The Framework and Practice of Islamic Insurance in Malaysia

Abstract

In Malaysia, the conventional insurance is perceived by The Commission of Fatwa as un-Islamic insurance since they see some riba, gharar, and maysir in the system. Based on this problem, many Muslim leaders and scholars establish an insurance model that is more suitable with syariah Islam. To see closer to the discourse and practice of Islamic insurance (takaful), this article describes the establishment of Islamic insurance in Malaysia as a case study. Although there are a lot of Islamic insurance developed in Malaysia today, this article is focused on the establishment and the development of STMB (Syarikat Takaful Malaysia Berhad) as the first Islamic insurance in Malaysia. There are many issues in this article such as the early tradition of insurance, modern insurance in Islamic perspective, and some issues related to the problems of insurance in Malaysia.