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The core issue of the project from an Islamic jurisprudence perspective is that the project's engagement with prohibited activities is 100%, as the entire business model is based on traditional commercial insurance.
Clear fatwas have been issued declaring this sector as haram by major jurisprudential bodies (such as the International Islamic Fiqh Academy and the Permanent Committee for Scholarly Research and Ifta) based on three legal considerations:
1. Extreme Uncertainty: Commercial insurance and reinsurance contracts are financial exchange agreements based on probability and risk; the parties involved do not know at the time of the contract exactly how much they will give or receive, and profit and loss depend on the occurrence of events by chance.
2. Usury in both forms (deferred and excess): The mechanism of commercial insurance fundamentally relies on exchanging cash for cash (insurance premiums in exchange for monetary compensation in the event of an incident) with inequality in amounts and delays in time. Moreover, traditional insurance companies invest their surplus funds and financial solvency in usurious instruments (bonds and bank returns) to ensure their growth.
3. Absence of a cooperative approach: The protocol does not engage in "Islamic cooperative insurance" (which is based on mutual donations and portfolio management without targeting profit from the same risk), but rather feeds purely usurious commercial insurance companies operating under conventional financial laws.
The core issue of the project from an Islamic jurisprudence perspective is that the project's engagement with prohibited activities is 100%, as the entire business model is based on traditional commercial insurance.
Clear fatwas have been issued declaring this sector as haram by major jurisprudential bodies (such as the International Islamic Fiqh Academy and the Permanent Committee for Scholarly Research and Ifta) based on three legal considerations:
1. Extreme Uncertainty: Commercial insurance and reinsurance contracts are financial exchange agreements based on probability and risk; the parties involved do not know at the time of the contract exactly how much they will give or receive, and profit and loss depend on the occurrence of events by chance.
2. Usury in both forms (deferred and excess): The mechanism of commercial insurance fundamentally relies on exchanging cash for cash (insurance premiums in exchange for monetary compensation in the event of an incident) with inequality in amounts and delays in time. Moreover, traditional insurance companies invest their surplus funds and financial solvency in usurious instruments (bonds and bank returns) to ensure their growth.
3. Absence of a cooperative approach: The protocol does not engage in "Islamic cooperative insurance" (which is based on mutual donations and portfolio management without targeting profit from the same risk), but rather feeds purely usurious commercial insurance companies operating under conventional financial laws.