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Shariah compliant insurance company launched

10:10am Tuesday 29th July 2008

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Britain's two million Muslims will now be able to take out motor insurance that complies with their faith, with the launch of the UK's first independent Islamic insurance operator in the UK.

Salaam Halal insurance will offer Shariah-compliant motor insurance and there are plans to launch a home insurance product before the end of the year.

About Takaful - how does it work?

Takaful is a new concept in the UK because, unlike conventional insurance where the risk is shifted from the policyholder to the insurance company, Takaful is a structure in which risk is shared between all policyholders.

Takaful insurance allows participants to pay their contribution into a pool (Takaful Fund). The pooled contributions are invested strictly in Shariah-compliant investments (i.e. not in interest bearing investments or investments linked to prohibited goods and activities such as alcohol or pork) and any investment profits are distributed back to the Takaful Fund.

The fund is used to pay claims, and at the end of the year, if the Takaful Fund is over-funded it is then distributed back to Policyholders as a Participation Discount on their next year's premium. This will be in addition to any conventional No Claim Bonus.

Mr. Abdulaziz Hamad Aljomaih, Chairman of Salaam insurance commented: "The launch of Salaam insurance - the first independent, fully Shariah-compliant Takaful operator available in this country - is a significant step for the growth of Islamic finance in the UK."

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Shamas, Manchester says...
10:59am Tue 29 Jul 08

Well, another money making scheme using "Shariah" law to C--- simple minded people.

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Muslim, Blackburn says...
10:28am Wed 30 Jul 08

Well said my friend Shamas u r correct all these people are after is making money for themselves. I mean take the Amanha Mortgage (HSBC) they call that the halal mortgage n yet its exactly same as a normal mortgage and the difference is they changed the word Intrest to Rent and also put a higher apr rate onit. I mean if it was really halal then they would only take back the amount they lent in stead they r taking double that. These people jus make me sick coz they using our beautifull religion and make money out of it. Anyway like they say wot goes round comes round they makein us fools but God will get them back..

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Asif, Manchester says...
5:26pm Thu 21 Aug 08

I fail to see how Salaam Insurance can have a true Takaful product, in essence it has to run as a true mutual. All we are seeing here is a 'badged' and glossed over Shariah insurance product. What is the world coming to, taking advantage of our faith and principals to present, an unethical product and none compliant SHARIAH product. Main stream UK insurers behind such schemes, often will invest in interest baring bonds, you cannot control where they seek to get best returns on their investments. Plus Re-insurers who take the risk from the mainstream lead insurer to disipate risk, will also not be Shariah compliant. To complicate matters, you can get a reinsurer of re-insurer in the chain of risk pooling. An earlier commentator mentions HSBC, Amanah finance have Hamilton as the insurer, they often work with affinity groups and were well known previously for being the insurer for Payment Shield for Mortgage Payment Protection Insurance (MPPI) - I fail to see how Hamilton would have a Takaful fund. Often Muslims are behind and fronting such schemes, now with the grace of God if they are not Shariah compliant then whos conscience and actions will be in question. Yes the unwitting public has bought a Shariah product with utmost good faith, the responsibility now is with the seller or product provider....

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max, preston says...
4:54pm Tue 21 Oct 08

im bit sceptical about islamic finance whatever it may be. u have to remember theres in islam your are allowed to make profit. so the above personn who has said that u should just pay back exactly what u borrowed is bit naive. what u have to remember is that in order for them to offer u a halal mortagage they have to be able to sustain the business at the same time. plus in islam u are allowed to make a profit so you have to be real. also islamic finance has been around for years so its nothin new, take a look at muslim countries.

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