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Custom/Usage

Custom or usage have been developed with legal effect since the early primitive era until today. Customs which have been unanimously accepted by the society and became enforceable as unwritten laws. In the primitive society of Babylon, for example, people used to protect against any risk by their own family or tribe. Subsequently, when they migrated from rural to urban life, those people then faced lack of co-operation and protection as a result, eventually they required insurance for material protection. The Babylonian then introduced a kind of commercial contract known as Bottomary, 1 which has been acknowledged as had been being the foundation of today’s insurance practices.

 Table of Comparison

Principles of Contract Affecting Insurance and Takaful

Takaful

Insurance

It originated from the ancient Arab tribal custom.

It originated in the ancient Babylon Society in 4000-3000 B.C.

It was developed through Doctrine of al-’aqilah.(العاقلة)

It was first developed through the contract of Bottomry.

The doctrine of al-’aqilah could only be practised by way of mutual understanding or agreement between the tribes.

The Bottomry could only be practised by way of a mutual agreement.

The doctrine of al-’aq began its practices on the basis of mutual contributions.

The Bottomry began its practices with the Usury based transaction.

Sources of law are basically based on the Divine sanctions.

Sources of the law are basically based on human thoughts and cultures.

There is a universalism as far as the chief sources of law are concerned.

In the sources of law there is no universalism in nature.

If there is a conflict between the chief sources and analogical sources or ijtihad, the chief sources will always prevail.

If there is a conflict between the common law and the principles of equity, the equity will prevail.

If there is a conflict between the custom (العرف)and chief sources of law, the chief sources will prevail.

If there is a conflict between the custom and other sources of law, the custom will prevail.

   

The contract is a bilateral in nature which binds both contracting parties on the basis of Surah al-Madiha: 1.

The contract is a unilateral which binds the insurer only.

It is a co-operative institution based on the principles of contract and also mutual co-operation (التعاون).

It is a business institutions operated based on the principles of contract.

It opposes the riba while proposes an alternative doctrine called al-mudarabah(المضاربة) (profit and loss sharing) financing technique.

It involves the element of riba(الربا) (interest) in its transaction.

Practices of Contract Affecting TAKAFUL AND Insurance - Compared

Formalities in Takaful Contract

The basic formalities in a commercial contract(العقد) (al-‘aqad) is that, there must be a subject matter( المعقود عليه ) (al-ma’qud ’alaih) upon which the intended parties called al-Muta’aqidayn (المعقود عليه)(contracting parties) mutually agree2 by an offer (الإيجاب)(ijab) and an acceptance (القبول)(qabul) for an exchange of a valuable consideration(العوض المتقوَم) (al-‘Iwad al-Mutaqawwim) upon which parties are bound to perform the contract according to the terms and condition(الشروط) (shurut) agreed upon. The Majalle provides that, the basic formalities required in a contract are that, two parties undertake upon themselves to do something upon an offer (Ijab) and an acceptance (qabul).3 Dr. Hussain Hamid Hassan opines that, as regard to the formalities of a contract under Islamic law, there is a legal relationship created by a promise of one of the contracting parties (offeror) with the promise of the other (offeree) as the result of which follow consequences in respect of the subject matter of the bargain.4

 A takaful policy is a kind of financial transaction which is formed based on the general principles of contract. Since a takaful is a kind of contract, the formalities for the formation of a valid policy are based on the formalities required in other form of commercial contracts. The formalities before the conclusion of a policy required by the takaful companies of the contemporary world are based on general principles of contract (al-‘aqd). Under Islamic Law to form a takaful policy, there must be a subject matter at risk, upon which (subject matter) two parties (operator and participant) mutually agree by a proposal (ijab) and an acceptance (qabul)5 in which both parties undertake to share the responsibility to provide a reasonable material security against unexpected but defined risk on the subject matter. In other words, the formalities in a takaful policy are the proposal (ijab), acceptance (qabul), issuance of a cover note (a temporary document for a policy provided by the operator to the participant) and payment of takaful contribution(المساهمة) (al-musamahah) which are further analysed as follows:

 Proposal (الإيجاب)(Ijab)

 

 In a takaful policy, the person whose subject matter is at risk is the one who should approach the operator to undertake a responsibility (in consideration of contribution) for the material securing against an unexpected but defined risk on the subject matter. Therefore, in a takaful policy the owner of the subject matter (which is at risk) is the one who makes a proposal for the policy.

A proposal may be made by the owner of the subject matter according to his own wish. But for the purpose of a better dealing between the operator and the participant, the proposal form may be provided (with necessary questions for information) by the operator, and the proposer will complete the form with the correct and necessary informations, 6 which are material to the policy. In making a proposal, the proposer is under an obligation to disclose any defect in the subject matter likely to affect policy. Such an obligation can be justified by the following prophetic sanction:

عَنْ حَكِيمِ بْنِ حِزَامٍ رضى اللهُ عَنْهُ قَالَ: قَالَ رَسُوْلُ اللهِ صَلىّ اللهُ عَلَيهِ وَ سَلَّمَ فَإنْ صَدَقَا وَبَيَّنَا بُوْرِكَ لَهُمَا فىِ بَيْعِهِمَا، وَإنْ كَتَمَا وَكَذَباَ مُحِقَتْ بَرَكَةُ بَيعِهِما

Narrated by Hakim bin Hizam (r.a.), the Holy Prophet (SAW) If they speak truth and mention defects, then their bargain will be blessed, if they tell lies and conceal the defects, they might make some financial gain but they will deprive their sale of Allah’s blessing.”7

Uqba bin Amir (r.a.) also illustrated to the same effect that:

Uqba bin ‘Amir (r.a.) said: “It is illegal for one to sell a thing if one knows that is has a defect, unless one informs the buyer of the defect.”8

In the proposal form there should not be any declaration or information given by the proposer with evil purpose to deceive the operator while hoping for a gain something wrongfully. This is also indicated in the saying of the Holy Prophet (SAW):

عَنِ ابْنِ عُمَرَ رَضِي اللهُ عَنْهُمَا : أنَّ رَجُلاً ذَكَرَ للنَّبيِّ صَلي اللهُ عَليهِ وَ سَلَّمَ أنَّه يُخْدَعُ فيِ البُيُوعِ، فَقَال : ( إذِا بَايَعْتَ فَقُلْ : لاَ خِلاَبَةَ ).

Narrated by Abdullah bin Umar (R ), A person came to the Prophet (SAW) and told him that he was always betrayed in purchasing. The Prophet (SAW) told him to say at the time of buying, “No cheating.”9

In a commercial contract a proposal needs not to be made through writing or printing but an oral proposal through telephone or telex may also be held valid. Can the same method be applied in making a proposal for a takaful policy? In other words, can a proposal be made other than in writing (i.e. verbal, telephone or telex)? It is submitted that, despite the fact that a takaful is a kind of commercial contract its nature is different from other commercial contracts. It deals only with finance in which if a proposal is allowed to be made other than in writing or printing the terms, conditions, declarations or informations contained in the proposal may be altered at any time during the policy period which may create a dispute between the participant and the operator and may also give an opportunity to the participant to seek for a co-operation in the policy with an evil cause or to the operator to escape the liability. There is no room for the one who seeks cooperation with an evil cause nor for the one who escapes an undertaken liability as Allah SWT commanded in the following ayats respectively:

وَلاَ تَعَاوَنُوا عَلَى الإثْمِ وَ العُدْوَانِ

But help you not one another in sin and rancour.”10

يأيُّهَا الَّذِيْنَ ءآمَنُوا أوْفُوْا بِألْعُقُوْدِ

O you who believe! Fulfil your (undertaken) obligations.”11

In another ayat, Allah SWT ruled out that, there is no recognition for those who create destruction. Allah SWT said:

وَيَسْعَوْنَ فيِ الأرْضِ فَسَادًا وَاللهُ لاَيُحِبُّ المُفْسِدِيْنَ

But they (ever) strive to do mischief on earth. And Allah SWT loveth not those who do mischief.”12

It is concluded in the light of the above analysis that, a proposal for a takaful needs to be made in writing and printing (in order to avoid any kind of mischief or dispute between the operator and the participant). Can the proposal be made through electronic medias (fax, e-mail, telegram or any other printed methods) or by post which may be fall within the ambit of a written proposal? Certainly, these medias used by one for making a proposal may also be regarded as written. This is because, a written proposal means any kind of visible document. The purpose of the requirement of such a written proposal is to have a document for the future proof if necessary. Hence, a proposal may be accepted if it is in writing or of a similar in nature (i.e. fax, e-mail, post, printed form, telegram, internet, etc.). But there may not be any justification to accept an oral proposal for the sake of avoiding any dispute that may happen between the operator and the participant.

Once a proposal form is completed with appropriate information and declaration or clauses, the proposer has to sign and return it to the authorised person of the operator for further evaluation13 and make decision whether to accept or reject the proposal with the given terms and conditions, declarations, and informations. A proposal made by the proposer does not bind him14 unless it is formally accepted (qabul)15 by the operator. Therefore, a proposer has an option to revoke the proposal not only until it is received by the operator but it may be extended until the moment it is formally accepted by the operator. Once therefore, it is accepted the proposer should be bound by it and may not have any right of revocation (unless the question of options (الخيار)(khiyar) arises. This is because the commandment of Allah SWT to fulfil the obligation arises only when a promise is concluded by an offer and an acceptance. Allah SWT commanded to the effect:

يأيُّهَا الَّذِيْنَ ءآمَنُوا أوْفُوْا بِألْعُقُوْدِ

O you who believe fulfil (all obligations).”16

 

Acceptance (القبول)(qabul)

In a takaful policy, an acceptance is generally made by the operator. But in some situations an acceptance may be made by the intended policy holder if the operator does not agree to the earlier proposal made by the proposer and he adds some additional terms and conditions will be regarded as a counter offer to the intended policy holder. The mode of acceptance of a proposal may be inferred by any of the following conducts of the operator:

i) issuance of the certificate;

ii) issuance of a temporary cover note;

iii) issuance of a receipt for the first payment of contribution; or

iv) any kind of acceptance through (fax, letter, telex, telegram, e-mail and internet) to the proposal of the intended policy holder.

Once an acceptance is formally made, it cannot later be revoked. This is because a contract is final once it is concluded by a proposal and an acceptance. Once the contract is final the parties concerned are bound by it for its performance (الأدي)(ada’). This is justified by the Quranic sanction: 

يأيُّهَا الَّذِيْنَ ءآمَنُوا أوْفُوْا بِألْعُقُوْدِ

O you who believe fulfil (all) obligations.”17

The acceptance may be cancelled even after the acceptance is made if the operator is able to prove a breach of utmost good faith exists in the proposal made by the policy holder. In this case the operator shall have a right of option whether to cancel18 the certificate or to retain it with a reasonable remedies if any. 19 This is justified by the following prophetic injunction:

عَنْ حَكِيمِ بْنِ حِزَامٍ رضى اللهُ عَنْهُ قَالَ: قَالَ رَسُوْلُ اللهِ صَلىّ اللهُ عَلَيهِ وَ سَلَّمَ فَإنْ صَدَقَا وَبَيَّنَا بُوْرِكَ لَهُمَا فىِ بَيْعِهِمَا، وَإنْ كَتَمَا وَكَذَباَ مُحِقَتْ بَرَكَةُ بَيعِهِما

Narrated by Hakim bin Hizam, the Holy Prophet (SAW) said: If they speak truth and mention defects, then their bargain will be blessed, if they tell lies and conceal the defects, they might gain some financial gain but they will deprive their sale of Allah’s blessing.”20

 

Issuance of Cover Note ( عقد التأمين المؤقّت )(aqd ta’min muaqqat)

In a takaful policy, the issuance of the cover note does not give rise to a permanent enforcement. It is a mere receipt issued by the operator or his authorised agent which may act as a temporary document for a valid policy in force. A cover note is generally issued for the general policies21 (property, motor, business, etc.)

Sometimes, it may not be possible for the operator to issue a policy soon after the agreement is concluded between the operator and the participant. If the operator delays in issuing the policy and if the subject matter of the policy happens to face the risk before the issuance of the certificate then what would happen if the operator denies his liability to the policy holder because of non-existence of any document (issuance of certificate issued by the operator). In this situation, the policy holder also may be unable to make a claim against the risk on the subject matter because of the inability to prove a document (takaful certificate) for the policy. In such a situation three negatives consequences may arise:

i) it may give an opportunity for the operator to deceive the policy holder. In Islamic law, there is no room for the parties in the transaction to deceive each other. This is indicated in the saying of the Holy Prophet SAW:

The Holy Prophet SAW said: Deception would lead to the hell (fire) and whoever does a deed which is not in accordance with our tradition, then that deed will not be accepted.”22

ii) The policy holder may be deprived from a fair claim against the risk on the subject matter while giving an opportunity for the operator to gain which is unacceptable in the Islamic teaching as indicated in the Holy Quran. Allah SWT says:

يأيُّهَا الَّذِيْنَ ءَامَنُوْا لاَتأْكُلُوْا أمْوَالَكُمْ بَيْنَكُمْ بِالبَاطِلِ إلاَأنْ تَكُوْنَ تِجَارَةً عَنْ تَرَاضٍ مِنْكُمْ

“O you who believe! Eat not up your property among yourselves in vanities, but let there be amongst you traffic and trade by mutual goodwill……”23

  1. Mischief may take place between operator and policy holder which is also not appreciated in the eyes of Allah SWT. He says:

وَلاَتَبْغِ الْفَساَدَ فيِ الأرْضِ إنَّ اللهَ لايُحِبُّ المُفْسِدِيْنَ

And seek not (occasion for) mischief in the land. For Allah SWT loves not those who do mischief.”24

To avoid the aforementioned evil, injustice and mischief, it is important for the operator to issue a temporary cover note for the period until the actual certificate is issued. This temporary cover note may act as a proof for the policy holder and enable him to stand on his own with a document (cover note) by which he may also make a fair claim against the risk (if any) occurring on the subject matter before the actual issuance of certificate. To hold a written document for the proof of a financial transaction (including a takaful policy as it is also a financial transactions) is justified by the repeated Quranic sanctions. Allah SWT says:

يَأيُّهَا الَّذِينَ آمَنُوا إذَا تَدايَنْتُمْ إلى بِدَينٍ إلى أجَلٍ مُسَمًّى فَاكْتُبُوهُ وَلْيَكْتُب بَّيْنَكُمْ كََاتِبٌ بِالعَدْلِ وَلاَيَأبَ كَاتِبٌ أنْ يَكْتُبَ كَمَا عَلَّمَهُ اللهُ فَلْيَكْتُبْ

O you who believe! When you deal with each other in transaction involving future obligations in a fixed period of time, reduce them to writing, let a scribe write down faithfully as between the parties, let not the scribe refuse to write as Allah SWT has taught him so let him write.”25 

A written document plays a role for the most reliable proof is again justified by the Quranic sanction in which the offenders will be called in question relying on written record (evidence). Allah SWT says: 

وَجَعَلُوا الْمَلآئكةَ الْذِيْنَ هُمْ عِبَادُ الرَّحْمنِ إنَاثًا أشَهِدُوا خَلْقَهُمْ سَتُكْتَبُ شَهَادَتُهُمْ وَيُسْئَلُونَ

And they make into females angels who themselves serve Allah SWT. Did they witness their creation”. Their evidence will be recorded and they will be called to account.”26

A cover note may be issued for a temporary period of time. The duration for a cover note in force could be determined by the operator and to be stated it in the cover note itself. However, the validity of a cover note could be continued until expires. A cover note may cease its validity even before it expires that is when the operator issues the certificate before the expiry of the cover note. Therefore, with the existence of an issued certificate the temporary cover note may no longer have any legal effect.

Contributions( المُسَاهَمَة ) (al-Musahamah)

Contribution in a takaful contract is a monetary consideration(العِوض) (al-‘iwad) from the participant’s part which is an obligation arising from a contract between the participant and the operator. A takaful contract of mutual co-operation in which the consideration is required not only from one party but from both parties in which the operator is also equally bound by the contract and that in indemnity or benefit. The obligations of the settlement of the respective considerations in a transaction of a mutual cooperation is justified by the commandment of Allah SWT:

وَتَعَاوَنُوا عَلَى الْبِرِّ والتَّقْوى

 “Help you one another in righteousness and piety.”27

This ayat of tHoly Qur’an renders a duty to mankind to provide their mutual cooperation on a bilateral basis. Furthermore, in takaful contract, once the policy is concluded the participant is regarded as a principal debtor and must settle the agreed contribution to the operator accordingly. In such a transaction the participant is under a duty to pay the contribution regularly according to the terms and conditions as stated in the certificate. This is justified by the repeated saying of the Holy Prophet SAW in which the principal debtor is urged to settle his debt on time. The Holy Prophet SAW said:

قَالَ ابُو رَافِع فَامرَنِى أنْ اقضي الرجُل بَكَرَهُ......فَقَالَ رَسُولُ اللهِ صلى الله عليه وسلم اَعْطِهِ إيَّاه فَإنَّ خَيْرَ النَّاسِ اَحْسَنُهُمْ قَضَاءً

Abu Rafa’ reported that… the Holy Prophet SAW said: give it to him and verily the best of man is he who is best of them in payment it.”28

The Holy Prophet SAW also said:

عَنْ أبِى هُرَيْرة أنَّ رَجُلاً تَقَاضَى رَسُولُ اللهِ صلى الله عليه وسلم ......فإنَّ خَيرَكُم احْسَنُكُمْ قَضَاءً

Abu Hurairah (R) reported.. that a man demanded of the Holy Prophet SAW for a repayment of a debt…. And verily the best of you is he who is the best of your in repayment of loan.”29

A takaful policy is a binding contract, and therefore, the performance of consideration from both parties (the participant and the operator) through the payment of contribution (by the participant) and the indemnification (by the operator) are obligations which must be fulfilled. This is justified by the Quranic sanction. Allah SWT says:

يأيُّهَا الَّذِيْنَ ءآمَنُوا أوْفُوْا بِألْعُقُوْدِ

O you who believe fulfil (all) obligations.”30

Although a participant in a policy is treated as the debtor who is under a contractual obligation to settle the agreed contributions on time, it is not possible always to settle it debt on time due to some unexpected reasons. In such a situation what could be the legal position, of the participant and also the policy itself? Under Islamic law, if a debtor due to some logical reason is unable to settle the debt on time, the debtor should not be pressured by the creditor rather he is advised to extend a reasonable time for the settlement. To waive the debt with a kind heart. The Holy Prophet SAW said:

عَنْ ابي قَتَادَةَ قال سَمِعْتُ رَسُولَ اللهِ صلى الله عليه وسلم يَقُولُ مَنْ أنْظَرَ مُعْسِرًا أوْ وَضَعَ عَنْهُ أنْجَاهُ اللهُ مِنْ كُرَبِ يَوْمَ القِياَمَةِ

Abu Qatadah (R ) reported: I heard the holy Prophet SAW have said: Who so gives respite to a debtor or grants him remission Allah SWT will save him from the calamities of the resurrections day.”31

 The holy Prophet again said:

عَنْ عِمْران بن حُصَِينٍ قَالَ قَالَ رَسُولُ اللهِ صلى الله عليه وسلم مَنْ كَانَ لَهُ عَلى رَجُلٍ حقٌّ فَمنْ اخَّرَهُ كان لهُ بِكُلِّ يَوْمٍ صَدَقَة

Imran bin Hussein (r.a.) reported that the Messenger of Allah SWT said: who so has his dues from a way and he gives time to him (for payment), he will get his reward of charity every day.”32

It is therefore, suggested that in a takaful policy if the participant is sometimes unable to pay the agreed contribution on time the participant should neither be penalised nor the policy be forfeited with paid-contributions. But the participant should be given a reasonable time for the settlement of the unpaid contributions and the enforcement of the policy should be continued according to the terms and conditions contained in the certificate.

However, if the participant fails to settle the unpaid contributions within the given period, the policy may be discontinued. This is because it is a contract of mutual cooperation. If, therefore, one party is unable to provide his agreed cooperation then it is unfair to the other party to continue the transaction with unilateral cooperation. Thus, if the policy is terminated due to failure of the payment of the contributions by the participant, the paid contributions should not be forfeited rather it is suggested here that, the paid contributions should be returned to the participants with the share of profits made over the paid contributions after deduction of the changes due to the operator. The charges to the operator are the debt due on the participant which must be deducted from the paid contribution as justified by the saying of the Holy Prophet SAW:

عَنْ ابِى هُرَيْرةَ قالَ قَال رَسُوْلُ اللهِ صلى الله عليه وسلم أيُّمَا رَجُلٍ افْلَسَ فَادْرَكَ رَجُلٌ مَالَهُ بِعَيْنِهِ فَهُوَ اَحَقَُ بِهِ مِنْ غَيْرِهِ

Abu Hurairah reported that the Messenger of Allah SWT said: Who so becomes insolvent and afterwards a man (creditor) takes hold of his exact property, he is more entitled to it than others.”33

 

It is again suggested that, under Islamic law, there is no circumstances which may render a policy forfeited with paid-contributions even if the participant commits a breach of good faith or any other offences. This is because an insurance policy is a financial transaction in which the paid contributions are the legitimate property of the participant which cannot be forfeited just because of his disfavourable acts. The participant may be charged for the wrongful acts (if any) in different ways by different laws but not by forfeiting his paid-contributions or depriving him (participant) from his lawful right paid-contributions. The paid-contributions are a trust( الأمانة) (al-amanah) to the operator, and they, therefore, should be due to the participant. This is because, under Islamic law, there is no justification for the trustee to refuse to render the entrusted articles to their proprietor once the depositor rightfully demands from the trustee.34 This is justified by the Quranic injunctions: 

إنَّ اللهَ يَأمُرُكُمْ أنْ تُؤَدُّوا الأمَانَاتِ إلى أهْلِهَا

Verily Allah SWT does command you to render back your trusts to those to whom they are due.”35

 

Also Allah SWT warned against those who betray a trust. Allah SWT says:

وَلاَ تُجَادِلْ عَنِ الَِّّذِيْنَ يَخْتَانُوْنَ أنْفُسَهُم إنَّ اللهَ لا يُحِبُّ مَنْ كَانَ خَوَّانًا أثِيْمًا

Contend not on behalf of such as betray their own souls; for Allah SWT loves not one given to prodigy and crime.”36

It is therefore, submitted that under no circumstances in Islamic law can the paid-contributions of the participant be forfeited, but a deduction may be made out of the paid- contributions and the profit made from them so as to cover the charges (if any) due to the operator. 

Formalities in Insurance Contract

An ordinary contract requires, inter alia, an agreement between the parties, the intention to create legal relations, and of course a valuable consideration. Similarly an insurance policy requires, inter alia, a mutual agreement between the parties in the form of an offer (the proposal or slip), and an acceptance (by way of issuance of the cover note, etc.), and the consideration (the premium and indemnity). The formalities adopted in an insurance policy are analysed as follows:

Proposal:

A proposal form is normally provided by the insurer to the insured. Usually, a proposal is made by an insured.37 In some situations, the insurer makes a counter offer when the insured’s offer is not up to insurer’s expectations. Such a counter offer by the insurer will become a proposal to the insured.38 A proposal is not necessarily in writing39[93] except in cases of marine, life and motor40 policies, in which situations a written proposal is needed.41 Although an oral proposal is generally permissible it is not advisable42 for the sake of avoiding disputes. This is because in an orally proposed policy, one day the insurer may have the opportunity to deny the liability to the insured on the ground that there is no proof of the proposal made by the insured.

In a marine policy at Llyod’s of London, the proposal is called a ‘slip’. A slip is a document which contains some essential features43 of the policy proposed by the assured and is submitted through the broke to the underwriter. A ‘slip’ is normally supplied by the underwriter in the form of an offer. In practice, a proposal form is usually filled up by or with the assistance of the broker on behalf of the insured.44 The communication of an offer occurs when it is submitted to the insurer45 or underwriter. A revocation of a proposal on the other hand, is open until the communication is made to the insurer but should be made before it is accepted by the insurer.46

 

 

 

1Clayton, G., British Insurance, Elek Books, London, 1971, p. 13.

2 See El-Hassan, Abd. El-Wahab Ahmed, “Freedom of Contract, the Doctrine of Frustration, and Sanctity of Contract in Sudan Law and Islamic Law,” in (1985) ALQ, 1:1, p. 55-556

3 The Majelle, Art. 103.

4 Hasaan, Hussein Hamid, Al-Madkhal Li Dirasat al-Fiqh al-Islamy, Maktabah al-Mutanabbi, Cairo, 1979, pp. 242-243.

5 See Saleh, Nabil, “Definition and Formation of Contract Under Islamic and Arab Laws”, (1990) ALQ 5:2, p. 101-115.

6 Hardinur Mohd. Noor, “Introduction to General Takaful Business in Takaful (Islamic Insurance), Concept and Operational System from the Practitioners Perspective”, BIRT, Kuala Lumpur, 1996, p. 52.

7 Shaih al-Bukhjari, Kitab al-Buyu’ (Trans), 6th Ed. Khan, M. Muslim, Kazi Publication, Lahore, Vol. III, NO. 327, p. 184.

8 Sahih al-Bukhari, Kitab Al-Buyu’ (Trans.) op. cit Vol. III No. 292, p. 166.

9 Sahih al-Bukhari, Kitab al-Buyu’ (trans.) op. cit., Vol. III, No. 352, p. 199.

10 al-Quran, Surah Al-Maidah, 5:2.

11 al-Quran, Surah al-Maidah, 5:1.

12 Al-Quran, Surah al-Maidah, 5:64.

13 Hardinor, Mohd. Noor, “Introduction to General Takaful Business” Op. cit. p. 52.

14 See The Mejelle, Arts, 101, 103 and 104.

15 See Id., Arts 102-104.

16 al-Quran, Surah al-Maidah, 5:1.

17 al-Quran, Surah Al-Maidah, 5:1.

18  al-Quran, Surah AlMaidah, 5:1.

19  See, The Mejelle, Arts. 357.

20 Shaih al-Bukhari, Kitab al-Buyu’ (Trans), 6th Ed. Khan, M. Muslim, Kazi Publication, Lahore, Vol. III, NO. 327, p. 184.

21  See, Ahmad Mazlan Zulkifli, “ Woprking System of General Takaful Business, in Takaful (Islamic Insurance), BIRT, Kuala Lumpur, 1996, p. 75.

22 Sahih al-Bukhari, Kitab al-Buyu’, (Trans), op. cit., Chapter 61, p. 148.

23al-Qur’an, Surah an-Nisa’ 4:29.

24al-Quran, Surah al-Qasas, 28:77.

25al-Quran, Surah Al-Baqarah, 2:282.

26al-Quran, Surah al-Zukhruf, 13-19.

27al-Quran, Surah al-Mai’dah, 5: 2.

28 Miskatul Masabih (Debt), Karim, Al-Haj Maulana, Fazlul, (Trans.) Ch. XIII, No. 4, pp. 204-207.

29 Miskatul Masabih, Ibid, NO. 5, p. 207.

30 al-Quran, Surah al-Maidah, 5:1.

31 Miskatul Masabih (Debt), op. cit., p. 206.

32 Mishkatul Masabih, Ibid., p. 214.

33 Mishkabatul Masabih, Ibid, p. 216.

34 al-Quran, Surah an-Nisa, 7:58.

35 al-Quran, Surah an-Nisa, 4:58.

36 al-Quran, Surah an-Nisa, 4:107.

37 Rust v Abbey Life Assurance Co. (1979) 2 Llyod’s Rep. 334.

38 See the decision in General Accident Corp. v Cronk (1901), 17 TLR 233.

39 Murtit v. Royal Insurance Co. (1992) 10 Llyod;s Rep 191.

40 See the Morot Vehicle (Third Party Risks and Compensation) Act (Singapore), 1985, S. 4(5).

41 The Marine Insurance Act (UK) 1906 at S.22; also The Life Insurance Act (UK), 1774, S.2.

42 See, Meng Tan Lee, Insurance Law in Singapore, Butterworth, Singapore, 1988, 22.

43 See Birds, John, “Warranties in Insurance Proposal Forms”, in Journal of Business Law, 1977, p. 231.

44 Shaikh Mohd. Noor Allam b. S.M. Hussain,” Contract of Insurance - Agent’s Error. The Law in Malaysia and the Phillippines” in 1996 1 CL JIXXXVII.

45 See Nik Ramlah Mahmood, Insurance Law in Malaysia, op. cit., p. 8.

46 See The Contract Acts (Malaysia) 1950 S. 5(1).



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