Q) Health insurance is going to be compulsory for all companies and associations in our country. The insurance company will not have direct relationship with companies or associations, as there will be brokers in between, this is also compulsory.
The question is:
What is the ruling on working for these brokers? Its role is basically introducing offers to companies and individuals and dealing with claims.
A) Praise be to Allaah.
Health insurance is haraam like other types of commercial insurance, because it is based on ambiguity, gambling and riba (usury). This is what is stated in fatwas by the senior scholars. See the answer to question no. 39474 and 4210.
In Fataawa al-Lajnah al-Daa’imah (15/277) there is a quotation of a statement of the Council of Senior Scholars concerning the prohibition on insurance and why it is haraam:
Commercial insurance contracts are transactions based on probability and extreme ambiguity, because the customer cannot know at the time of signing the contract what he will give or take. He may pay one or two instalments, then calamity may strike and he will be entitled to what the insurer committed to pay. Or no calamity may happen at all, so he pays all the instalments and takes nothing. Similarly the insurer cannot know what he will give or what he will take with regard to any individual contract. In the saheeh hadeeth it says that the Prophet (peace and blessings of Allaah be upon him) forbade ambiguous transactions.
Commercial insurance contracts are a type of gambling, because they involve the risk of financial compensation or penalties for no offence or cause on the part of the one who is paying the penalty, or gaining without paying something in return, or paying something that is not equal to the gains. The person who is insured may pay one instalment of the insurance, then an accident occurs, so the insurer will be obliged to pay the whole amount in accordance with the insurance policy. Or no accident may occur, but he pays all the instalments of insurance and gets nothing in return. When the ambiguity becomes prevalent, it becomes like gambling, whereupon it comes under the general prohibition on gambling in the verse in which Allaah says (interpretation of the meaning):
“O you who believe! Intoxicants (all kinds of alcoholic drinks), and gambling, and Al‑Ansaab (stone altars for sacrifices to idols etc), and Al‑Azlaam (arrows for seeking luck or decision) are an abomination of Shaytaan’s (Satan’s) handiwork. So avoid (strictly all) that (abomination) in order that you may be successful.
91. Shaytaan (Satan) wants only to excite enmity and hatred between you with intoxicants (alcoholic drinks) and gambling, and hinder you from the remembrance of Allaah and from As‑Salaah (the prayer). So, will you not then abstain?”
Insurance contracts include both types of riba, riba al-fadl and riba al-nasa’. If the company pays the customer or his heirs or the beneficiary more than the sum that he paid, then this is riba fadl; and usually the insurer pays this money to the customer some time after the contract, and this is riba nasa’. If the company pays the customer only what he paid, this is riba nasa’ only. Both are haraam according to the texts and scholarly consensus.
Commercial insurance contracts are a kind of haraam betting, because each party is getting involved in ignorance, ambiguity and gambling. Islam does not permit any type of betting except that which supports Islam and propagates Islam by means of proof and jihad. The Prophet (peace and blessings of Allaah be upon him) granted a concession allowing betting in only three cases, when he said: “There should be no (money) prizes for competitions except in camel-racing, horse-racing and archery.” Insurance does not come under these headings and cannot be likened to any of them, so it is haraam.
Commercial insurance contracts take a person’s money without giving him anything in return, and taking money without giving anything in return in commercial transactions is haraam, because it comes under the general meaning of the prohibition in the verse (interpretation of the meaning):
“O you who believe! Eat not up your property among yourselves unjustly except it be a trade amongst you, by mutual consent”
Commercial insurance contracts involve commitment to something that sharee’ah does not make binding. If no accident happens to the customer and he does not cause any accident, then it is merely a contract with the insurer against danger on the basis that it might happen, in return for money that the customer pays to the insurer, and the insurer does not do anything for the customer, so it is haraam. End quote.
The fact that the state makes insurance compulsory does not make it permissible; rather the burden of sin is waived from the person or company who is obliged to do that. As for the broker company which is doing this work by choice, it is guilty of sin.
The same applies to the person who works in the insurance company or broker company; he is doing this work by choice, but this work is not permissible for him, because it is directly helping in sin, and Allaah says (interpretation of the meaning):
“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 Allaah. Verily, Allaah is Severe in punishment”
It says in Fataawa al-Lajnah al-Daa’imah (15/251):
Firstly: Commercial insurance of all types is haraam because it involves ambiguity, riba, uncertainty, gambling and consuming people’s wealth unlawfully, and other shar’i reservations.
Secondly: It is not permissible for the Muslim to get involved with insurance companies by working in administration or otherwise, because working in them comes under the heading of cooperating in sin and transgression, and Allaah forbids that as He says: “but do not help one another in sin and transgression. And fear Allaah. Verily, Allaah is Severe in punishment”
[al-Maa’idah 5:2]. End quote.
And Allaah knows best.