An introduction to the Co-operative Insurance (Takaful)
The Islamic Co-operative Insurance (Takaful) is defined as a contract or agreement between the Islamic Insurance Company in its capacity as the representative of the subscribers’ fund and a natural or legal person on accepting him/her as a member in the subscribers portfolio. According to the said agreement, the new member shall be obliged to pay certain amount as a donation (premium) for him or from his revenues to the members of this society, provided however that the company shall pay to him on behalf of the Co-operative Society from the insurance funds collected from him or from any other subscribers and donators as an indemnification against the actual damage sustained thereby as a result of the occurrence of certain perils in the insurance on the properties or the insurance amount in the Co-Operative Insurance on persons (Takaful) as prescribed in the Insurance Policy, and the principles thereof shall be stated clearly in the bylaws of the company.
The Islamic Co-operative Insurance (Takaful) aims at achieving and realizing safety for the subscribers and contributors and for prevention of any perils in the future on the grounds of collaboration, Takaful and support among the subscribers to mitigate and reduce the damage that may be inflicted upon any of them as a donation not aiming at any profit. Moreover, it shall contribute to the development process in terms of investing the subscribers and contributors’ money in a manner to achieve certain level of profitability to reduce and mitigate the sustained perils and in an endeavor to safeguard the subscribers’ funds and support the business activities of the Islamic banks and financial institutions since their need for insurance represents a basic element to carry out their functions and business activities and for investment of their funds. Furthermore, the Co-operative Insurance (Takaful) provides the legal insurance alternative for all Muslims and others to protect from falling in any acts or conducts that are deemed inadmissible according to the Islamic Sharia’ Law via the traditional channels of insurance.
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