Islamic finance pioneers and community leaders in India have come together to introduce a mutual health assurance scheme modeled on takaful, which currently does not exist in the country, reports Salaam Gateway.
The not-for-profit health assurance scheme, called Uplift Mutuals Biradaree, started in April this year at two of Mumbai’s Muslim-majority localities, Kurla and Malad. The scheme works on the model of mutual assurance, with certain features maintaining the values of Shariah-compliant finance.
“The mutual health assurance model by design works on the principles of takaful in which people contribute an agreed amount to a common pool to support each other and share risk,” Dr. Shariq Nisar, an Islamic finance academic and professional who helped develop the scheme, told Salaam Gateway.
In addition, the scheme works on the principle of ‘prevention is better than cure’ where steps and precautions are taken to avoid illness in the first place. “It’s not a normal insurance but a health service plus financial aid support,” said Dr. Nisar.
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“Monthly clinics are organized in the localities, and doctors are made available on call 24×7. But if one still falls ill, the mutual help in getting the right treatment and the right doctors at the right price,” he added.
Uplift Mutuals Biradaree is also designed to be affordable and is open to all financially vulnerable families, and not just Muslims. A single member pays INR 700 ($10) per annum and a family of four INR 1,400 per year.
The annual contribution has been kept low because part of the capital and operating expenditures are currently met by external funding from the global industry body the International Cooperative and Mutual Insurance Federation (ICMIF).
As part of its 5-5-5 Mutual Microinsurance Strategy for India, ICMIF has partnered with Uplift India Association to deliver mutual assurance coverage to half a million people over the next five years.
Dr. Nisar said that when ICMIF studied the Uplift Mutuals model, they realized it worked in line with takaful. “We thought if we could add the Shariah screening features to Uplift Mutuals, we could develop an alternative to takaful that would be acceptable to the wider Muslim community,” he said.
Official regulations do not allow the creation of formal takaful initiatives for India’s 172 million Muslims.
The health assurance scheme will work on the existing platform of Uplift Mutuals, a 15-year-old community-owned mutual health assurance model developed by Uplift India Association. Uplift Mutuals has set up about nine such mutuals that cover over 300,000 urban and rural poor in the states of Maharashtra and Rajasthan.