The Impact of Sharia on Insurance Laws in Islamic Countries Using the Theories of Kenneth Arrow and Ayatollah Sistani

Abstract

This article examines the impact of Islamic Sharia on insurance laws in Islamic countries using the economic theories of Kenneth Arrow and the jurisprudential principles of Ayatollah Sistani. In the first section, the theoretical foundations of insurance and risk from Arrow's perspective and the jurisprudential foundations of insurance from Sistani's perspective are reviewed. Then, the influence of Sharia on insurance laws, considering principles such as the prohibition of uncertainty (gharar), prohibition of interest (riba), and the principle of mutual participation, is analyzed. Furthermore, two case studies from Iran and Malaysia are presented, demonstrating the adaptation of insurance laws to Sharia principles. The results of this research show that both countries have made efforts to align their insurance laws with Sharia principles, thereby improving social welfare and increasing public trust in the insurance system. The article also discusses the jurisprudential and economic challenges in implementing Islamic insurance laws and potential solutions to overcome these challenges. Finally, recommendations for future research are provided, including comparative analysis of insurance laws in various Islamic countries, examining the economic and social impacts of Islamic insurance, and developing new models of Islamic insurance. This research can contribute to better policy-making and enhancing the efficiency of insurance systems in Islamic countries.