Local Diversifications

Did you think that you know everything about insurance? If yes, then check this;

takaful: the Islamic version of insurance. The buying of conventional insurance is largely forbidden under Shariah law: some property insurance is not clearly outlawed, but the concept of life assurance is deemed to be “against providence”. Takaful operates on a similar principle to a mutual guarantee or indemnification fund, with a number of members sharing risk on a co-operative basis. The greatest difference between it and conventional insurance is that takaful operators are prohibited from investing in certain economic ventures, most notably gambling and the production of alcohol or the manufacture of pork products. The system works as a company run by and for policyholders, with profits distributed to members, much in the way a mutual would operate. Claims are treated as charitable donations from the policyholders’ fund to the claimants. The company receives a fee from the policyholders for administering the fund and all share in the surplus.
[from a glossary of insurance terms]