Due to the lack of Shariah scholars in the Islamic world–even in Saudi Arabia–Islamic financial institutions are literally “outsourcing” the Shariah advisory function.
In Saudi Arabia, one manifestation of that is the “Shariah Review Bureau,” a separate entity that provides Shariah advisory services to a variety of Islamic financial institutions.
But already Western observers will notice something very curious about this “Shariah Review Bureau.” They “are currently serving 22% of the listed Cooperative Insurance companies in Saudi Arabia.”
Think about that for a moment. Almost 1 in 4 insurance companies in Saudi Arabia are all advised on THE key component of Shariah Compliance by a single entity.
Imagine for a moment that State Farm, Allstate, Prudential and Liberty Mutual all used the same exact entity for advisory services for the key component of their insurance business. You can’t imagine it because it would never happen.
Why? Because of the obvious conflict of interest that would arise. Ethical business practices would preclude such a situation. But in the world of Shariah Finance, ethical has a whole different meaning. In Shariah Finance, ethical means Shariah Compliant–and nothing else…