Post by Sapphire Capital on Jul 29, 2008 2:30:43 GMT 4
Britain's first Shari`ah-compliant insurer was launched on Monday, July 28, offering policies in line with the Muslim faith and becoming the latest financial body complying with the rules of Islamic finance in the European country.
"Salaam Halal insurance is the UK’s first dedicated Islamic insurance provider set up to provide Islamic insurance based on the Shari`ah principle of Takaful," the new firm says on its website.
"Now you can have great value insurance, without compromising the principles of your faith."
Salaam Halal Insurance uses Takaful principles, which are based on mutual cooperation in the sharing of risk and addresses key features associated with conventional insurance that is incompatible with Shari`ah.
People taking out a policy with Salaam Halal pay contributions into a pool, with that money then put into Shari`ah-compliant investments.
The central pool of funds is used to pay any claims that arise, and at the end of the year, if the pool is over-funded, the excess will be distributed back to policyholders through a discount on their next premium.
Salaam Halal plans to launch home insurance policies by the end of the year.
Islam forbids Muslims from usury, receiving or paying interest on loans.
Islamic banks and finance institutions cannot receive or provide funds for anything involving alcohol, gambling, ography, tobacco, weapons or pork.
Shari`ah-compliant financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.
Salaam insurance, which is authorized and regulated by Britain's Financial Services Authority, says its policies are mainly aimed at the country's sizable two million Muslim population.
"Salaam Halal insurance is the UK's first insurance provider dedicated to providing insurance tailored to meet the needs and beliefs of the British Muslim community."
But the policies are also designed to appeal to non-Muslims who are interested in products of an ethical or co-operative nature.
The company officials believe their firm's launch will further boost Islamic finance in Britain.
"The launch of Salaam insurance -- the first independent, fully Shari`ah-compliant Takaful operator available in this country -- is a significant step for the growth of Islamic finance in the UK," said Chairman Abdulaziz Hamad Aljomaih.
In recent years, London has established itself as a hub of Islamic finance.
There are four licensed wholesale Islamic banks - the only ones in the European Union - in London.
The British capital is also home to 21 conventional banks offering Islamic banking products, the newest of which is Gatehouse, which has received its license in April.
The British government is also planning to issue sovereign Islamic bonds.