Below are answers to some commonly asked questions regarding Zayan Takaful and it's products:

The fundamental principle of insurance is not forbidden in Islam, rather it is encouraged. However, today most conventional insurance companies define insurance as, “the transfer of risk” from the insured to the insurance company. Consumers then pay the insurance company (the “premium”) for assuming the risk on their behalf. Islam however defines insurance as, “the sharing of risk” in which participants all agree to subsidize each other’s risks through a pool of contributed funds. In the event one of the members has an unforeseen incident that involves a loss, monies from this pool are used to help carry the burden of that loss. In conventional insurance payment of a loss comes from the insurance company’s own funds. It is this core principle that makes Takaful Insurance accepted under Shari’ah Law and its conventional equivalent forbidden. Along with this, conventional insurance companies invest in financial instruments which contain elements of interest and in industries which do not meet the guidelines of Shari’ah compliance (i.e. gambling, pork, alcohol). Please visit the Knowledge Center for a more detailed explanation.

• The insurance provider must segregate the participant’s pooled funds from the companies other assets.
• The insurance company must play the role of an administrator that oversees the underwriting, operations and investments of the pooled funds.
• No part of monies invested may be commingled with investments that fall outside the boundaries of Shari’ah law, i.e. interest, alcohol, pork, weapons, etc.
• All financial transactions should be conducted in a Shari’ah compliant manner and must be overseen by the Shari’ah Supervisory Committee.

In short, yes. As with all Islamic Finance and Banking products, their core functions are to act as socially and economically just modes of doing business. Takaful is no different. Takaful policy holders participate in an agreement with other consumers who have common goals and goals of mutually sharing risk in providing protection to the collective group. The Takaful product provides an environment where mutual solidarity and protection is possible, with no strings attached.

Similar to conventional insurance, the Takaful Insurance program invests the pooled contributions of its members, however unlike its conventional counterpart, Takaful investments avoid all interest bearing financial instruments. These instruments all too often delve into such things as: speculative risk, interest rate options, naked equity options, futures trading and various other transactions which are specifically designed to hedge investments. These types of instruments are irresponsible as they are completely speculative. Along with the avoidance of these types of investments, Takaful also avoids any investment in other socially irresponsible sectors such as; gambling, alcohol, tobacco, pornography, debt and weapons – all sectors which undermine health and safety.

Zayan Takaful is the exclusive provider of Takaful solutions in the United States. Zayan has built it’s reputation and brand on a never ending commitment to social responsibility and Shari’ah compliance. These core principles are never compromised as Zayan continues on its quest to meeting the unmet banking, insurance and finance needs of the Muslim American market. We stand behind our founding principles of bringing the best products to our market and delivering them with the highest level of service excellence and price competitiveness. Zayan Takaful’s sales associates are extremely knowledgeable and are well suited to custom tailor a Takaful policy that meets your needs.

In short, yes. Shari’ah law does not prohibit conventional insurance companies from offering Takaful or any other Shari’ah compliant products, provided that they take the necessary steps to segregate their Takaful activities from their conventional insurance business. Conventional insurance companies would also need to seek the guidance of respected Shari’ah scholars to oversee the development and approval of Takaful products. These scholars make up the Shari’ah Supervisory Board and collectively approve each product by conducting an extensive review prior to the product being made available for the market.

The Shari’ah Supervisory Board members that approved the Takaful Homeowners Policy offered by Zayan Takaful are world renowned experts who advise many of the largest financial institutions about Shari’ah compliance. They are:

• Sheikh Nizam Yaquby (Bahrain)
• Dr. Mohamed Ali Elgari (Saudi Arabia)
• Dr. Muhammad Imran Ashraf Usmani (Pakistan)

The role of these scholars is to supervise the development of Takaful products. They are the Shari'ah Supervisory Committee of Chartis Takaful Enaya, a member of Chartis, Inc., who developed this product.

In the event that a Takaful policy participant has to file a claim, they can be assured that they are protected by one of world’s top insurers. Lexington Insurance Company is the largest Surplus Lines carrier in the United States with over $9 Billion in surplus funds as of the third quarter of 2008. Their parent company, Chartis during the same time period had over $26 Billion in surplus funds. The next closest company was travelers insurance with $21 Billion, followed by the Hartford in a distant third at $12 Billion.

In the event that the participant of a Takaful policy suffers a loss, it would be covered through the Takaful Protection Pool that is made up of the contributions made by all the participating members. If the Takaful Protection Pool is not capitalized enough to offset claims, the pool administrator, (“Wakeel”) Lexington Insurance Company, will make an interest free loan to the Takaful Protection Pool (“Qard Hasana”) to offset the shortage. In the event that during a policy period the pool reaches a level of capitalization wherein there is a surplus after paying all claims, expenses and liabilities,than the money left over would be donated to charity.

The Chartis Takaful Enaya Shari'ah Supervisory Board responsible for overseeing the Shari’ah compliance of the product has approved UNICEF and the American Red Cross and Red Crescent Societies to receive any surplus funds.

The insurance company in a Takaful structure acts as a Wakeel, or an agent on behalf of the pool members. The operator manages all the day to day tasks and responsibilities associated with the policies, and manages the investment of the Takaful Protection Pool funds. The Wakeel is entitled to receive compensation for these services.