense, injustice is to put something out of position. In this case, it is an attempt to create a risk which God Almighty has not placed in the nature or original form of things. An authentic, sacred Hadith quotes God as saying: “Who does perpetrate a greater injustice than one who tries to create something like My creation?” (Related by Al-Bukhari). All such transactions, in which a risk is deliberately perpetrated by man’s will, are unlawful. The prohibition cannot be overridden by the presence of an element of usefulness to others, such as allocating a portion of the proceeds to sick people or students or the poor. In His infinite wisdom, God has prohibited pre-Islamic gambling, despite the fact that the winnings were distributed to the poor and the needy.
It is imperative, therefore, to look very carefully at rulings issued by some official scholars pronouncing as permissible certain entertainment activities despite the fact that they involve a host of forbidden practices.
They may even rule that lotteries included in such parties are permissible, on grounds that the organizers are only running such lotteries for benevolent purposes. The fact is that all the money raised in such fashion is forbidden. God, limitless is He in His glory, is good and He accepts only what is good and pure. To participate in such activities is forbidden, even though such participation brings no personal benefit.
Such forbidden practices, involving deliberate exposure to unnecessary risks, are totally different from health protection insurance, or other forms of insurance aiming to avoid loss or reduce its effects. For, cooperation to remove risk, or reduce its effects, falls within cooperation to further what is good and beneficial.
We will explain this difference in further detail next week, God willing.