DISPUTE RESOLUTION ON MUḌĀRABAH MUSYTARAKAH CONTRACT ON SHARIA INSURANCE IN INDONESIA: BETWEEN REGULATION AND PRACTICE

This paper discussed on how to resolve disputes over the muḍārabah musytarakah contract in sharia insurance by looking at the applicable sharia insurance dispute settlement regulations and sharia insurance policies. This research was a normative legal research using the documentation method. The results showed that in various regulations and policies regarding sharia insurance, there are various alternatives (choice of forum) in dispute resolution, including in the muḍārabah musytarakah contract. In general, sharia economic dispute resolution can be done in two ways, namely litigation and non-litigation. Litigation dispute resolution was guided by the mandate of Law Number 3 of 2006 on Religious Courts. Several alternative non-litigation dispute resolutions are mentioned in various regulations, including: by deliberation and consensus; through mediation institutions that are independent and impartial; through an association by the business activities of a sharia insurance company; or the Shari'ah Arbitration Board. Then, in the sharia insurance general policy, there are also various alternative dispute resolutions, including amicably reaching a mutual agreement. But if it is not successful, then the dispute resolution will be carried out through the Indonesian Insurance Mediation Board (BMAI); through the Sharia Arbitration Board; Religious Courts/District Courts in the policy area are issued, or the participant chooses one of the dispute resolution options and is obliged to notify the company.


A. Introduction
The development of economy, technology, and knowledge is growing rapidly> This led an agrarian society in a modern direction 1 , which in turn, has increased awareness in various fields, including social, business, political, and other interactions.
In the business world, business people, both individuals and legal entities, do not want to take heavy risks, especially if it is detrimental or burdensome to their lives. 2 So to prepare for these risks, a sense of security is needed through coverages, such as sharia insurance.
Sharia insurance is one type of the sharia financial institutions that is growing today. Sharia insurance itself has a significant difference from conventional insurance.
For example, the conventional insurance aims to transfer the risk that will be borne by the insured to the insurer. 3 While in sharia insurance, the insurer's position is only as an intermediary, where those who bear the risk are the insured themselves, which is known as the concept of helping (ta'āwun) based on the concept of muḍārabah, muḍārabah musytarakah or in the form of other contracts. 4 The muḍārabah musytarakah contract is the product of ijtihad of scholars who understand the community needs that play as an effort to improve business and welfare, such as when it requires capital and cooperation between two or more parties to run a particular business. The concept of this contract is also found in sharia insurance, such as life insurance, loss, and sharia reinsurance. 5 Looking at the data from the Indonesian Sharia Insurance Association (AASI), the return on sharia insurance investment has increased in the first quarter of 2021, which is Rp. 36.2 billion compared to the first quarter of 2020 which was recorded at Rp. 35.1 billion. Nur Hidayat, Chairman of AASI said that assets in sharia insurance are dominated by life insurance by 81.37%, general insurance by 13.91% and reinsurance by 4.71%. 6 Looking at the Sharia IKNB Statistics data for the October 2021 period issued by the OJK, there were 14 units of the sharia insurance industry, with 16 units of sharia investment package companies. The assets amount to Rp. 43,593 billion. 7 However, behind the growing development of sharia-based financial institutions, it does not rule out the possibility of disputes from agreements made by the parties in an agreement, this is usually called a dispute. Where in every economic activity might not be separated from the risk of the emergence of disputes, both between Islamic financial institutions with customers and partners.
In the practice of sharia economics, disputes can arise from legal actions or misunderstandings between people who have a contract. With the number and variety of sharia economic problems or disputes, alternative dispute resolution needs to handle and resolve sharia business disputes based on sharia principles. Likewise, sharia insurance that, is engaged in risk management to help and protect each other, both life and property are also required to resolve any existing disputes.
The agreement on sharia insurance is known as a policy, which contains the rights and obligations of the company and sharia insurance participants. This policy is authentic evidence of the contract made, which used as a source of law for the parties bound in the agreement. This means, the parties that involved must comply with all the provisions stipulated in the policy, as well as regarding the dispute resolution method. Basically, the principle that applies to dispute resolution is the principle of freedom of contract. This means that the contracting parties are free to choose the dispute resolution method and forum that will be used when there is a dispute between them but still must pay attention to the relevant regulations. Also, it occurs in the practice of the muḍārabah musytarakah contract on sharia insurance.
Based on the observations, research on sharia insurance, especially in terms of dispute resolution, has been carried out by several previous researchers. For example, the research conducted by Hariyantom, 9 Parsaulian,10 Lathif and Habibaty, 11 Syara,12 Pahlevi N and Ramadhan,13 and Fitri. 14 But, this study is different from previous studies as it tries to examine more deeply toward alternative forms of dispute resolution for the muḍārabah musytarakah contract in sharia insurance and how the legal provisions regulate the settlement of the dispute. In short, this study could complete previous studies.

B. Method
This research was normative legal research, 15 with descriptive-analytical method.
The data collection method used documentation method, namely by collecting the relevant data to the author's research. The primary data was obtained from regulations and laws related to dispute resolution in sharia insurance. The secondary data were books, scientific papers, and related documents that are relevant. The obtained data were then analyzed qualitatively. The paper examined regulations and policies related to dispute resolution procedures in muḍārabah musytarakah contracts in sharia insurance.

Sharia Insurance Overview
Insurance in Arabic is called at-ta'min.The word is from the word amana, which means protection, security, tranquility, and freedom from fear. In another sense, it guarantees or bears each other. 16  In the practice of sharia insurance, there are two types of contracts, namely tabarru' and tijarah contracts. Tabarru' contract is a contract that aims at benevolence and mutual assistance, which involves non-profit transactions. Meanwhile, the tijarah contract is a contract whose purpose is commercial. 22 The basis of sharia insurance in using the tabarru' contract is intending to give benevolence funds sincerely to help each other among insurance participants. In this case, it is a grant. Meanwhile, insurance companies get profit-sharing using a muḍārabah contract or muḍārabah musytarakah contract or obtain an ujrah (fee) using a wakalah bil ujrah contract. 23 Things that must be considered and explained in making a contract in sharia insurance are, at least, the rights and obligations of the parties (participants and companies), time and method of premium payment, and the type of contract and the terms. 24 Basically, the concept of benefits provided by insurance to participants includes a sense of security, deposits which at maturity can be withdrawn, avoiding the risk of loss, earning income in the future, and obtaining compensation due to loss or damage. 25 In more detail, King Parsaulian explained some of the benefits of sharia insurance, a share of profits from investment returns and the difference between the benefits of the initial takāful plan and the premiums already paid.
2) If the participant withdraws before the agreement ends, the participant will receive several things, namely account funds that have been deposited and a share of profits on investment returns in muḍārabah contracts. b.
The benefits of takāful on non-saving products (tabarru') are: 1) If a takāful participant dies during the agreement period, the heirs will receive a death benefit following the amount the participant paid.
2) If the participant lives until the agreement ends, the participant gets a share of the profits from the tabarru' account based on the muḍārabah scheme.
Then, sharia insurance products are also divided into several types, depending on the point of view. When viewed from the fund, sharia insurance products are divided into two, namely products that have an element of savings have not. Sharia insurance products with elements of savings are the hajj fund program, education fund program, and unit-linked programs. Non-saving products, for example, are personal accident programs, association personal accident programs, student accident programs, Falah insurance programs, and group health insurance programs. 27 Then, there are two types of sharia insurance products from its manufacture, namely standard and non-standard products. Standard products are marketed by the decision of the board of directors, in which the benefits, premiums, and closing conditions have been regulated in detail. Meanwhile, non-standard products are made based on consumer demand. 28 In addition, it might also be divided into two forms, namely takāful life (life insurance) and takāful losses (general insurance

Muḍārabah Musytarakah Agreement on Sharia Insurance
The muḍārabah musytarakah contract is a combination of the muḍārabah contract and the musyarakah contract. 30  Agreement on Sharia Insurance. In the fatwa, stated that the muḍārabah musytarakah contract can be carried out by insurance companies because it is the same as the muḍārabah contract law. Muḍārabah musytarakah might be applied to sharia insurance products, both for those containing savings and non-savings elements. 33 The provisions in the fatwa aim for insurance companies, such as life insurance, a. The contract is the muḍārabah musytarakah, which is a combination of the muḍārabah contract and the musyarakah contract.
b. The insurance company (muḍārib) also includes its capital/funds in the investment with the participant's funds. f. The distribution of investment returns can be done with one of the following alternatives: Alternative I: 1) The investment returns are divided between the insurance company (muḍārib) and the participants (ṣahibul māl) by the agreed ratio.
2) The portion of the investment return after being set aside for the insurance company (as muḍārib) is divided between the insurance company (as musytarik) and the participants according to their respective share of capital/funds. Alternative II: 1) Investment returns are divided proportionally between insurance companies (as musytarik) and participants based on their respective capital/fund portions.
2) The portion of the investment return after being set aside for the insurance company (as musytarik) is divided between the insurance company (as muḍārib) and the participants according to the agreed ratio.
3) In the event of a loss, the insurance company (as musytarik) bears the loss by the portion of capital or funds included.
It may be understood that each party has a certain position in the muḍārabah musytarakah contract. In this contract, the insurance company acts as a manager (muḍārib) as well as an investor (musytarik). Meanwhile, insurance participants in saving products are investors (ṣahibul māl). Meanwhile, the participants (policyholders) collectively in non-saving products act as investors (ṣahibul māl). In terms of investing funds in a muḍārabah musytarakah contract, the insurance company as the holder of the trust is obliged to invest the funds -collected from participants -following sharia principles.

Disputes in The Muḍārabah Musytarakah Agreement on Sharia Insurance
A dispute in Indonesian is defined as something that causes a fight or difference of opinion. 36 In the realm of insurance, differences of opinion can occur between participants and the insurer due to discrepancies between what the parties expect or the occurrence of something that is not found in the initial provisions, for example in payment of claims. Or, the insurance company does not accept the claim submitted by the participant due to certain conditions or reasons. And, all of it can also occur because of a party that is in default.
In more detail, several things can lead to disputes or insurance disputes, c. The difference perception occurs between participants and the sharia insurance.
This differences often occur, as in the case of determining the number of claims to be accepted. This is because the insured often assumes that all risks are covered, such as medical expenses. Another example is the differences of opinion in assessing the size of the loss. Considering the muḍārabah musytarakah contract, problems can arise from all parties involved. First, the manager who also invest the funds (musytarik). In this case, it also gets a share of profits based on the portion of the capital investment. Second, related to the distribution or calculation of profits between the manager (muḍārib) and the owner of the funds. Third, the calculation of the guarantee in a loss. Problems might arise, that lawsuits and complaints came from parties.
Seeing the muḍārabah musytarakah contract, the parties involved in this contract wish to benefit from the sharia insurance product. For example, the owner of capital not only entrusts his funds to sharia insurance but also wants to benefit from the funds he has deposited. Then, the Sharia Insurance also does not only want to be a place for depositing funds but also wants to benefit from what is deposited. In this case, the insurance company usually invests these funds in certain things.
The lack of knowledge of the parties involved in the muḍārabah musytarakah contract will trigger a dispute. Then, it possible that there are parties who commit fraud, either the manager or the owner of the funds.

Normative Analysis of Muḍārabah Musytarakah Dispute Resolution on Sharia Insurance
Sharia insurance is regulated by several rules, including:  Article 1 paragraph 2, it was disclosed that the way of sharia insurance in the context of managing contributions aims to help and protect each other and to provide compensation to participants or policyholders due to losses and the like. The sharia principles are referred to as stated in Article 1 paragraph 3, namely based on fatwas issued by institutions that have the authority to determine fatwas in the field of sharia.
The supervision of sharia insurance is performed by the Financial Services Authority (OJK) as a regulatory and supervisory agency for the financial services sector (Article 1 paragraph 35). Insurance companies are required to submit reports, information, data, and/or documents to OJK (Article 22 paragraph 1). This is also confirmed in Article 57 paragraph 1.
There are some standard provisions for business actors that insurance companies must pay attention to, including policies, premiums, or contributions, underwriting and policyholder identification, the insured, settlement of claims, expertise in the field of insurance, distribution or marketing of products, handling of policyholder complaints, and other standards related to business operations (Article 26 paragraph 1). This standard is regulated to avoid the emergence of problems in the future. And, it might be stated as an effort to avoid sharia insurance disputes.
If there are claims or complaints from participants and other parties involved, the sharia insurance company is obliged to handle with a fast, simple, accessible and fair process (Article 31 paragraph 3). Sharia insurance companies are prohibited from taking actions that can delay the settlement or payment of claims, or not taking the actions that should be taken (Article 31 paragraph 4).
Regarding dispute resolution, sharia insurance companies are required to become members of mediation institutions whose function is to resolve disputes between sharia insurance companies and participants, or other parties. The mediation institution must be independent and impartial, with written approval from the OJK. In the settlement of this dispute, the outcome of the mediation agreement is final and binding on the parties (Article 54). Principles for the Implementation of Insurance Businesses and Reinsurance Businesses with Sharia Principles. In Article 1 Paragraph 11, the muḍārabah musytarakah contract is a tijārah contract that gives power to the company as muḍārib to manage the investment of tabarru' funds and/or participant investment funds, which are combined with the company's assets, according to the power or authority is given, with compensation in the form of profit-sharing (nisbah) whose amount is determined based on the composition of the combined assets and has been agreed in advance.
This PMK also contains several things that must be considered in the muḍārabah musytarakah contract. First, the rights and obligations of participants collectively and/or individual participants as ṣahibul māl (owners of funds). Second, the rights and obligations of the company as muḍārib (fund manager) including the company's obligation to bear all losses incurred in investment management activities caused by intentional mistakes, negligence or default by the company. Third, limit of authority granted by the participant to the company. Fourth, the method and time of determining the participants' assets and the company's assets. Then profit sharing (ratio), method, and time of distribution of investment returns. And, other agreed terms (Article 12). In the KMK, the muḍārabah musytarakah contract in sharia insurance, provisions related to default or negligence in the future, including the settlement of defaults must be regulated.
The supervision is carried out by the Sharia Supervisory Board (DPS) related to the implementation of the basic principles of operating the insurance business and reinsurance business, following sharia principles. The results of the supervision must be Reinsurance Companies. This POJK aims to complete the Insurance Act. Concerning the settlement of disputes over the use of Insurance Agents in marketing activities of sharia insurance products, these are resolved by deliberation and consensus. If there is no agreement among the parties who dispute, the settlement will be settled through an association that is by the business activities carried out by the sharia insurance company, or the sharia unit of the insurance company (Article 21 paragraphs 1 and 2). This regulation also does not explain the settlement of sharia insurance disputes that occur among insurance companies and participants, or with other institutions involved in sharia insurance. The dispute resolution referred to this regulation is a dispute related to policy transfer (twisting) or piracy of insurance agents (poaching).
Thus, the reference regarding the settlement of sharia insurance disputes in litigation still refers to the Law on Religious Courts.
The sharia companies are obliged to bear all the losses when they suffers a loss that occurs in risk management or investment activities caused by intentional mistakes, negligence, or default by the sharia insurance company. This rule is based on the wakalah bil ujrah contract, the muḍārabah contract, and the muḍārabah musytarakah contract (Article 54, paragraph 8). The two DSN-MUI fatwas stipulate that the settlement of sharia insurance disputes, especially in the muḍārabah musytarakah contract, is resolved by deliberation.
If an agreement is not reached through deliberation, it will be resolved with the assistance of the Sharia Arbitration Board. The Sharia Arbitration Board as a dispute resolution outside the litigation route, namely as a complaint institution, cannot resolve sharia insurance disputes if the dispute is not submitted to the Sharia Arbitration Board.
In Indonesia, it is known as BASYARNAS (National Sharia Arbitration Board), which is a member of the MUI organization as the National Sharia Council.
In the provisions of Article 60 of Law Number 30 of 1999 on Arbitration and Alternative Dispute Resolution, it is stipulated that the arbitration is final and has permanent legal force and is binding on the parties. Thus, the parties must implement the decision voluntarily. However, if the decision cannot be done voluntarily, then by the provisions of Article 61, the BASYARNAS decision is carried out based on an order from the chairman of the court, at the request of one of the disputing parties.

Analysis of Dispute Resolution on Sharia Insurance Policies
There are some types of dispute resolution options in a sharia insurance general policy, as the previous research which suggests provisions for dispute resolution in some sharia insurance policies.They are as follows: suggestions so that business activities are following the sharia principles.

D. Conclusion
There are alternatives (