What is the ruling on working for a software company that undertakes a project for insurance companies, knowing that the company refuses to work on impermissible projects and claims that Dar Al-Iftaa has permitted it, and that the employee is bound by a contract that obliges him to a specific period before resignation, and is it permissible for him to dispose of his salary during this period?
Insurance is of two types: commercial and cooperative. Commercial insurance is forbidden by Islamic law because it is based on ignorance (jahalah) and (excessive uncertainty). It is not permissible to work in its companies or assist them, due to the Almighty's saying: "And cooperate in righteousness and piety, but do not cooperate in sin and aggression." (Al-Ma'idah/2). The Islamic Fiqh Academy has deemed commercial insurance to be a legally invalid contract, and that the -compliant alternative is cooperative insurance. Dr. Sulaiman Al-Thunayan mentioned that commercial insurance is explicit usury (riba), as it involves the exchange of money for money with deferment, which makes it both riba al-fadl (excess in quantity) and riba al-nasiah (deferment). One must cease any project that involves forbidden work, and the salary earned from such work is forbidden.
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Reviewed by El Fatwa's sharia committee.
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