Sharia Insurance; According to Islamic Teachings

Sharia Insurance is insurance based on sharia principles with the help-help (ta’awuni) and mutual protection (takafuli) efforts among the Participants through the formation of a pool of funds (Tabarru Funds) which are managed according to sharia principles to face certain risks. Here are some definitions in sharia insurance as follows:
1.    A contract is a written agreement that contains certain agreements, along with the rights and obligations of the parties in accordance with sharia principles.
2.    Tabarru Agreement ‘is a grant agreement in the form of giving funds from one Participant to the Tabarru Fund’ for the purpose of helping among the Participants, which are not and not for commercial purposes.
3.    Wakalah Akad bil Ujrah is a Tijarah Agreement which grants power to the Company as a Participant’s representative to manage Tabarru ‘Funds and / or Participant Investment Funds, in accordance with the power or authority granted, in exchange for a fee (Ujrah).
4.    Mudharabah agreement is a contract to provide profit sharing on Tabarru ‘Fund investment.
5.    Contribution is the amount of funds paid by Participants to the Company which will partly be allocated as Tabarru ‘contributions and the other part as a fee (ujrah) for the Company.
6.    Tabarru Fund Contributions’ are a portion of contributions paid by Participants which are then included in the Tabarru Fund Collection ‘by Tabarru Agreement’.
7.    Tabarru Fund ‘is a collection of funds originating from the contributions of Participants, the mechanism of its use in accordance with the agreed Tabarru Agreement’.
8.    Surplus / Underwriting Deficit is the difference of more / less than the total contribution of Participants to the Tabarru ‘Fund after deducting compensation / claim payments, reinsurance contributions, and technical reserves, within a certain period.
Advantages of Sharia Insurance:
1) Transparency in Management of Participant Funds of sharia insurance with clear and transparent initial agreements and aqad that is sharia compliant, tabarru ‘funds will be professionally managed by sharia insurance companies through sharia investments based on sharia principles.
2) Islamic Participant Fund Management by avoiding Riba (Interest), Maisir (Gambling) and Gharar (Unclear).
Sharia insurance avoids the function of conventional insurance that contains Riba (Interest) Maisir (Gambling) and Gharar (Unclear). Tabarru ‘funds will be used to face and anticipate disasters / disasters / claims that occur among insurance participants. Through sharia insurance, can prepare themselves financially while still maintaining the principles of transactions in accordance with Islamic fiqh. So there is no doubt for sharia insurance.
3) Availability of Underwriting Surplus Allocation and Distribution.
a. In the event of a Underwriting Surplus, Participants agree to allocate the Underwriting Surplus as follows:
• 50% for Tabarru Funds’ Collection;
• 20% for participants who meet the criteria;
• 30% for the Company as an operator.
b. The Underwriting Surplus will be distributed to Participants no later than 90 calendar days after the calculation is completed.
c. Distribution of Surplus Underwriting results is only given to Participants who meet the following conditions:
·         Participants never submit a claim in the underwriting surplus / deficit year.
·         Not making a claim on the underwriting surplus / deficit calculation date.
d. If the amount of Underwriting Surplus to be distributed to each Participant is less than Rp. 50,000, – then the Underwriting Surplus is entered into the Tabarru ‘Funds pool.
Asei Insurance has several types of Sharia General Insurance products as follows:
1) Sharia Property Insurance
Insurance that provides compensation to the Insured for damage or loss of the insured property caused by fire, lightning strikes, explosions, aircraft crashes, and smoke originating from the insured property fire. Property insurance covers fire insurance and extended coverage (earthquake, storm, flood, typhoon, etc.) and also insurance for losses resulting from business interruption caused by fire.
Types of property insurance:
• Indonesian Fire Insurance Standard Policy (PSAKI)
• Indonesian Earthquake Standard Policy (PSGBI)
• Property All Risks (PAR) or Industrial All Risks (IAR)
2) Sharia Engineering Insurance
Engineering Insurance is a form of insurance that provides coverage for the risk of loss or damage to the insured object (usually related to construction; material; equipment or machinery) during the construction or installation of machinery against any risk of loss or damage that is unforeseen; sudden and accidental.
Expansion of coverage can be given against risks of loss or damage to property and physical accidents from Third Parties with a maximum value agreed in advance. Engineering Insurance is divided into 2 (two) large groups, namely: Project Engineering Insurance and Non Project Engineering Insurance.
The type of coverage (policy) for Engineering Projects, namely:
• Construction Insurance (Contractor All Risk Insurance / CAR): provides coverage for the risk of loss and / or physical damage to the construction.
• Erection All Risks Insurance (EAR): provides coverage for the risk of loss and / or damage to the machines at the time of installation or installation. The type of coverage for Non-Project Engineering, namely:
• Electronic Equipment Insurance (EEI)
• Machinery Breakdown Insurance (MB)
• Heavy Equipment Insurance (Contractor’s Plant and Machinery / CPM)
3) Sharia Goods Transport Insurance
Insurance that guarantees damage or loss of goods transported from one place to another either by means of land transportation (trucks, trains, trailers), sea (ships) or air (aircraft) against the risks that occur during transportation of goods. The types of risks borne are divided into three (3) groups called the Institute Cargo Clauses (ICC) namely (from the most complete): ICC “A”; ICC “B” and ICC “C”.
4) Sharia Ship Frame Insurance
Providing guarantees for damage or loss to ships, machinery and equipment from perils of the sea and navigational perils. The guarantee is full terms / full conditions (Cl 280) and limited terms / limited conditions (Cl 284 and Cl 289).
5) Sharia Miscellaneous Insurance
Liability Insurance: guarantees legal liability to third parties in the form of bodily injury and / or property damage in connection with work or business activities carried out by the Insured.
Types of Liability Insurance:
• Public Liability Insurance
• Commercial General Liability or CGL (which includes Public Liability, Employer’s Liability, Automobile Liability, Workmen’s Compensation)
6) Sharia Money Insurance
Providing guarantees for loss of money, gold and / or equivalent to money (Checks, Bank Notes, Wesel) of the Insured while kept in a safe, vault or other money storage; during shipping from one place to another; when stored at cashier or counters where transactions are made; and guarantee the loss of the insured’s money due to dishonesty of employees who are trusted in managing money.
Types of Money Insurance:
• Cash in Transit (CIT)
• Cash in Safe (CIS)
• Cash in Cashier Box
• Fidelity Guarantee
7) Sharia Personal Accident Insurance
Provide insurance against the risk of death, permanent disability, and the cost of care or medication caused by an accident.
8) Shariah Disposal Insurance
Bear the loss due to theft that the thief enters the room occupied by the Insured, by means of violence / demolition and damage to the Insured’s goods as a result of the act.
9) Personal Accident Insurance Plus Sharia
Provide insurance against the risk of death caused by accidents and illness and the risk of termination of employment.


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