I am sorry for the directness of approach but considering that we are the first FSA regulated supplier of Halal insurance products in the UK I was wondering if a) what your site policies were on company representatives present on the Forum and b) whether you might need "expert" info on the whole area of Islamic finance?

PS - I am a representative of Salaam Halal insurance...

Look forward to hearing from you...

Quite a dim view is taken of anyone who comes here as a company representative.

However, if you come here to give advice and if that advice doesn't involve mentioning who you work for, then I'm sure that the advice will be most welcome.

I agree Max but, dim view aside, what the heck is Halal Insurance?

What specifics of an insurance agreement would not be 'permissable' under Islamic Law?

I am intrigued...

Well I am a company representative but our proposition - Halal insurance products - has (and will continue) to generate quite a lot of debate in terms of how it works, what it means and so on...so my purpose here (as a completely transparent and visible representative) would be to field any questions, issues or concerns on the part of the consumer...

I hope that makes sense

Put simply Halal (or "permitted") insurance is an insurance product that conforms to Shariah (or Islamic) law. The specific mechanism we use to provide insurance is called Takaful.

The principle of Takaful has been used since the early days of Islam. The word comes from Arabic and literally means ‘guaranteeing each other.’ Unlike conventional insurance where an insurance company takes on all of the risk for all of the reward all Participants (policyholders) agree to guarantee each other and, instead of paying premiums, they make contributions (Tabaru’a). The pool of collected contributions creates the Takaful Fund.

The amount of contribution is based on the type of cover required and the personal circumstances of the individual Participant. As in conventional insurance, the policy (Takaful Contract) explains what cover and protection is provided and how to make a claim.

A Wakala Fee is payable by all Participants. The Wakala Fee is the proportion of the total paid which goes to pay the administration and operating costs of the providing Salaam Halal insurance. The proportion of the total paid as a Wakala Fee has been agreed by a group of internationally learned Shariah scholars. The Wakala Fee is not subject to Insurance Premium Tax

More information can be found on the Salaam Halal insurance site...

I hope this is helpful...

I've read this with great interest, and heard about this early on in the year.

To be completely honest, it looks like an absolutely great idea. An insurer not transacting in the conventional way with mutual protections giving savings and benefits to the policyholders. Principle Insurance have, cleverly so, picked up on an idea that has been around for quite some time and turned it into a new hype. With over 2 million Muslims in the UK, I can see this idea being quite popular with Principle's target audience. Unlike Sheila's Wheels, they have not restricted the clientele to one set of target audience from the outset. Halal insurance is open to anyone, but I would urge those considering an insurance policy to read through the terms and conditions carefully.

SalaamHalal, can you confirm that there are no warranties (expressed), endorsements, conditions (expressed) differing from that of the usual UK insurance policies. Obviously, the policyholders must be made aware of any significant differences before taking out the contract, as per FSA requirements. For example, Ansvar insurance previously declined to insure risks if the policyholder wasn't tea-total or failed to attend church; although now they offer further discounts for lifestyle conditions being adhered to.

Personally, I won't be choosing to insure with Halal Insurance, underwritten by Principle Insurance... yet. Some might argue that this is the best time but I cannot see the premiums being the most competitive out there as others that may provide better cover with a proven claims servicing record. As we all know, the proof is in the pudding so-to-speak. An insurance company's pudding is when the policy needs to be used - ie. claimed from. We all know that the usual suspects for cheap insurance premiums have a less than desireable claims handling process.

Salaam Halal Insurance has only been trading since 27th June this year, and Principle Insurance Company Limited since 23rd April this year. Mr Abdulaziz Hamad Aljomaih, Mrs Susan Patricia Bradbury , Mr Bradley Mitchell Brandon-Cross , Mr Andrew Charles Patrick Haynes , Mr Syed Mohammed Nadeem Mujtaba , Mr Imran Zafar Siddiqui have only been authorised since April of this year with no previous known history. The only other two other Directors (who are both Non-Executive) are the ones with the most experience at Directorship level Mr Dennis Holt & Mr Michael David Ross . Presumably Mr Holt and Mr Ross are both non-exec to give guidance to the others on the decisions to be made. Whilst I can appreciate that this is perfectly normal, it does worry me that they have commitments with other companies which could divert the attention from assisting the decision makers. Mr Ross has 9 other companies to which he is a non-exec director, and Mr Holt 4. I understand, however, that from reading the website the 'insurance professionals' employed by the company have a number of years experience in their field of insurance. This is encouraging and can only be a good thing. If only they had responsibility for Oversight and mediation, it might be more appealing. I'm sure with their support this scheme should prove quite successful. To make a suggestion, it might be an idea for the insurance professionals to use their designatory letters after their name to promote a good understanding in the subject matter at hand. I'm sure most of them must be FCII or ACII qualified?

The website is very professionally constructed with excellent features - such as logging in to the account and requesting a call back. I'd even go so far as to congratulate the marketing team on the 'WIN a fantastic holiday' advertisement. I absolutely despise this sort of marketing inticement usually, but with this specific example, there appears to be no sinister ploy behind it costing the customer more in the long run. It's also been clearly thought out as the holiday destination is something that will appeal to the target audience. Good stuff!

All being well, if this insurance company grows as much as the investors clearly think it will, they could be on to a winner. With this in mind, I can see the company going through radical changes after it's third year in business and I wouldn't be suprised if the top-brass walk away with a small fortune or branch out into other things.

Thanks for your interest Coyote.

In answer to your question we do maintain a clause under the accidental damage section where we disclaim against “loss or damage to your car as a result of a deliberate act caused by you or any driver covered to drive your car including but not limited to, driving under the influence of alcohol or non-prescription drugs.”

While this is not quite "standard" in the UK car insurance market we are certainly not alone in providing this condition, as I am sure you are aware.

Other than this, the Salaam Halal insurance Takaful contract has nothing unusual in it. There are certainly no restrictions regarding customer habits or behaviour.

I hope this answers your question.

Salaam Halal insurance

Hype is the word.

How much difference is there really between this and any other insurance policy?

The USP is the appeal to Sharia authority. Personally, sicne I don;t believe in magic or myth, I prefer my insurances USP to be price or service, not the word of god as mediated via a seventh century prophet who'd never heard of insurance and a team of eminent scholars.

Thanks for the comment.

In terms of the level of cover being offered to Takaful Fund Participants you are correct in saying that there isn't much difference to other "conventional" products - we offer the same protections and benefits but we offer them under a different, Shariah-compliant financial mechanism that appeals to Muslims and non-Muslims alike.

In terms of how the mechanism actually works there are fairly significant differences between Takaful-based products and "conventional" insurance products. The main ones are:

- Takaful contracts are based on an ethos of mutual co-operation

- Conventional insurance products maintain elements of risk, uncertainty and gambling

- Salaam Halal insurance Takaful contracts are indeed overseen by a committee of Shariah scholars who are responsible for ensuring that the principles of Islamic finance are upheld

- There remains full segregation between the Company shareholders funds and the Takaful Fund itself; in conventional insurance premiums received are typically considered to be income for the Company

- Any surplus in the Takaful Fund is shared among the Participants; in conventional insurance surpluses only accrue to Company shareholders

- Takaful is, effectively, a risk-sharing mechanism

Naturally we aim to provide Participants with the highest levels of service alongside a business-model that is designed to be competitive in such a cost-oriented marketplace.

I hope this response helps

Salaam Halal insurance

No it doesn't.

Forgive me saying this but I don't give a toss if something is Sharia compliant. Sharia has no particular relevance to me.

I do not recognise any of my conventional insurance contracts involving elements of risk or gambling; I pay a fee, it buys me peace of mind. There is no risk or gambling for me in such a contract. There is, of course, an element of risk for the shareholders in an insurance company, and I can see there being an argument that no-one who subscribes to Sharia law could be a participant in what amounts to a gambling enterprise, but, again, so what? I couldn't care less if the people who provide my insurance are Muslims, Hindus or believers in the flying spaghetti monster.

What happens to participants in the Takaful fund if the moneys in the fund aren't sufficient to pay all claims against it?

Well in that case Salaam Halal insurance products may not be right for you - unless you can see benefit in the overall Takaful mechanism without considering the Shariah aspects. We respect the fact that this may be the case for many consumers.

To answer your specific question if the Takakful Fund is assessed to be under-funded then we (not the Participants in the Takaful Fund) will arrange the Advance of funds to cover any deficit. Within the Takaful Contract there is an entitlement for us to recover any such deficit before any Participation Discount may be given to the Takaful Participants but we emphasise that individual factors such as No Claims Discounts will not be affected in any way.

All Takaful Participants are protected in exactly the same way as conventional insurance purchasers - we are regulated by the Financial Services Authority and we are a member of the Financial Services Compensation Scheme.

Hope helpful

Salaam Halal insurance

1. A conventional insurance contract is not gambling i.e like purchasing a lottery ticket. It is stupid to compare it to such activities and clearly not thought through by either the scholars or whom ever as they do not have a deep understanding of what constitutes gambling.

Its simple..the major differences between a conventional insurance contract and gambling are that a person who is actually gambling is someone who wilfully seeks out a risk that was not present in the first place ie a lottery ticket or betting on horses etc. These things are not natural to the daily economic life of the individual.

a. Insurance is concerned with those risks which are inherent in human life and business activities i.e car theft, fire in property etc It does not represent a wilful action of seeking out unnatural risk, it is simply covering one self for replacement should such a loss occur.

b. A gambler seeks profit but an insurer just wants protection so the motivations and ultimate benifits of both people are different.

c. Also the gambler receives nothing if he looses but the insurer receives peace of mind and security which is completely islamic.

I have made 3 points above and I would like you to convince me on the aspects above as to how insurance products amount to gambling. Your reasonings so far are illogical and I would hope to thing that most people on this forum are logical in their thinking.

2. Your insurance product in my view is only different in the way it invests its money (ie ethical industries) which is fundamental to making your product unique or shariah compliant - but you will find that many cooperative mutuals and other companies in general have ethical investment policies (may do not invest in alcohol, pork, gambling, sex and warfare industries).

3. In regards to uncertainty in the contract - you can never get rid of uncertainty in the contract and neither can you claim that your contract is free from uncertainty just because 3 scholars say so when its not the case. There is always some degree of uncertainty. As I understand it is only when there is a high degree of uncertainty in terms of what you will receive then it becomes un islamic (haraam). However the sum insured to be paid out is clearly defined so my argument is that how can their be uncertainty??????. Hope that my answer is clear and if your uncertain I can elaborate if needed.

Please answer all of the above 1 by 1. I can go into more detail with other points but please answer the above without stating 'that is your opinion' as this highlights weakness and demonstrates that I am correct in my views.

I look forward to your response - please use logical or clear arguments rather that this was said and thats why I believe it etc.

Regards