Islamic Insurance Law - Dissertation Example

Conventional insurance has been a taboo for the Muslim world as the premium insurance companies offer, lack of correct knowledge by their customers and the way cost of damages has to be borne by some unconnected persons had hitherto been debated. Scholars have argued that the prevalent insurance system is not Shariah compliant as it involves uncertainty, gambling and riba (interest). Insurance companies take people's money and promise to give them back if a certain loss happens which involves a delay in the money dealing which makes it non-Islamic transaction.

This means that 23% population of the world does not gel in the global finance system and gets no security in the case of any unforeseen damage. The growing socio-economic situation of the world has made it inevitable to drive a system which minimizes the risks but current interest-based insurance system is conflicting to the teachings of Shariah- the Islamic law. Takaful is the Islamic insurance system which has now taken its roots for more than two decades. It integrates the principles of Shariah with modern economics by mitigating the risks attached.

Takaful industry is vibrant and growing on an enormous pace with a growth rate of 20%2. In the following dissertation, I have presented my research about Islamic insurance, how it works, its growing popularity and the need of its development Islamic as-well- as in non Islamic countries such as UK and Saudi Arabia. I have