The Saudi taʿawuni insurance model, despite claiming to be compatible with Islamic transactional rules, in fact violates the prohibition of gharar (risk) through its commercial structure. The study investigates the ways in which gharar (risk) is accommodated in modern insurance models. It argues that the most appropriate solution to comply with the doctrine of gharar, is to de-commercialize the taʿawuni model by adopting the mutual insurance model, which is capable of satisfying the requirements of sharia relating to the prohibition of trading in gharar

The Saudi taʿawuni insurance model, despite claiming to be compatible with Islamic transactional rules, in fact violates the prohibition of gharar (risk) through its commercial structure. The study investigates the ways in which gharar (risk) is accommodated in modern insurance models. It argues that the most appropriate solution to comply with the doctrine of gharar, is to de-commercialize the taʿawuni model by adopting the mutual insurance model, which is capable of satisfying the requirements of sharia relating to the prohibition of trading in gharar