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  • CA-8.3 CA-8.3 Segregation of Funds

    • CA-8.3.1

      Where an insurer carries out Takaful business:

      (a) In the case of family Takaful business, it must comply with Chapter CA-3 of the Capital Adequacy Module;
      (b) It must maintain separate books of account in respect of each kind of business;
      (c) It must maintain any additional books of account required by this Module for either its general Takaful or family Takaful business; and
      (d) The transactions relating to each kind of business must be maintained separately for that business and must be carried to and form a separate fund or funds.
      Amended: January 2007
      Amended: October 2008

    • CA-8.3.2

      A Takaful firm must maintain such accounting and other records as are necessary for:

      (a) Identifying the assets representing the fund or funds maintained by it under Paragraph CA-8.3.1 above for each kind of business that it carries on;
      (b) Identifying the liabilities attributable to fund or funds maintained by it under Paragraph CA-8.3.1 above for each kind of business that it carries on; and
      (c) Complying with the accounting standards established by the 'Accounting and Auditing Organisation for Islamic Financial Institutions' ('AAOIFI').
      Amended: January 2007
      Amended: October 2008

    • CA-8.3.3

      Other than the explicit exceptions included in Paragraphs CA-8.3.4 and CA-8.3.5, a Takaful firm's assets allocated to the participants' fund(s) must only be applied for the purposes of the fund to which it is attributed as required by Paragraph CA-8.3.2 and must not be made available for any other purpose of the Takaful firm. This does not however prevent the reimbursement of expenditures borne by the shareholders (in the same or the preceding financial year) in discharging liabilities wholly or partly attributable to a fund or funds.

      Amended: April 2014
      Amended: October 2008
      Amended: January 2007

    • CA-8.3.4

      Paragraph CA-8.3.3 does not apply to the payment of management fees by the fund or funds to the Takaful manager even where the manager is the shareholder provided that the Shari'a Supervisory Board has approved those fees.

      Amended: January 2007
      Amended: October 2008

    • CA-8.3.5

      Paragraph CA-8.3.3 does not prevent a Takaful firm from exchanging, at fair market value, insurance business assets of any fund for other assets of the insurer including assets held by another fund or the shareholder.

      Amended: January 2007
      Amended: October 2008

    • CA-8.3.6

      A Takaful firm which carries on insurance business in Bahrain must have adequate arrangements for securing that transactions involving assets of the Takaful firm (other than transactions outside its control) do not operate unfairly between any of the participants' fund(s) and the shareholder assets of the Takaful firm or, in a case where the Takaful firm has more than one 'identified fund', between those funds.

      Amended: April 2014
      Amended: October 2008
      Amended: January 2007

    • CA-8.3.7

      Where the CBB imposes a financial penalty on a Takaful firm or requires a Takaful firm to compensate participants for any wrongful act of the firm (including any wrongful act committed by an appointed representative of the firm), it must not pay that compensation or financial penalty from any participants' fund(s) and it must not seek to have that compensation or financial penalty reimbursed as part of its management fees.

      Amended: April 2014
      Amended: October 2008
      Amended: January 2007

    • CA-8.3.8

      The Rules in this Chapter in respect of the segregation of funds by a Takaful firm are similar to the Rules set out in Chapter CA-3 relating to long-term insurance business. In the case of a family participants' fund(s) this similarity is most pronounced. However, the Rules set out in Chapter CA-3 still apply even if the participants' fund(s) is a family participants' fund(s), in particular the requirement to separate linked family Takaful business into a separate fund.

      Amended: April 2014
      Amended: October 2008
      Amended: January 2007