Jurisprudential and Legal Principles Governing the Takaful Insurance System

Takaful, a form of Islamic insurance, is formed on the basis of mutual participation between insurance companies, whereby individuals collectively participate in compensating for potential losses or damages. This financial instrument is well-known not only in Islamic countries, but also in many non-Islamic countries, with Malaysia being a pioneer in this field due to the rapid growth of this industry. However, the industry's increasing growth and associated complexities have rendered existing laws and regulations incapable of fully meeting the needs of takaful. Furthermore, the conservative approach taken by governments in formulating regulations for implementation in society has reduced the flexibility of these laws and created special conditions in private takaful contracts. These conditions, which are established in the form of specific contracts between insurance companies and policyholders, are among the most controversial issues in jurisprudential and legal matters. This descriptive-analytical study, based on desk research, and in conjunction with the concept of takaful, analyzes this question: What are the jurisprudential and legal principles that can govern takaful insurance? The research results show that takaful contracts are directly linked to the public interest and the country's economy. In the absence of documented principles and rules, these contracts may be invalid, unenforceable, or outside the framework of takaful. This article, while reviewing takaful insurance laws in Malaysia, analyzes the principles and rules governing takaful contracts.