The significance of this thesis does not appear in its nature as being a comparative evaluation and analysis of the doctrine o f insurable interest under each law o f the selected legal systems. Nor, does it seek to justify the rejection o f life insurance and commercial insurance by Islamic Law as being "Hararri\ but rather to benefit from the developed selected laws in order to develop the CCL 1931 [SA.] in respect of marine insurance and to formulate a model o f insurance which complies with the Islamic principles.
Therefore, the thesis will introduce a hypothesis, as a substitute formulation o f the insurance contract in its original form, and will try to examine it, evaluate it and justify it in a separate chapter. But this will be preceded by exploring how the doctrine of insurable interest, as a criterion which distinguishes insurance from gambling and wagering, currently operates since its emergence in the 18th century in the UK up to the present time.
The hypothesis of this thesis is intended to be a form o f solidarity between members o f a certain group to cooperate with and guarantee each other where one o f them suffers a pecuniary loss that may threaten his/her economic status in the sphere o f the Islamic rules and that is based on an order in Quran which sets out,
([2] ... Help you one another in Al-Birr and At-Taqwa (virtue, righteousness and piety); but do not help one another in sin and transgression. And fear Allah. Verily, Allah is Severe in punishment).19
Furthermore, it will establish a formulation o f insurance that based on the principles o f the Islamic law, and it is the following:
A group o f people share a common or similar interest such as owning ships, importing/exporting goods, car drivers or any other society, join a club, union or any association through a contractual relationship, where a joined person pays a sum of money or premium, annually or in any other mode of payment, to the association for the purpose o f being indemnified for a particular loss(es) by the latter at the time of the occurrence o f the loss(es) and the indemnified member will be obliged to pay back what exceeds his/her total payment by either increasing the subsequent premiums or by monthly payment subject to the status o f the member, the duration o f the contract and other conditions set out in the contract. The member of such association aims to avoid any liability or pecuniary loss immediately after the proof of the liability upon the member's shoulders. In other words, the member aims to shift the loss to all other members' shoulders.
In order to crystallise the idea, the following scenario, hopefully, clarifies it:
Suppose, A is a car driver and he joins B, a club . A pays £400 a year and he has *)(\
not made a claim for last five years. In the sixth year, A had a car accident and he
19 Surat Al-Maibah, VI, verse 2.
suffered (£1000) of damage to be paid to a third party. According to the contractual relationship, B indemnified A for his loss and paid the third party £1000 in full. Now, A has paid six premiums, which totals £2400. However, due to the indemnity, B owes A £1400.
Six months after the first claim, A suffered another loss and had to pay £3400 to another third party. Under such circumstances, B indemnified A for the second loss.
Therefore, A owes B £2000. In this case, A has to pay back £2000 to B either by increasing the subsequent premiums, that A pays £600 a year, or more, instead of
£400, or the premium remains £400, but A pays £100 every month, subject to his/her income, the duration o f his/her membership and the conditions of the contract.
If A decides to leave the club or the association, he has the right to get his money back if B, by the time of his decision, still owes A sum o f money. Likewise, if the latter dies, his heirs or legatees have right to get the sum of money remains with the club or association for the testator or legator. The club or the association, on the other hand, has right of lien.
In respect o f commercial transactions such as carriage o f goods by sea or air, since the capital sums of such transactions are usually large, the position needs special arrangements and that could be arranged by specialised people in this field.
As far as the establishment o f such association is concerned, there are different ways to achieve it, either by being considered by a government, by members of a
20 B is not an individual character. It is, nevertheless, a representative o f the members.
particular field such as traders or by a company which practices insurances. In contrast to the other ways, the company can charge an annual fee on a member who wishes to join its membership as an administration fee. That fee will constitute a non- refundable premium. In other wards, the company will play the same role as the said club or association or even the government does. Thus, if one member pays £400 premium, which is refundable, per annual and £50 annual fee to the company the fee will not be refundable as it is an equitable right o f the company.21 The total payments of the premiums, however, will be still refundable if the member does not want to renew his membership so long as he has fulfilled his duty to pay the applied annual fee to the company and he is not required to pay any sum of money that exceeds his total amount o f the paid premiums where he has been indemnified for his loss(es) to the company, but the paid fees will not be refundable.
So, if the total number of the members is 10,000, the company will earn £500,000 every year and as many members will join its membership as much it will earn and that will allow a strong competition to take a place between wide range o f companies which practice insurance or indemnity and will encourage each company to present as much improved services as it could to customers.
21 The company could provide facilities for those fees such as providing an insured a car while his car is being fixed or provide an accommodation for an insured who suffers fire loss to his house for some time or providing legal consultancy services. In other words, the company will provide special services, apart from selling its membership and its administration. In addition, the contract between the company and one member could be described as a contract o f lucrative bailment under Sharia. Therefore, the company will be the bailee and the member will be the bailor. The relationship between the members with each other could be regarded as guarantee. Also, where a member is indemnified more than the total of his payment o f premiums, the exceeded amount could be considered as loan. Therefore, this form o f insurance is a combination o f lucrative bailment, guarantee and loan contracts. So, all those contracts are absolutely lawful under Sharia. More discussion about the nature of this legal relationship will be analyzed in Chapter Seven.
Therefore, the target o f this relationship is to be insurer and insured at the same time without taking any illegal advantage of other members and not, therefore, violating the Islamic rules.