The doubtful debt is one of the issues in Islamic financial system. Recently the cooperative insurance which comply with the Shari’ah principles emerge in the Islamic financial market. Therefore, The scholars question the rulings related to the doubtful debt in the cooperative insurance in order to secure the rights of creditor and to ease the Islamic transaction with the different level of society.

This paper try to answer the legitimacy of this kind of insurance and concluded that it is valid provided that it fulfils certain conditions related to the principles of Shari’ah. The paper also explain the Shari’ah stand on the legitimacy of doubtful debt as this kind of transaction support the principles of cooperation in Islam. Finally, other related rulings and beneficial ways to implement them was also discussed.

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