Understanding Islamic Finance #
Original question:” May I know whether working in the IT department (IT position) in Chubb (an insurance company) halal? As I checked, the company is actually non- shariah compliant. So far from my understanding, it’s best for me to find another company to work for if it’s possible but there is no immediate need to leave the company right away given my proximity with the actual business dealings (ie. with the sales contract etc) is quite a distance since I’m in IT within Chubb”.
The parent company, Chubb Limited, is Shariah non-compliant across all the major stock Shariah screening indices. However, among its subsidiaries are Shariah-compliant companies. Please see: CHUBB Arabia Cooperative Insurance (https://www.chubb.com/sa-en/investor-relations-chubb-arabia/shariyah-review-bureau.html)
PT Asuransi Chubb Syariah Indonesia
(https://www.chubb.com/id-en/about-chubb/chubb-in-indonesia.html)
Based on this brief examination, we can conclude that a conventional insurance company is generally Shariah non-compliant unless they are able to convert their operations and contracts according to Shariah rulings and have a Shariah board in place to provide expert advice and monitoring.
It is clear that our Shariah views it as unlawful for Muslims to get involved in and deal with conventional insurance due to the elements of interest (riba), uncertainty (gharar) and gambling (maysir) in their business practices. Therefore, if choices are available, one should make an effort and strive to refrain from being involved directly or indirectly with conventional insurance. However, if there are no choices left to be made, one is allowed to engage with it, provided that one must leave the workplace upon better Shariah options being available.
Contemporary Islamic scholars have divided this matter into two categories:
1.The Frontliners (direct involvement):
Frontliners are workers or employees who work and deal directly in conventional insurance’s business operations and transaction activities. They are the ones who are in direct contact with, manage, and facilitate the insurance businesses.
For example, people who work on executing insurance contracts, preparing insurance contracts, promoting or marketing insurance products, requesting insurance product subscriptions, collaborating with other insurance business partners, coordinating insurance products, investing premium contributions of participants in prohibited activities, and so on are examples. These types of workers are categorised as the frontliners in insurance companies, and this category is strongly prohibited and unlawful in Islam, based on the following hadith:
“Jabir said that God’s Messenger cursed the one who accepted usury, the one who paid it, the one who recorded it, and the two witnesses to it, saying they were all alike.” (Sahih al-Bukhari, hadith 5347)
Singapore Context
Some Muslim scholars’ points of view revolve around the main job scope as the integral part to deciding if the income can be considered lawful or not. Hence, the following is the guideline that you may follow for the frontliner:
The principal company that you are representing as an agent needs to be approved by a legal authority such as MAS, and it is best to be an Islamic insurance company (takaful company). Because Singapore lacks a fully-fledged takaful company, you may represent conventional insurance as an agent based on the needs of Singaporean society.
To be an agent, you need to be licensed by MAS. And with this license, you have a duty to fulfill, like financial planning, advice on the best health insurance products, and the handling of insurance claims.
Because of your license, your main job scope is not just selling insurance but also ensuring the duties to clients are in place, and you are bound by law to recommend what is best for the client’s financial objectives. The insurance product is part of the job scope. This means you will advise on financial planning like asset and debt management for your clients on top of insurance products.
Hence, the income from this scope of job is lawful (halal).
2.The Frontliners (indirect involvement):
Another category is called “backliner,” which is a worker or an employee who is not working and not involved directly in any of the business operations and transaction dealings of a conventional insurance company. They do work for insurance companies, but their positions/divisions/departments/business units have nothing to do with handling or engaging with insurance products. For instance, people who work as technicians, IT, security guards, building management, building maintenance, cleaners, and information counters. This type of category is an exceptional case from the Shariah point of view.
Shariah allows people to work in the Backliner office, provided that some factors have been considered, such as:
- No other jobs are offered.
- The need for money as the sole breadwinner.
- Limited options of Shariah-compliant or Shariah-neutral industries (in the case of non-muslims countries).
In conclusion, it is lawful (harus/mubah) to be working in the IT department of a conventional insurance company as long as it is not involved directly with the insurance products or insurance dealings. However, it is also important to note that if working in the IT department requires one to facilitate insurance business dealings, the Shariah ruling would be impermissible (unlawful). For example, developing apps, websites, or software to ease the selling or marketing of insurance products. This is unlawful based on the surah al-Maidah, verse 2:”… and cooperate with one another in goodness and righteousness, and do not cooperate in sin and transgression…”
Nevertheless, we advise the person asking this question and our community to look and act on the means for alternative jobs that are not syubhah (doubful) with the sole purpose of preserving Allah’s pleasure (redha) on us. And hopefully, with the pure intention of striving for the lawful and Allah’s pleasure, our affairs are eased as well as blessed by Him bountiful sustenance.
Allah SWT says in surah al-Talaq, verse 2 and 3:
“And whoever fears Allah – He will make for him a way out (2) And will provide for him from where he does not expect (3)”.
Allah knows best.
