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Daily Insurance Industry News
Tuesday 11th of December 2018
May 1, 2008

Shariah compliant Principle Insurance approved by FSA

by Richard Kilner

Story link: Shariah compliant Principle Insurance approved by FSA

The Financial Services Authority (FSA) has given the green light for the UK’s first independent Islamic insurance company to be created.

The new firm, Principle Insurance, is to offer both home and motor insurance that is in accordance with Shariah principles.

Principle’s target market will be the two million Muslims in the UK, who until now have not had the option of choosing an independent insurance provider whose policies are Shariah compliant.

The firm will improve the perception of Islamic law in the UK through its sensible and progressive approach, according to chairman Abdulaziz Hamad Aljomaih.

Aljomaih went on to say that the approval granted by the FSA was a sign that a company could act in accordance with both Shariah principles and modern day business practices.

The firm will not invest money in businesses contrary to Islamic thinking (such as breweries), nor will it use interest.

However, there are a number of similarities to the methods adopted by co-operative insurance, such as policyholders making financial contributions to the Takaful fund, which serves as a common pool of money.

An overflowing Takaful will lead to money being given back to policyholders, with shortfalls protected by shareholders.

 

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