Impermissibility of commercial reinsurance is based on the fact that the idea of commercial reinsurance depends on the idea of commercial insurance and involves Shariah-prohibited Gharar. As related by Muslim, Ashab al-Sunan and others, quoting Abu Hurayrah, the Prophet (peace be upon him) prohibited Bay’ al-Gharar (aleatory sale). Gharar, as defined by several Fiqh scholars, indicates uncertainty about the outcomes, or the consequences, or end result of something. According to some contemporary Fiqh scholars Gharar is similar to or part of betting or gambling. A number of resolutions on prohibition of Gharar have also been issued by Islamic Fiqh Academies including the Resolution of the Islamic Fiqh Academy -Makkah Al-Mukarramah in its 1398 A.H. Session, endorsing the Resolution of the Supreme Council of the Ulema of the Kingdom of Saudi Arabia in its 10th Session held in Riyadh on 4 Rabi’ II, 1397 A.H., and Resolution No. (9) 9/1 of the International Islamic Fiqh Academy.

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