I have shares in Old Mutual / Sanlam :1.Are these shares halaal or haraam? 2.If I sell them are the proceeds halaal or halaam?3.The dividends that I have received are they halaal or haraam?

Any form of life insurance is Haraam. Mutual companies are owned by policy holders and all reserves are built up through retained profits. However, such profits primarily arise from income generated through Haraam investments such as interest on government stock, interest on fixed deposit, investments, investments on Brewery companies, etc.

Accordingly such accumulated profits are from Haraam sources. On demutualisation, these accumulated profits are utilised to issue free shares to policy holders in proportion to their equitable shares. Therefore, such shares received are Haraam and the proceeds on sales are Haraam. The proceeds should be given away as charity to the poor and needy. (Answer prepared in consultation with Jamiat Accountants)

and Allah Ta'ala Knows Best

Mufti Ebrahim Desai