Takaful and Islamic Cooperative Finance
Show Less

Takaful and Islamic Cooperative Finance

Challenges and Opportunities

Edited by S. Nazim Ali and Shariq Nisar

Islamic finance distinguishes itself from conventional finance with its strong emphasis on the moral consequences of financial transactions; prohibiting interest, excessive uncertainty, and finance of harmful business. When it comes to risk mitigation, it is unique in its risk sharing approach.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 8: Fatwa and its role in regulatory capture and arbitrage

Joe W. Bradford


The chapter examines fatwa in Islamic insurance and its role as an underlying cause of regulatory capture and arbitrage. The progression of the Islamic insurance industry from one almost unanimously forbidden to a multi-billion dollar industry in less than three decades is indicative of the notable advances the industry has made. With its core principles of cooperation, mutuality and sharing of loss/gain, Islamic insurance is of particular appeal to the consumer. The chapter highlights the key obstacles preventing Islamic insurance from achieving true mutuality and cooperation, and as such truly serving the consumer for whom it was created. These obstacles include the conflation of terms in understanding mutuality under an Islamic rubric, the undue emphasis on the contractual particulars governing the consumer and the role of fatwa or lack thereof in creating regulatory capture. It covers the need for a review of the Islamic legal approaches used in the formation of fatwa in order to limit regulatory arbitrage by way of fees and charitable contributions.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.