Islamic insurance companies that take money from companies and then distribute the money at the end of the year and take their fees: what is the ruling on the work they do?
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The questioner : May Allah reward you, O Shaykh. Recently, insurance has appeared called Islamic social insurance. Its form is that a company collects insurance premiums from companies. If we assume, for example, that they collected one million riyals at the end of the year, the company takes its fees, settles the losses of some companies, and distributes the money to the companies from which it was taken. What is the ruling on this insurance?
The Shaykh : How do they take it?
The questioner : From a company, for example, ten thousand riyals. So if they collect, for example, one million riyals from the companies, they give the company that suffered a loss its loss, then distribute the remaining money to the other companies, and the company takes its fees. What is the ruling on that?
The Shaykh : What do you benefit from this insurance?
The questioner : You benefit by taking fees, meaning only that.
The Shaykh : And do you utilize this money?
The questioner : No, the money is returned.
The Shaykh : Because they utilize the money for a year, they utilize the money they took.
The questioner : They do not utilize it.
The Shaykh : Is it placed in the boxes?
The questioner : Yes, that is correct.
The Shaykh : I do not see anything prohibited in this. This is not prohibited, except that it is feared that people will be negligent in matters involving loss, in that if they know that this is guaranteed, they might become negligent.
The Shaykh : How do they take it?
The questioner : From a company, for example, ten thousand riyals. So if they collect, for example, one million riyals from the companies, they give the company that suffered a loss its loss, then distribute the remaining money to the other companies, and the company takes its fees. What is the ruling on that?
The Shaykh : What do you benefit from this insurance?
The questioner : You benefit by taking fees, meaning only that.
The Shaykh : And do you utilize this money?
The questioner : No, the money is returned.
The Shaykh : Because they utilize the money for a year, they utilize the money they took.
The questioner : They do not utilize it.
The Shaykh : Is it placed in the boxes?
The questioner : Yes, that is correct.
The Shaykh : I do not see anything prohibited in this. This is not prohibited, except that it is feared that people will be negligent in matters involving loss, in that if they know that this is guaranteed, they might become negligent.