the spirit of benevolence or the motives that prompt acts of kindness.

(l) Analogising commercial insurance contracts to guard-service contracts is likewise unsound, for the analogy ignores decisive differences. One of them is that safety itself is not the subject-matter of either contract. In insurance the subject-matter is the premiums and the sum insured, whereas in guarding it is the fee and the guard’s labour. Safety is merely the aim and the result; otherwise the guard would not be entitled to his wage if the item under guard were lost.

(m) Equating insurance with a compensated deposit is also invalid, for it too is an analogy vitiated by material differences. In the case of a deposit, the fee is a counter-value for the custodian’s act of keeping an item in his possession and protecting it. By contrast, what the insured pays is met by no tangible performance on the insurer’s part that yields a benefit to the insured; it is only a guarantee of security and peace of mind. To stipulate consideration for such a guarantee is impermissible and renders the contract void. If the insured sum is treated as the counter-value of the premiums, the transaction becomes a commercial exchange in which the insured amount—or the timing of its payment—is made the object of trade, and even the jurists have disagreed about the permissibility of a remunerated deposit.

(n) The attempt to liken insurance to what is known as the case of the cloth-dealers and the weavers is likewise untenable. The precedent invoked belongs to cooperative insurance, which is pure mutual assistance, whereas the issue at hand is commercial insurance, which is a profit-driven exchange; hence the analogy fails.

The Academy also resolved unanimously to endorse Resolution no. 51, dated 4/4/1397 AH, of the Council of Senior Scholars in the Kingdom of Saudi Arabia, which permits cooperative insurance in place of the forbidden commercial insurance mentioned above, for the following reasons:

1. Cooperative insurance is a donation-based contract whose primary purpose is to spread risk and share liability when calamity strikes. This is achieved by a group of persons contributing sums of money that are set aside to compensate any member who suffers harm. The cooperative-insurance group seeks neither trade nor profit from these funds; rather, they aim to distribute risks among themselves and to collaborate in bearing the loss.