The Ruling on Cooperative Insurance and Compulsory Insurance

Question:
May Allah reward you, Honorable Shaykh. This questioner asks: What is the ruling on what is called cooperative insurance? And what is the ruling on the compulsory insurance for car drivers, which requires them to pay three hundred and sixty riyals in Ramadan, where the driver pays for the guard the damage he caused to the car of al-Ghayth?

Answer:
This is not cooperative insurance; this is a commercial generalization. This is a forbidden commercial generalization. Cooperative insurance is what resembles charitable associations. Charitable associations: people of good donate, their donations are collected and developed through legitimate development, and if someone needs help, they are assisted from this association with aid for the needy and the indebted. This is the cooperative insurance about which the scholars have issued rulings, and it means charitable associations whose purpose is not investment for the donors, but rather assisting the needy, and nothing returns to the donors except reward and correctness. Yes.