Sharia Board Rulings — Insurance

• Comprehensive cover on a financed vehicle may be included in the cost — and profited on — provided the cover is with an Islamic takaful company.
• While Islamic insurers exist, the bank may not use conventional insurers for staff health cover or for vehicle cover.
• Insurance may not be financed separately from the sale, because a takaful contribution is money and money is not itself a subject of financing. The bank may act as administrator and broker for a market-rate commission, with nothing added for advancing the premium.
• The bank may not be the beneficiary of a conventional policy taken out by a customer; but where the customer alone takes out the cover, receives the proceeds and pays the bank, the bank may collect its debt.
• The bank may not act as agent for an institution founded on conventional insurance.
• A conventional policy naming the bank as first beneficiary may be accepted as a pledge securing facilities, documented as such. Goods financed by murabaha, ijara and the like must be covered by a takaful company, per the Central Bank's advisory body.
• Where takaful cover is unavailable, or the takaful insurers decline, a conventional policy may be accepted as a pledge — limited to the need and for the shortest possible period.

The full Arabic text of every question and ruling — including the Board's answers to customers on honesty in insurance claims — is published on the Arabic version of this page. The signed original is below.