The International Council of Fiqh Academy, which is an offshoot of the Organization of Islamic Conferences (OIC), in its 16th session in Dubai (United Arab Emirates), which was held on the 30th of Safar to the 5th of Rabi’ al-awal 1426 A.H., corresponding to 9 to 14 April 2005, after reviewing the researches that were presented to the Council concerning the topic of health insurance and after listening to the discussions that revolved around it, resolved on the following:
Definition of health insurance
The contract of a health insurance is an agreement, in which a person undertakes to pay a certain amount or a number of instalments to a particular organization, on the premise that that organization will cover his medical expenses for a pre-determined period.
Forms of medical insurance
A medical insurance contract may be made with a hospital or with an insurance company that plays the role of a middle person between the insured and the institution that offers the treatment (hospital).
The ruling on health insurance
1. If the health insurance contract is concluded directly with the hospital, it is permissible. However, certain guidelines must be observed, such as ensuring that the ambiguities or gharar is minimized and the need for health insurance is apparent that it can be considered as a daruriyyat matter, because of its connection with the protection of life, intellect and offspring, which form part of the five essentials that the Shari’ah seeks to preserve. Apart from that, several conditions must be fulfilled, as follows:
a. The responsibilities of the contracting parties must be comprehensively defined;
b. A study on the health condition of the insured, as well as his probable future health conditions must be conducted; and
c. The contractual relationship between the organization seeking insurance and the health institution must be direct and no conventional insurance company is involved, so that all medical bills are forwarded straight to the said organization.
2. If the health insurance is from an Islamic insurance company (takaful or ta’awun - mutual assistance), which manages its activities in line with the guidelines of the Shari’ah, which the Council have recognized in its resolution no. 9 (2/9) regarding insurance and reinsurance, it is permissible; and
3. If the health insurance is provided by a conventional insurance company, it is not permissible, as clearly mentioned in the above resolution.
Supervision and monitoring
It is the responsibility of the respective authorities to supervise and monitor the practices of health insurance, to ensure that it will realize justice, prevent manipulation and exploitation, and protect the rights of the insured.
The Council hereby recommends the following:
1. Invite Islamic governments, charitable foundations and waqf (Islamic trust) institutions to provide health insurance coverage for free, or for a minimum charge, to those that are not capable of obtaining Islamic health insurance from the private sector;
2. Medical cards are not to be used, except by bona fide owners, as the contrary would tantamount to a breach of contract. It is also a form of cheating and deceit;
3. Warning against misuse of health insurance, like claiming to be ill or concealment of illness or making complaints that are actually in contrary to the real situation;
4. Inclusion of the topic of mutual insurance (Islamic or takaful) in the future sessions of the Council, in light of the conclusions reached in the recent conferences and symposiums and the various applications that emerged after the Council’s previous resolutions.
Allah knows best.