Is exchange traded derivatives and occupational specific insurance permissible in Islam.

Answered according to Hanafi Fiqh by AskOurImam.com
  1. Is exchange traded derivatives permissible in Islam.
  2. Is a professional person allowed to have occupational specific insurance, where if a person becomes ill or injured and is unable to work, the insurance will pay for his salary for the period he cannot work?

Answer:

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

  1. Shari’ah explicitly renounces and prohibits transactions involving all forms of usury (Riba), excessive uncertainty (Gharar), gambling (Maysir), as well as trading of debt. Furthermore, in order for a sale to be valid, Shari`ah specifies that the commodity and underlying assets must be Halal, currently existing in its physical sellable form, and in the ownership of the vendor. Hence, these conditions evidently render impermissible the trading of derivatives.

Moreover, futures transactions are not permissible since Shari`ah disallows a sale or purchase to be affected for a future date and since in majority of the future sales delivery or possession is not intended. Islam does not allow the trading of such promises and the trading and charging of premiums for such promises.

 

  1. All forms of insurances, including occupational insurance, are prohibited in Islam. Conventional Insurance constitutes usury (Riba), gambling (Maysir) and excessive uncertainty (Gharar) all of which is prohibited in Islam[1].

 

And Allah Ta’āla Knows Best

Hanif Yusuf Patel

Student Darul Iftaa
UK

Checked and Approved by,
Mufti Ebrahim Desai.

www.daruliftaa.net

 

References
[1]

الذين يأكلون الربا لا يقومون إلا كما يقوم الذي يتخبطه الشيطان من المس ذلك بأنهم قالوا إنما البيع مثل الربا وأحل الله البيع وحرم الربا

[Al-Qur`an, 2:275]

يا أيها الذين آمنوا اتقوا الله وذروا ما بقي من الربا إن كنتم مؤمنين. فإن لم تفعلوا فأذنوا بحرب من الله ورسوله وإن تبتم فلكم رءوس أموالكم لا تظلمون ولا تظلمون

[Al-Qur`an, 2: 278-9]

فان تأجيله لا يصح … وعلي اعتبار الانتهاء لايصح لانه يصير بيع الدراهم بالدراهم نسيئة وهو ربوا

[Al-Hidayah, 3:76]

يآ ايُّها الَّذين امنوا انّما الْخمر والميسر والانصاب والازلام رجس من عمل الشيطان فاجتنبوه لعلكم تفلحون

[Al-Qur`an, 5:90]

عن أبي هريرة قال نهي رسول الله عن بيع الحصاة وعن بيع الغرر

[Sahih Muslim: 3170]

ولا خلاف بين أهل العلم في تحريم القمار

[Ahkam al-Qur`an li al-Jassas, 2:465, Dar Ihya at-Turath al-Arabi, Beirut]

وهو حرام بالنص القمار …

[Radd al-Muhtar ala ad-Durr al-Mukhtar, Kitab al-Hadhr wa al-Ibahah, 6:403]

Also see: [Fatawa Mahmoodiyyah, 16:387-340; Takmilah Fath al-Mulhim, 1:320; Ahsan al-Fatawa, 7:24-5]

For a detailed discussion see: [Islam aur jaded ma`ashee masa`il, 3:307-19, Idarah Islamiyaat]

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