Takaful (ethical) insurance (17)

  is the Hadith (the traditions, the actions, the deeds, speeches and injunctions, the actions of close companions for which the prophet approves of or disapproves) of the Prophet of Islam (s.a.w). The Hadith is comprehensively recorded in many volumes of Hadith literature. During the life time of the Prophet (s.a.w) his family members, his companions and people around him observed him and shared with others exactly what they had seen him do, say or pronounced a judgment on matters and these were recorded to be referred to on future legal and economic issues. The Hadith can thus clarify details of what is stated generally in the Qur’an. It is practical explanation or demonstration of what the Holy Book says on human daily living.  
The Holy Qur’an says of the Prophet (s.a.w) “…..he, does not pronounce an action or something of his own wish, rather whatever he said or did is a revelation from Allah….” In Qur’an 59:07, Allah said “…..Whatever the Prophet brings on to you, you should steadfastly hold on to it and whatever he forbids you, you should strenuously avoid it…” On the revered wife of the Prophet, the mother of faithful, A’isha bintu Abubakar (r.a) was asked to describe the Prophet’s way of life and she replied: “His way of life is the Qur’an.” This means that the Prophet’s entire deeds/actions, pronouncements, on marriage, legal matters, personal life, relationships between human beings, administration, economic matters and man’s relationship with his Creator are for the guidance of the society. These prophetic practical life examples were meticulously compiled during the Prophet’s life time and after his death. These compilations were done by various scholars. However, six collections and compilations are regarded as the most authentic collections. They are: (1) Sahih Al-Bukhari, (2) Sahih Muslim, (3) Sunan Abu Dawud, (4) Sunan Ibn Majah, (5) Attirmizi and (6) Sunan An-Nasa’i. These collections are well known and regarded as authentic by the majority of the ummah.
Now let’s look at some of the prophet’s (s.a.w.) sayings/actions on business transactions i.e on economy and economic activities. (1)  Rifa’a bin Rafi (r.a) reported that the prophet (s.a.w.) was asked what type of earning/business activity is best for human being? The prophet (s.a.w.) replied: “A man’s work with his hand and every business transaction which is approved”.
(2) Jabir bin Abdullahi (r.a) reported that he heard the Prophet (s.a.w.) say: “Allah has declared forbidden the sale of wine/intoxicants, dead animal, swine and idols”. His companions asked the prophet (s.a.w.) what he thought of the fat of animals which died a natural death? The prophet (s.a.w.) replied: “No it is also unlawful.” And he added by saying, “Allah cursed the Jews, when Allah Most High declared the fat of such animals unlawful they melted it, then sold it and enjoyed the price they received.”
(3) Ibn Mas’ud (r.a) narrated that he heard the Prophet (s.a.w.) saying, “When two people who are arranging a business transaction disagree, and neither being able to prove his case, the decision rests with the seller, or they may both reject the transaction.”
(4)  Abu Mas’ud al-Ash’ari (r.a) reported  that the Prophet (s.a.w.) said: “Allah has forbidden the price paid for a dog, the hire paid to a prostitute and the gift given to a soothsayer.”
(5) Abu Huraira (r.a) reported  that Prophet (s.a.w.) forbade a business transaction determined by throwing stones and all business transactions which involve uncertainty.”
(6) Abu Huraira also reported that the Prophet (s.a.w.) said, “if anyone buys some grains, he must not sell it till he measures it out.”
(7) Abu Huraira reported  that the Prophet (s.a.w.s.) forbade two business transactions combined in one.” Abu Dawud added that “If anyone makes two business transactions combined in one, he must confirm/disclose the lower price, or he is involved in committing Usury/Riba.”
(8) Amr bin Shu’aibu reported that the Prophet (s.a.w.) said “The proviso of a loan combined with a sale is not allowable, nor two conditions relating to one business transaction, nor the profit arising from something which is not in one’s charge nor selling what is not in your possession.”
The issue of Gharar/ uncertainty is clearly spelt out here. We are all aware that one of the prohibited business transactions in Takaful is, businesses containing Gharar/Uncertainty.
(9) Anas (r.a) narrated that when prices were high in Medina, people asked the Prophet (s.a.w.s) to fix prices for them, he replied, “Allah is the One Who fixes prices, Who withholds, gives lavishly and provides, and I hope that when I meet Him Most High, none of you will have any claim on me for an injustice regarding blood or property.”
These are only but few Hadith, among millions, that talk on Islamic economics. We will In sha Allah continue with the remaining two sources.  
Sharubutu is the Managing Director/CEO Skill Consult Ltd