Mufti Muhammad Hassaan Kaleem has completed his Dars-e-Nizami (8 years Alim course) Takhassus (3 years Mufti course) from Jamia Darul Uloom, Karachi. He is a renowned figure in the field of Shariah, particularly in Islamic Finance. He is currently acting as a member of Shariah Board and Country Head of Shariah in Dubai Islamic Bank Pakistan Limited. He holds vast experience in matters of Shariah teachings and advisory as he has been teaching various courses in Islamic Studies and Arabic at Jamia Dar-ul-Uloom, Karachi for the last 17 years.
He has the distinction of being one of the earliest proponents of Wakala-Waqf model in the Takaful Industry of Pakistan, under the guidance of Mufti Muhammad Taqi Usmani being one of the pioneer members of this industry; he has been instrumental in the growth of Takaful not only in Pakistan but across the globe.
The Arabic root-word 'kafala' which means to guarantee, to help, to take care of each other’s needs. Takaful refers to mutual protection and joint guarantee. Operationally, Takaful refers to participants mutually contributing to the same fund with the purpose of having mutual indemnity in the case of peril or loss.
Uncertainty can never be eliminated; it remains in the Takaful Contract as well. But, since the Takaful contract comes under Tabarruaat, the uncertainty (gharar) is considered to be within tolerable limits under Shariah. Insurance, being a contract of exchange (muawadat), contains "excessive gharar" and is termed as fasid.
Risk or uncertainty can be divided into: Pure Risk and Speculative Risk. Pure Risk involves the possibility of loss or no loss. For example, damage to property due to fire. Pure Risks are the subject of insurance risk protection and Takaful. On the other hand, Speculative Risk involves the possibility of loss, no loss or gain. For example, venturing into a new business, or gambling on horse race. Speculative Risks that include a potential Gain or Profit cannot be insured. Takaful schemes use the principle of indemnification to compensate for the loss that occurs to a Takaful Participant. Takaful insures only Pure Risks and the claims are only payable in the event of Loss to cover repairs, damage, replacement of property, or an agreed fixed amount.
Takaful operators are mutual or cooperative entities. The goal of Takaful is community well-being and self-sustaining operations, not high profits. Under the Takaful Mudarabah Model, surplus (or profits) is shared fairly and equitably between the shareholders and the policyholders (i.e. the 'Participants'). Under the Takaful Wakalah Model, surplus is returned entirely to the Participants.
A Takaful scheme gives us an opportunity to practice the virtues of Islam, including self-purification. Surah AI Maa'idah (V.2) says: "Help one another in furthering virtue and Taqwa (God-consciousness), and do not help one another in evil and transgression". In a Hadith narrated by Ahmad and Abu Daud: Whosoever fulfils the intentions (needs) of his brother, Allah will fulfil his intentions. And Allah always helps those who help their brothers in need. The first Constitution in Medina (622 CE) arranged by Prophet Muhammed (PBUH) contained three aspects directly related to risk protection: social insurance for the Jews, Ansar and Christians; Article 3 concerning 'wergild' or 'blood money'; and provision for Fidyah (ransom) and 'aaqila'. We should follow his (PBUH) example to meet our needs and social obligations.
