Concept of joint liability insurance

 

Solidarity in insurance is based on cooperation, support, protection and reciprocal responsibility. It is a cooperation between the partners of the solidarity system. All partners bear compensation for losses occur to others in cooperative ways. It can be through providing joint subscription portions. It is partly or fully donated amount to be as a solidarity portfolio from which expenses, compensations, deduction of expenses and surplus is distributed among the partners.
The insurance company, which follows the Islamic insurance system, manages solidarity operations for its partners and operate insurance processes and investment of partners' funds (instrument holders).
Insurance is run under a power of attorney contract by charge as a percentage of the portions, while investment and investment portfolio are run under speculation of limited percentage of profit and relations between partners should be, if wanted, identified and declared in advance.
Documents and contracts (rights and obligations) are organized according to the Islamic insurance system.
Solidarity insurance company holds two separate accounts, one for investing the capital, including dues of solidarity administration of partners and administration of partners' funds investment portfolio. The other account is for the partners which is for solidarity funds and they result solidarity surplus and this requires causing separation principal between rights and obligations of partners, holders of documents and owners of possessory rights in the solidarity company. 
Solidarity in points :

  1. Joint liability insurance means partnership in liabilities regarding various commitments and guarantees, therefore, solidarity outputs come to provide proper financial securities against unexpected disasters and risks by applying justice values for customers and society for the benefit of all parties fairly by their efforts and helps them achieve their targets.
  2. Legitimate Control Board purifies solidarity funds and make sure the right performance of solidarity company and follows the sources of funds and their aspects of expenditures and management. 
  3. Joint liability insurance is based on cooperation in charity and devotion and each partner is a donor by participation in compensating all partners of any type of insurance who expose to insurance risks.
  4. Partner is considered jointly liable with other partners for compensating losses that may hit any partner and the company running the solidarity funds compensates its partners for any losses according to the terms and conditions. The partner donates part or all his/her contribution for compensating losses that may hit any partner based on cooperation and solidarity principles.
  5. The company manages solidarity operations for its partners and it bears all administration and solidarity expenses of the company under an agency charge contract for insurance management and a percentage of gained investment profits calculated at the end of fiscal year.
Contribution designated for coverage is put in a portfolio in one account by all partners for any type of solidarity programmes and it is used for paying curing or repairing losses, accidents and disasters in the cases of any partner, who participates in this programme, sustains any losses or damages exist in the insurance policy. In another meaning that each partner of this system basically protects others through ensuring compensation from the solidarity portfolio against limited losses that any partner sustains.