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  • CA-8.5 CA-8.5 Determining and Allocating Surplus or Deficit

    • CA-8.5.1

      Every Takaful firm must develop a policy for determining the surplus or deficit arising from Takaful operations, the basis of determining and allocating that surplus or deficit to the participants and the shareholders, and the method of transferring any surplus or deficit to the participants. The policy developed must consider all relevant AAOIFI standards including Financial Accounting Standard No. 13 'Disclosure of Bases for Determining and Allocating Surplus or Deficit in Islamic Insurance Companies'. The policy must be approved by the Shari'a Supervisory Board as well as the board of directors of the Takaful firm.

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

    • CA-8.5.2

      More than one policy may be developed where the Takaful firm offers different types of insurance products. In any event, the company must have separate policies in respect of its general business and its long-term business and any surplus or deficit allocation must be in line with the policy developed under Paragraph CA-8.5.1.

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

    • CA-8.5.3

      On an annual basis, every Takaful firm must determine any surplus or deficit arising on each separate participants' fund. The surplus distribution or remedial action for deficit reduction must be recommended by the actuary (see Paragraphs AA-4.3A.4 and AA-4.3A.5) and endorsed by the Shari'a Supervisory Board and the board of directors of the Takaful firm.

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

    • CA-8.5.4

      The policy developed in accordance with Paragraph CA-8.5.1 must not be amended or changed without the approval of the Shari'a Supervisory Board.

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

    • CA-8.5.4A

      Distribution of surpluses from the Participants' fund(s) is subject to the CBB's prior written approval.

      Added: April 2014

    • CA-8.5.5

      No Takaful firm is permitted to make any distributions to participants if either the participants' fund(s) does not, or through the payment of the distribution, would not meet all the capital available and solvency requirements set out in Chapters 1 and 2 of the Capital Adequacy Module. In addition the surplus distribution must not cause adverse financial implications or a deficit in the participants' fund(s) and the Takaful operator must ensure that the participants' fund(s) is sufficiently liquid to cover any proposed surplus distribution.

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