Indonesia, The Center of World Islamic Law Insurance (1)

Islamic Law insurance is getting more develop nowadays. Since it was published in 1994, up to now, the amount of Islamic Law insurance industrial gets into hundreds branches that are spreading along Indonesia. Moreover, the market demand that is still under 5% will be more develop in the future.

Muhammad Syakir Sula, a practician and consultant of Islamic Law Insurance explains that seeing the fast growth of it, Indonesia has a good potential to be the center of Islamic Law insurance.
It is caused by the big potential and support that Indonesia has. By the amount of Islamic people that reach up to 85% more than 230 people, it becomes the biggest market in the world for Law Islamic insurance industrial.
“Now, the challenge is make the Islamic people sure to know it more. Because the advantage is totally great if it is compared with conventional insurance,” said the General Head of IIIS (International Islamic Insurance Society) to Syahruddin El-Fikri from Republika.

Here are the quotation of interview with that man who was born in Palopo, South Sulawesi, at 12 February 1964.

Can you please explain the history of how insurance term born in Islam?
An activity similar with insurance had been exist since the beginning of Islam. Explicitly, there was no special hadits mentioned about the word insurance (at-ta’min). For instance, qala Rasulullah SAW, at-ta’min halalum (insurance is legal), was never mentioned. But there was an activity similar to insurance. For instance aqilah system as mentioned by Syekh Ibnu Hajar Al-Asqalani in Fath al Bari. As told in the story of Bukhari, since then, that system became a part of Islamic law. Since then also, aqilah system that is similar to insurance activity was done.

How is aqilah activity?
Aqilah was actually done by Arabic people in Pre-Islamic era. At that time if there was a member of family that was passed away and still had a duty, for instance did a murder, so the other members of that family must pay the fine (diyat). Besides that rule, the other rules that can be used as the hint is the needs of the people in this modern era. It is difficult to avoid insurance activity. Almost all workers, labors, employees, soldiers, and others are automatically insurance to Working Insurance, Life Insurance, Social and Working Insurance, and Ground Forces Insurance. For the Government Officials, the one that handles their retirement and health guarantees is Life Insurance and Retirement Fund Insurance. For Private employees and State Owned Corporation, the health guarantees is managed by Insurance. The owner of driving license, or people who are travelling by plane, ship, train, pay highway, or going to a recreation places like Ancol, Taman Mini, all are automatically including into Life Insurance. Even, in some district like Depok, all inhabitants that have Identity Card must be included into the Death Insurance. In Bontang, all poor inhabitants that have Identity Card are covered by Death and Health Insurance done by the local government. Poor Inhabitants in Indonesia can ask free health service to the hospital based on the fund from the government in cooperation with Health Insurance. That’s why, it is really difficult to avoid insurance. In short, insurance has been a main need, for soul, health, property, etc.

But there are some Islamic leaders who have a perspective that insurance contains maisir (gambling), gharar (unclear), and riba (exceed)?
That’s right. That’s why, the Islamic leaders and the Islamic Law Insurance Experts think hard to find the solution in order to omit the illegal things happened in conventional insurance. Even by seeing about the maslahah ( the use/ the benefit), some Islamic leaders allow the conventional insurance, especially the social insurance. And because there was not before, even it was allowed but only in emergency reason. And now,because the Islamic Law Insurance are getting more and more, absolutely the rules are different.

Globally, since when the term of Islamic Law Insurance appeared and started to apply by modern system as done now on, including in Indonesia?
Insurance system or ad-diyah ala al’aqilah had been available since the era of Muhammad Prophet. Then it was always available in heredities still in the implementation of Islamic Law up to the last caliph that was Caliph Utsmaniyah in Turkey that was conquered by Kemal Attaturk in 1920s. After that, aqilah system was gone. Then at the Islamic Economical Conference in 1976 in Makkah and Majma’ al Fiqh al Islami al ‘Alamiy (The United of Figh Islamic Leaders in the World) in 1985 decided that conventional insurance we know along this time opposite to the Law or illegal and recommended to build ta’awuni insurance or takaful (Islamic Law Insurance). In responding to the Islamic leaders decision, in 1979 Islamic Law Insurance was introduced for the first time in modern version signed by the build of Islamic Insurance in Sudan. And in Indonesia, the first Islamic Law Insurance that was introduced was Takaful Insurance since 1994, about 2 years after the build of Indonesian Muamalat Bank. Now, Indonesia has had 39 insurance companies that operate based on the Islamic law from 50 companies that has recommendation from DSN MUI.