Differences Between Participation Insurance

and Conventional Insurance

Participation insurance is required to adhere to participation finance principles across all its operational models. In participation insurance, all activities-including contracts, policies, procedures, and all other transactions-are subject to the approval of the Advisory Committee. Furthermore, in participation insurance, both the specific areas to be insured and the financial assets in which premiums are invested must comply with participation finance principles.

Conversely, in conventional insurance, the principles to which the company must adhere are determined solely by applicable legislation. In conventional insurance, there are no restrictions-other than those mandated by legislation-regarding the areas to be insured or the assets in which premiums are invested.