Second: Cooperative insurance is free from usury (riba) in both its forms—riba al-faḍl and riba al-nasā’—for the contributors’ contracts are not usurious, nor is the pool of premiums employed in usurious dealings.

Third: The fact that the contributors do not know in advance the exact benefit they will receive does no harm, because they are making donations; there is therefore no risk, no excessive uncertainty, and no gambling. By contrast, commercial insurance is a profit-driven exchange contract.

Fourth: A group of contributors, or their appointed representatives, may invest the accumulated premiums to fulfil the very purpose for which the cooperative was created, whether they do so voluntarily or for an agreed-upon fee. The Council holds that cooperative insurance should be organised as a mixed cooperative insurance company for the following reasons:

(a) Commitment to the Islamic economic vision, which leaves individuals responsible for undertaking various economic projects, while the state’s role is merely complementary—stepping in only where individuals fall short—and that of a guide and overseer to ensure the success and sound conduct of those projects.

(b) Adherence to the cooperative-insurance ethos, whereby the participants themselves exercise full control over the enterprise—its operation, its executive apparatus, and the responsibility for managing it.

(c) Training local people in the direct practice of cooperative insurance, fostering individual initiative, and harnessing personal motivation. Involving the populace in management will undoubtedly make them more vigilant and keen to avoid the risks whose compensation they will jointly bear, thereby serving their own interest in the success of the cooperative insurance scheme: avoiding risks will lead to lower premiums in the future, whereas their occurrence may oblige them to pay higher premiums later on.