 In this module, we shall continue with our discussion on insurance and Takaful. We have looked into in a very general and brief way what is the nature of insurance business. And in this module, we would look at some of the problems with insurance business from a Sharia viewpoint. I must admit that quite a number of earlier Sharia views on insurance, they were at best based on some incomplete understanding of insurance. And this is quite understandable. Whenever a new phenomenon occurs, Sharia scholars would take some time to understand it and make up their mind in terms of Sharia viewpoint. There are many examples where Sharia opinion has actually evolved. I remember when I was growing up in the mosque, there used to be these posters which would explain why the use of loudspeaker is haram for adhan and for namaz. However, now this is a non-issue. Similarly, there are some very interesting stories. When the cigarette started, cigarette was a completely new thing. You know, a stick, someone holds in their mouth, lit it. In the beginning, in some of the Arab countries, the rural Muslim population thought that the person who is smoking are normally English foreigners. So someone who is smoking, they would say that he is a shaitan. He is ruining our faith. The word for jahannum in Arabic is naar. They would say he is actually eating naar and then bringing out only the smoke. So he is trying to establish that he is not a jahannum. That is why he is a shaitan. Now even some Sharia scholars, especially from Al-Azir University, they themselves smoke. So the earlier views on the kaful, they were based on some kind of incomplete understanding. For example, many scholars in those days, they said life insurance was haram because how can life be protected? They did not know that the name of it is life insurance. Actually, life insurance does not protect the life of the person who is getting insurance. Rather, it helps the people who are left behind. However, many Sharia scholars, they held this view that life insurance was not permitted because it is against the principle of tawakkul al-Allah. However, later Sharia opinions are very well established. Sharia scholarship says that insurance has got a few problems but fundamentally there are two problems. It involves reba and it may involve horror and gambling. Let us explain this point in a bit detail. So we have this guy. He has got a face but here we are presenting him as a faceless guy. So this guy, he gives 1 lakh rupees to an insurance company now so that if something happens in future, something bad, risky thing, the insurance company would be compensating him for the loss. Now if the loss at T1 that occurred due to some accident, fire theft, depending on what was this insurance for, the company pays him 87,000 rupees. Now this could be 80,000, this could be 50,000 and if this thing does not happen, the person would not be receiving anything in exchange of 1 lakh rupees. Now if this is the case, if for example the person has given 1 lakh rupees and during that period of insurance receives back only 87,000 rupees, that would be the case of exchange of money in unequal amounts. 100,000 dena, 87,000 vapasle lena, that is called riba and technically insurance involves riba. If we ignore that point, this is quite possible that the person receives nothing or 87 or 50 or 10 depending on the nature and the quantum of the loss but person is paying this definite amount, certain amount, 100,000 rupees. So 100,000 rupees against something which is not certain, that is called gharat which is prohibited as well. Now in an extreme case, the person either gets some amount or the person does not get any amount if the person is lucky not to have met any accident, right? Or in an insurance contract context the person is unlucky because the person would not be getting anything. In this case, this may resemble gambling. So due to all these problems, Sharia scholarship has taken a view that insurance is not permitted in an Islamic economic framework. However, as you have seen previously as well and this would be your thinking as well that insurance actually provides quite a useful service. The way insurance is conducting, this may not be permissible. However, the objective, the rationale behind insurance is quite good. Now if insurance itself is a good idea, the question arises can we come up with a Sharia compliant alternative to conventional insurance? This is something we are going to discuss next.