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Dynamic Fiqh Applications In Takaful

By
Azman Bin Ismail1

Muqaddimah

Compared to banking, insurance is not seen as an equally important component of the financial
system. This is similarly true for Islamic banking and takaful. However, in developed countries
insurance is increasingly becoming an important aspect of the economy resulting in a higher
penetration when compared to underdeveloped and developing countries. In North America and
Europe the insurance penetration is 8.5% and 7.5% of GDP respectively whilst the average
insurance penetration in Japan and the four Asian Tigers is 11.4%1. On the other hand the
penetration rate of the underdeveloped and most Muslim countries is less than 2%.2

The importance of insurance as a financial force has evaded the radar of investors who prefer to
participate in the banking, particularly investment banking, and other ventures in the financial
services industry. However, the investment guru, Warren Buffet has made insurance as a backbone
to his invesment ventures. Indeed the insurance operation has been Berkshire’s core busines since
1967 when Buffet first took over its management and is described as an “economic powerhouse”.3
Certainly, the book value of the company has grown with a compounded annual growth rate of
20.3% in the last 44 year,4 a feat unmatched by any other.

The same can happen to takaful; for it is similar to insurance from the investment perspective.
Coupled with a burgeoning wealth of Muslim nations and a growing population of high net worth
individuals, greater wealth mobilisation through takaful is not unexpected in the future, for income
is not only generated through wakalah fees and/or mudharabah income but may also through qardh

1 He has provided training and consulting services in Malaysia, Singapore, Indonesia, Brunei, Qatar, Saudi Arabia and
Taiwan and presented papers in Kuala Lumpur, Singapore, Bandar Seri Begawan, Manama, New York, Tokyo, Cairo
London and Milan.

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“float”.5 However, its growth would necessary entail that dynamic fiqh applications are applied
when shariah advisors and jurists deliberate on issues in takaful.

Dynamism of Fiqh

The dynamism of fiqh cannot be understated; for 1400 years, the fiqh has developed an continue to
develop, even during the time when the doors of ijtihad were deemed to be closed. For takaful, the
need for the dynamism of fiqh is more clearly felt for it is a new matter that has not been known
before. Compared to Islamic banking, there are less people who knows the subject matter, even the
management of takaful companies, let alone shariah advisors. Therfore the drivers of takaful, as
well as the shariah advisors need to comprehend not only the technical aspects of takaful but extract
from the usul al-fiqh and fiqh turath (legacy fiqh) the relevant principles that may be applied to
takaful, taking into consideration the dynamism of fiqh.

The dynamism of fiqh is due to the application of ijtihad, which according to Hallaq, was
indispensible because “it constituted the only means by which jurists were able to reach the judicial
judgements decreed by God”.6 Sub-varieties of ijtihad include analogy (qiyas), juristic preference
(istihsan), presumption of continuity (istishab), and so forth, which is part of the methodology of
usul al-fiqh.7 Although many orientalists such as Schacht, Anderson and Gibb opined that the gates
of ijtihad have been closed at one point or another, Hallaq argued that this was not so and that8 :

(1) jurists who were capable of ijtihad existed at nearly all times;
(2) ijtihad was used in developing positive law after the formation of the schools;
(3) up to ca. 500 A.H. there was no mention whatsoever of the phrase 'insidad bab al-ijtihad' or of
any expression that may have alluded to the notion of the closure;
(4) the controversy about the closure of the gate and the extinction of mujtahids prevented jurists
from reaching a consensus to that effect.

Indeed many contemporary scholars advocate the use of ijtihad, the most prolific writer on this
subject being al-Qaradawi. Certainly al-Qaradawi, regarded by many as a contemporary mujtahid,
has always expounded his ijtihad through his writings such as Al-ijtihad fi shariat al-Islamiiyyah –
ma’a nazaratin tahliliyyatin fi al-ijtihad al-mu’asir, Al-ijtihad al-mu’asir baina al-indilbath wa al-

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nifirath and the like. According to him, ijtihad is not only necessary but is a fardh kifayah
(collective obligation).9 He also mentioned two types of ijtihad that contemporary jurists need to
perform. The first is ijtihad tarjihi intiqa’i and the second is ijtihad ibda;i insha’i.10 The former is the
extraction and comparison of the opinions of classical jurists and choosing the strongest opinion. In
this context, we may adopt the opinion of Malik in a particular matter, the opinion of Abu Hanifa in
another matter, the opinion of al-Shafi’i in a third and the opinion of Ahmad in the fourth.11 This is
different from talfiq because talfiq is just choosing an opinion without analysing and evaluating the
strength of those opinions. The latter is creative constructive ijtihad, that is developing a new ijtihad
that has never existed before because of new developments in the contemporary world. In this
respect he gave examples of ijtihad by contemporary jurists such as Muhammad Abu Zahrah, Abdul
Wahab Khalaf, Zaid al-Mahmud and others.12

It should be noted however, ijtihad is not the realm of the layman for one must possesss the
necessary knowledge to perform ijtihad. In this context, Hallaq quoted al-Ghazali requirements for
a mujtahid as follows :

1. Know the 500 verses needed in law : committing them to memory is not a prerequisite.
2. Know the way to relevant hadith literature; he needs only to maintaina reliable copy of Abu
Dawud's or Bayhaqi's collections rather than memorize their contents.
3. Know the substance of furu' works and the points subject to ijma’, so that he does not deviate
from the established laws. If he cannot meet this requirement he must ensure that the legal opinion
he has arrived at does not contradict any opinion of a renowned jurist.
4. Know the methods by which legal evidence is derived from the texts.
5. Know the Arabic language; complete mastery of its principles is not a prerequisite.
6. Know the rules governing the doctrine of abrogation. However, the jurist need not be thoroughly
familiar with the details of this doctrine; it suffices to show that the verse or the hadith in question
had not been repealed.
7. Investigate the authenticity of hadith. If the hadith has been accepted by Muslims as reliable, it
may not be questioned. If a transmitter was known for probity, all hadiths related through him are to
be accepted. Full knowledge of the science of al-ta’dil wal-tarjih (hadith criticism) is not required.

Qaradawi also suggested similar requirements but added that the jurist must really comprehend

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contemporary issues. Hallaq further stated that the methodology of usul al-fiqh was established to
discover the law of God13, which in jurisprudential terminology means the maqasid al-shariah
(objectives of the shariah) and that one should view “usul al-fiqh as a dynamic system of legal
thought, through the understanding of which Islam as a whole can be better understood.”14
Undeniably maqasid al-shariah has become the in thing; with arguments that it is shift from
thetraditional source of ijma’ (consensus) and qiyas (analogy) and the application of ‘illah (ratio
legis) and whose main proponents include Muhammad 'Abduh, Muhammad Rashid Rida, 'Abd al-
Razzaq Sanhuri, 'Abd al-Wahhab Khallaf, Muhammad Abu Zahra, and Muhammad Hashim
Kamali.15 The writer, however, disagree with this notion, for an analysis of the study of usul al-fiqh
reveals that maqasid al-shariah has always been inherent in it although al-Shatibi gave it a new
breath and infused it into usul al-fiqh.16

Egyptian wasiat wajibah

Tariq Ramadan
Ijtihad
Urf
Futuristic jurisprudence
Fiqh of balance
Fiqh nusus

There are several types of fiqh applications that are required for the takaful industry to become a
force. Offhand, these are fiqh aulawiyyat (priority jurisprudence), fiqh muwazanat (jurisprudence of
balances), fiqh maqasid (jurisprudence of objectives), fiqh nusus (jurisprudence of divine
evidences), fiqh waqi' (reality jurisprudence) and fiqh mustaqbaliyyat (futuristic jurisprudence). Of
these, fiqh aulawiyyat and fiqh muwazanat applications in takaful, specifically retakaful, have been
deliberated in a paper a little more than a year ago.17 For the benefit of participants who did not
have the opportunity to participate then, the gist of this fiqh are as follows:

• Giving precedence of the dharuriyah over the hajiyyah and also the tahsiniyyah
• Giving precedence to the certain maslahah over the uncertain maslahah.

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• Giving precedence to the big maslahah over the small one.

• Giving precedence to the maslahah of the group over the individual maslahah.
• Giving precedence to the lasting maslahah over the temporary or intermittent maslahah.
• Giving precedence to the fundamental and basic maslahah over the marginal and subsidiary
maslahah.
• Giving precedence to the potent future maslahah over the immediate weak maslahah.

Whilst these two types of fiqh point towards a much needed ijtihad in the takaful industry, they are
in need of support of the other jurisprudences.

Fiqh maqasid, for example, has attracted the attention of modern day fuqaha such Ibn 'Ashur, al-
Fasi, al-Sadr, al-Qaradawi, al-Butiyy, al-Raisuni, al-'Alim and Jamaludin 'Atiyyah after a long
hiatus of more than six hundred years.

Fiqh maqasid, or more accurately, the concept of maqasid al-shariah (objectives of shariah),
achieved its zenith as a discipline of knowledge during the time of al-Shatibi (d 790H) and was only
resurrected by Sheikh Tahir Ibn 'Ashur in the middle of the twentieth century. This was followed by
al-Fasi, who probably finished writing the book, “Maqasid al-Shari'ah al-Islamiyah wa
Makarimuha” when he was the Morocco's Minister of Islamic Affairs.18

Maqasid al-shariah aims to bring maslahah and in this respect al-Ghazali has proposed that it
consists of the preservation of five principles i.e. religion, life, reason, progeny and property which
is now popularly known as the khamsah al-dharuriyyah. However, many jurists nowadays have not
limited it to these and al-Qaradawi for example, has proposed for a review of it to include freedom,
equality and jusctice. Integrating the classical thinking with modern-day realities, Attia has
proposed that the khamsah al-dharuriyyah pertaining to the individual be extended to the realms of
family, the ummah and humanity.19 In the context of takaful, the one pertaining to the ummah is
very relevant. In this respect Attia proposed that the maqasid in this realm are as follows :20

1. Institutional organisation of the ummah

2. Maintenance of security
3. Establishment of justice

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4. Preservation of religion and morals

5. Cooperation, Solidarity and shared responsibility
6. Disemmination of knowledge and preservation of reason in the ummah
7. Populating and developing the earth and preserving the ummah's wealth

One can clearly see that takaful can fulfil most of the maqasid as expounded by Attia above. As to
the first intent, the shariah has adopted the notion that the shakhsiyyah ma'nawiyyah, in this case the
takaful operator, has an autonomous financial responsibility21 and may apply pluralistic models,
albeit within the framework of the same general Islamic principles with agreed-upon norms.22 In
this respect the international bodies such as the Islamic Financial Services Board (IFSB) and the
Accounting and Auditing Organisation of Islamic Financial Institution (AAOIFI) as well as national
regulators such as the Central Bank of Malaysia can, and of course are, playing their role.

Attia opines that the “maintenance of security is the intent of legal rulings which provide for the
protection of human life, honour and material wealth and legally prescribed penalties for their
violation”. Certainly their violations are considered crimes and this goes to show the seriousness of
the shariah in protecting them for the Quran has vouched that it is He Who provides with food
against hunger, and with security against fear.23

The establishment of justice is part of the maqasid al-shariah evidenced by the following Quranic
verses :
Allah doth command you to render back your Trusts to those to whom
they are due; And when ye judge between man and man, that ye judge
with justice: Verily how excellent is the teaching which He giveth you!
For Allah is He Who heareth and seeth all things24

O ye who believe! stand out firmly for justice, as witnesses to Allah, even
as against yourselves, or your parents, or your kin, and whether it be
(against) rich or poor: for Allah can best protect both. Follow not the
lusts (of your hearts), lest ye swerve, and if ye distort (justice) or decline
to do justice, verily Allah is well-acquainted with all that ye do.25

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O ye who believe! stand out firmly for Allah, as witnesses to fair dealing,
and let not the hatred of others to you make you swerve to wrong and
depart from justice. Be just: that is next to piety: and fear Allah. For
Allah is well-acquainted with all that ye do. 26

Say: "My Lord hath commanded justice; and that ye set your whole
selves (to Him) at every time and place of prayer, and call upon Him,
making your devotion sincere as in His sight: such as He created you in
the beginning, so shall ye return." 27

Allah commands justice, the doing of good, and liberality to kith and kin,
and He forbids all shameful deeds, and injustice and rebellion: He
instructs you, that ye may receive admonition.28

Now then, for that (reason), call (them to the Faith), and stand steadfast
as thou art commanded, nor follow thou their vain desires; but say: "I
believe in the Book which Allah has sent down; and I am commanded to
judge justly between you. Allah is our Lord and your Lord: for us (is the
responsibility for) our deeds, and for you for your deeds. There is no
contention between us and you. Allah will bring us together, and to Him
is (our) Final Goal.29

We sent aforetime our messengers with Clear Signs and sent down with
them the Book and the Balance (of Right and Wrong), that men may
stand forth in justice30;

The preservation of religion and morals means that the shariah emphasies both form and substance.
The forms, including rituals are important for the enhancement of ukhuwwah (brotherhood)but it
also ensures that the “doctrinal and devotional bond” among the ummah.31 the basis of this
objective is the words of the Prophet's s.a.w., “I have been sent to perfect noble traits of
character.”32 When Aishah was asked about the Prophet's s.a.w. Character, she said, “His morals is
the Quran,”33 Indeed the quran confirmed that the Prophet s.a.w. has the best of morals.34

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Cooperation, solidarity and shared responsibility which is another one of the maqasid al-shariah is
aptly captured by the definition of takaful by the Takaful Act 1984 which states that, “takaful means
a scheme based on brotherhood, solidarity and mutual assistance which provides for mutual
financial aid and assistance to the participants in case of need whereby the participants mutually
agree to contribute for that purpose.”. Indeed there are many verses of the Quran and the ahadith
which expounds this. Some of the Quranic injunctions are :

“Help one another in furthering virtue and God-consciousness (taqwa),

and do not help one another in furthering evil and enmity”35

“It is not righteousness that ye turn your faces towards east or west (in
prayer) but it is righteousness to believe in Allah and the Last Day, and
the Angels, and the Book and the Prophets; To spend of your wealth
inspite of love for it, for your kin, for orphans, for the needy, for the
wayfarer, for those who ask and for the ransom of slaves; To be steadfast
in prayer, and practice regular charity; To fulfil their covenant when they
make it, and to be firm and patient in pain (or suffering), and adversity
and throughout all periods of panic. Such are the people of truth, the God-
fearing”36

The ahadith that reflect the abovementioned objective are :

“The attitude of the believer and feeling of brotherhood to one another is

like that of the single body. When one member of the body is hurt, it will
have an effect to the whole body.” 37

“The relationship between one believer and another (in a community) is

like that of a building where one part of the building strengthened the
other parts.”38

“Each one of you has a responsibility and each one of you is responsible

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towards those under your responsibility.”39

“One is not judged as righteous until he cares for his brother as much
as he cares for himself.”40

“If any one does not have compassion toward others then he does not get
any compassion from Allah.” 41

“Allah always help those who helps his brother”42

“Verily a believer is one who can give security and protection to the life
and property of mankind”.43

“By Allah in Whose power I am under, one will not enter paradise unless
he provides protection to a neighbour in difficulty”. 44

“A person will not be counted as righteous if he sleeps comfortably on a

full stomach while his neighbour suffers from hunger”. 45

All the above are indeed the sources on which the principles of takaful are based on.

Disemmination of knowledge and preservation of reason in the ummah which is the next objective
of the shariah, is more important than in the individual and Attia quoted Ibn Ashur thus, “imbalance
or malfunction of the minds of entire communities and in the ummah as a whole is of greater
concern than imbalance or malfunction of the mind or reason of the individual.”.46 In this context,
Attia proposed that the ummah should not only be protected from intoxicants or drugs but from
biased media coverage as well since they manipulate the people's minds which is harmful.47 Not
only that, the shariah urges one to pursue knowledge and calls for clear reflection.48

The final objective of the shariah according to Attia is populating and developing the earth and
preserving the ummah's wealth. The former deserves a discussion on its own but the latter is
inherent in takaful. Indeed, takaful is often touted as a wealth preservation instrument.

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The overall maqasid al-shariah is to attract maslahah (benefit) and prevent mafasid (harm). In this
regard, al-Buti proposed that the principles of maslahah are five; the maslahah is within the scope of
the maqasid al-shariah, it is not against the Quran, it is not against the Sunnah, it is not against qiyas
and it does not neglect a more important maslahah.49 The five principles also relate to fiqh al-nusus
which must be seen in the context of usul al-fiqh (principles of Islamic jurisprudence) where the
adillat al-shariah (legal evidences50) are referred to when the mujtahid makes an ijtihad (juristic
opinion). Fiqh al-nusus refers to the divine texts must not be seen in isolation; it must be viewed in
the proper context as well. That is why the fuqaha (jurists) have developed a special study of the
Quran called asbab al-nuzul, the reason for revelation where it is necessary for a jurist to understand
the context of the revelation and together with the text, extract the maqasid, if it is not clearly spelt
out. The maqasid, subject to usul al-fiqh, is then applied to a different context. That is why al-
Shafie, famous for his qaul qadim and qaul jadid, had different opinions when he was in Iraq and
Egypt as the context was different. In this respect al-Jawzi aptly remarked that, “Changes in fatwa
are evaluated by changes in time, places, conditions and customs.”51

This brings us to the next type of fiqh; fiqh al-waqi' (reality jurisprudence). This is where tolerance
is important and sometimes a standised guidleine may not be appropriate. For example, one cannot
expect the fiqh in Malaysia to be exactly the same with that of the Indian sub-continent or the
Middle East at all times. Indeed, Muslims in the West may need a different fiqh altogether. That is
why Tariq Ramadhan came up with the book, “How To Be A European Muslim.”52, because the
reality in Europe is different from Muslim countries. That is why 'urf is considered a legal evidence
and the legal maxim, “Custom is the basis of judgement” is contantly invoked. In the context of
takaful, there should not be too much worry if there are different practices in different countries as
the priority now is not to stress on the differences but to look at how takaful in the different
jurisdictions can cooperate with each other and the harmonisation aspects can be tackled at a later
stage.

Fiqh al-waqi' however, should not become a hindrance to shariah advisors in the takaful industry to
come up with an opinion that may solve a future potential issue or problem. In this respect, fiqh
mustaqbaliyyat is very useful. In current literature, fiqh mustaqbaliyyat is usually term as fiqh
iftiradiyy (hypothetical jurisprudence)53 or fiqh taqdiriyy (estimated jurisprudence).54 It is admitted

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that most of the time the hypothetical issues were ridiculous and impoosible to happen. However,
although there are fuqaha that prohibit fiqh iftiradhiyy, an analysis shows that futuristic thinking has
been used throughout the development of fiqh.

For example, even during the time of the Prophet s.a.w., the sahabah have asked futuristic questions
and the were not critised for that. On the other hand, the Prophet s.a.w. answered their questions
patiently. For example, Al-Miqdad bin Al-Aswad (May Allah be pleased with him) reported: I said,
"Tell me, O Messenger of Allah, if I meet an infidel, and we fight together, and he cuts off my
hands with his sword, then hides from me behind a tree and (then) says he has submitted himself to
Allah. Shall I kill him after he has said it?'' He (saw) replied, "Do not kill him.'' I submitted, "But O
Messenger of Allah, he cut off one of my hands and only then he said it.'' Messenger of Allah (saw)
then replied, "Do not kill him, for if you do so, he will be in the position in which you were before
you killed him (i.e., he will be considered a Muslim and thus his life will be inviolable), and you
will be in the position in which he was before he made his testimony (i.e., your life will not be
inviolable, for his heirs can ask for Qisas)"55

Hudhayfah ibn al-Yaman also narrated that : People used to ask the Messenger of Allah
(peace_be_upon_him) about the good times, but I used to ask him about the bad times fearing
lest they should overtake me. I said: Messenger of Allah, we were in the midst of ignorance
and evil, and then God brought us this good (time through Islam). Is there any bad time after
this good one? He said: Yes. I asked: Will there be a good time again after that bad time? He
said: Yes, but in it will be a hidden evil. I asked: What will be the evil hidden therein? He said:
(That time will witness the rise of) the people who will adopt ways other than mine and seek
guidance other than mine. You will know good points as well as bad points. I asked: Will there
be a bad time after this good one? He said: Yes. (A time will come) when there will be people
standing and inviting at the gates of Hell. Whoever responds to their call will be thrown into
the fire. I said: Messenger of Allah, describe them to us. He said: All right. They will be a
people having the same complexion as ours and speaking our language. I said: Messenger of
Allah, what do you suggest if I happen to live at that time? He said: You should stay with the
main body of the Muslims and their leader. I said: If they have no (such thing as the) main
body and have no leader? He said: Separate yourself from all these factions, though you may
have to eat the roots of trees (in a jungle) until death comes to you when you are in this

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state.56

Applications In Takaful

During the course of 25 years, we in Malaysia have experimented with various products that
addressed the needs of takaful participants. The Al-Rahn Takaful for example, is unique in that it
caters to a niche market and not only helped a component of Islamic finance to grow but assisted
the common people to gain access to credit by unlocking their assets. The Long Term Fire and
Houseowner Takaful for example, has helped banks to manage their risks better and reduced costs.
These products were initially questioned because of probable gharar issues but now some takaful
companies may thinking of offering to their clients.

We have also obtained shariah approval to cover conventional loans due although initially it was
rejected on the basis of supporting the financial institution that is unIslamic. However, the maslahah
was greater, at least at that time and by applying the the principles of jurisprudence, it was later
approved, these were reviewed and later conditions were imposed.

The use of loading was also initially questioned as it was felt that fate does not allow one to
discriminate among different participants, but the principles of maslahah were applied and the
application of loading is now allowed as it is more equitable and the risks are lowered when
applied. In addition its use has resulted in a greater penetration of takaful.

The above lessons can be be beneficial in developing new products. Currently there is a sizable
market in some non-Muslim counries that may catalyse the introduction of takaful. In India for
example, the Muslim population is the second largest after Indonesia. With a Muslim population of
more than the population of Pakistan, the prospects of takaful are high. Similarly with China, whose
official Muslim population has not changed in the last fifty years, the growing number of Muslim
businesses and high net worth Muslims should trigger some interest. Even if the Muslim population
in China is stagnated, it is still more the number of Muslims in Malaysia.

One product that is much needed but has not caught on is Masjid Takaful. If 10% of all the masjids
in the world is covered with takaful, the contribution would be more than enough to cover losses,

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management expenses and profits to the operators. The question is how do we leverage on this? Not
all masjids are owned by Muslims; some are rented, and from non-Muslims and shariah advisors
need to decide whether these masjids can be covered by takaful. Having said that, the explosive
growth of the internet, coupled with principle-based regulations may be condusive for the
introduction of masjid takaful.

Another takaful product that is suitable to Muslims in minority-Muslim countries is one that
provides term cover for the purchase of burial plots. In some countries, burial plots are expensive
and need to be booked compared to burning in incinerators. To reduce costs, the funeral takaful can
be packaged with education or haj takaful. Under the haj education funeral takaful for example, the
haj may be performed by a shariah-approved person should the particpant dies before being able to
perform haj. In addition, a amount will be used to purchase the burial plot plus a considerable sum
to provide for tertiary education to the deceased participant's children.

A more urgent need for takaful is to cover conventional loans issued by conventional banks to
Muslims living or working in non Muslim countries. Shariah advisors need to decide whether
takaful can cover conventional loans from these banks and if so, on what basis? The mortgage and
credit takaful products would be for loan default due to death or permananet disablement whilst the
fire and houseoener takaful are for private dwellings and business properties. An umbrella cover
may also be provided for the properties and consequential losses. The application of fiqh maqasid
and fiqh waqi' may be the answer to the shariah-compliant development of this sector.

A similar issue to the above is retakaful cover of conventional insurance from risks insured by
Muslims in jurisdictions where there is no takaful. The application of fiqh aulawiyyat is more
relevant here and shariah advisors need to understand the implications of their decisions.

Other products that have not really developed are the group employee provident, endowment and
pension schemes, other employee benefits schemes and health related covers as well as reverse
mortgages possibly. The pension and provident sector is still in the domain of conventional
insurance whereas takaful has been around for more than a quarter of a century. Intensive
specialised real sector investment vehicles are needed to propel this market. In this respect the
application of fiqh mustaqbaliyyat coupled with shariah advisors playing a more proactive role,

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would augur well for the takaful industry by making concrete suggestions to the regulators through
takaful operators. Only then there will be vertical growth instead of horizontal growth.

An aspect that has not been explored by takaful companies is microtakaful, the exception being
takaful companies in less developed countries. Although the acquisition costs for microtakaful is
usually considered high, the low volatility makes up for the drawback. Furthermore, acquisition
costs can be kept low by working with established microfinance institutions by providing simple
free-cover limits takaful for death and permanent disablement. The SKS Microfinance founded by
Vikram Akula for example, has more than fve million members, 2.5 million borrowers and has
disbursed more than USD 700 million although it started with only USD 52,000 in 1996.

Conclusion

Takaful funds can be increased through innovative products, technical competence, shariah savvy
and ICT leverage. The assets of takaful companies and takaful funds stand much higher than what
SKS but we have not been able to fulfil the maqasid al-shariah of eradicating poverty, extensive
financial participation, sustained growth and equitable distribution of wealth. The spirit of takaful
can be achieved with all parties playing their effective role.

1 Sigma 3/2009
2 ibid
3 Berkshire Hathaway Inc, Annual Report 2008, 3
4 ibid
5 Warren Buffet described the insurance “float” as “money that doesn’t belong to us but that we hold and invest for
our own benefit.”
6
Hallaq, Wael B, Was the Gate of Ijtihad Closed?, International Journal of Middle East Studies, Vol. 16, No. 1 (Mar.,
1984), 4
7
Kamali, Muhammad Hashim, Methodological Issues in Islamic Jurisprudence, Arab Law
Quarterly, Vol. 11, No. 1 (1996),
8
ibid
9
Qaradawi, Yusuf, Al-ijtihad al-mu’asir baina al-indilbath wa al-nifirath, Dar al-tauzi’ wa al-nasr Islamiyyah
10
ibid
11
ibid
12
ibid
13
ibid

Azman Ismail 14
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14
Hallaq, Wael B, Considerations on the Function and Character of Sunnī Legal Theory, Journal of the American
Oriental Society, Vol. 104, No. 4 (Oct. - Dec., 1984), 689
15
Johnston, David, A Turn in the Epistemology and Hermeneutics of Twentieth Century Uṣūl al-Fiqh, Islamic Law
and Society, Vol. 11, No. 2 (2004), 233-282
16
Raisuni suggested that Shatibi aimed at fusing maqasid with usul al-fiqh. See Soualhi, Yunus. Maqasid al-Shariah and
Its Realisation in Contemporary Societies, International Islamic University Malaysia, Vol 3, 2006, 61
17 Azman Ismail, “Fiqh Aulawiyyat In Retakaful : Between RBC Standards and Islamic Financial Institutions.”, paper
presented at the ISRA Islamic Finance Seminar, 2008.
18 It was first published in 1963 by Maktabah al-Wahdah al-Arabiyyah
19 Attia, 116-149
20 Attia, 131-141
21 Attia, 132
22 ibid
23 Quran, 106 : 4
24 Quran, 4 : 58
25 Quran, 4 : 135
26 Quran, 5 : 8
27 Quran, 7 : 29
28 Quran, 16 : 90
29 Quran, 42 : 15
30 Quran, 57 : 25
31 Attia, 136
32 Related by Bukhari and Ahmad and authenticated by al-Hakim who said this is according to the criteria by Muslim
33 Related by Muslim
34 Quran, 68 : 4
35 Quran, 5 : 2
36 Quran, 2 : 177
37 Bukhari and Muslim
38 Bukhari and Muslim
39 Bukhari and Muslim
40 Bukhari
41 Bukhari and Muslim
42 Ahmad and Abu Daud
43 Ibnu Majah
44 Ahmad
45 Al-Bazzar
46 Attia, 138
47 ibid
48 For example, Quran, 2 : 44; 2 : 76; 3 : 65; 6 : 32; 7 : 69 etc
49 Al-Buti,
50 Usually translated as “sources of Islamic law”.
51 Al-Jawzi, 3 ; 4
52 Published by the Islamic Foundation, Leicester, 2005
53 Mallah, 1 : 126
54 Ibid, Qutb, 140
55 Bukhari
56 Muslim

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