• PINS Chapter 6 PINS Chapter 6 Additional requirements for takaful entities

    Editorial changes (as from 1 January 2015).

    • PINS Part 6.1 PINS Part 6.1 Application and purpose

      Editorial changes (as from 1 January 2015).

      • PINS 6.1.1 PINS 6.1.1 Application of ch 6

        (1) This Chapter applies to a takaful entity.
        (2) In the case of a takaful entity that is not an Islamic financial institution, this Chapter applies only to the part of the entity's business that is Islamic financial business.
        Editorial changes (as from 1 January 2015).

        • PINS 6.1.1 Guidance

          1 A takaful entity is required to comply with the requirements in CTRL, Chapter 9 and any other relevant regulatory requirements.
          2 This Chapter sets out additional requirements applying to takaful entities. A takaful entity must also comply with all the other requirements in these rules relevant to the takaful business it conducts.
          Editorial changes (as from 1 January 2015)
          Amended by QFCRA RM/2021-1 (as from 1st July 2021).

      • PINS 6.1.2 PINS 6.1.2 [Deleted]

        Deleted by QFCRA RM/2012-3 (as from 1st February 2013).

        • PINS 6.1.2 Guidance [Deleted]

          Deleted by QFCRA RM/2012-3 (as from 1st February 2013).

    • PINS Part 6.2 PINS Part 6.2 Establishment of takaful funds

      Editorial changes (as from 1 January 2015).

      • PINS 6.2.1 Takaful funds to be established

        A takaful entity must establish and maintain 1 or more funds (takaful funds) for its takaful business.

        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

    • PINS Part 6.3 PINS Part 6.3 Attribution of contracts to a takaful fund

      Editorial changes (as from 1 January 2015).

      • PINS 6.3.1 Takaful business to be attributed to takaful funds

        A takaful entity must attribute all takaful business that it conducts to 1 or more takaful funds.

        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

    • PINS Part 6.4 PINS Part 6.4 Segregation of Takaful Funds

      Editorial changes (as from 1 January 2015).

      • PINS 6.4.1 Books of accounts to be maintained

        A takaful entity must:

        (a) maintain separate books of account in respect of each takaful fund it maintains; and
        (b) maintain any additional books of account required by this Chapter for its takaful business.
        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • PINS 6.4.2 Takaful entities — accounting and other records

        A takaful entity must maintain such accounting and other records as are necessary for:

        (a) identifying the assets and liabilities attributed to a takaful fund established and maintained by it under PINS Rule 6.2.1; and
        (b) complying with the requirements of PINS Rule 8.4.2(a).
        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • PINS 6.4.3 Allocation of assets to takaful funds

        A takaful entity must ensure the assets allocated to a particular takaful fund are only allocated, apart from the exceptions provided for in PINS Rule 6.4.4, for the purposes of the takaful fund to which it is attributed as required by PINS Rule 6.3.1 and must not be allocated or made available for any other purpose of the takaful entity.

        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • PINS 6.4.4 Allocation of assets to takaful funds — exceptions

        (1) PINS Rule 6.4.3 does not preclude 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 takaful fund.
        (2) PINS Rule 6.4.3 does not apply to the payment of management fees by a takaful fund to the takaful manager even where the manager is the shareholder, provided that the Shari'a supervisory board has approved those fees.
        (3) PINS Rule 6.4.3 does not prevent a takaful entity from exchanging, at fair market value, takaful business assets of any takaful fund for other assets of the insurer including assets held by another takaful fund or the shareholder.
        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • PINS 6.4.5 Transactions in assets to be fair

        A takaful entity must have adequate arrangements for ensuring that transactions involving assets of the takaful entity (other than transactions outside its control) do not operate unfairly between a takaful fund established and maintained under PINS Rule 6.2.1 and the shareholder assets of the takaful entity or, in the case where the takaful entity has more than 1 'identified fund', between those funds.

        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

    • PINS Part 6.5 PINS Part 6.5 Loans from a takaful fund

      Editorial changes (as from 1 January 2015).

      • PINS 6.5.1 Prohibition on making or attributing loans

        A takaful entity must not make or attribute any loans from a takaful fund it maintains to another takaful fund or to any other party, including but not limited to:

        (a) the takaful operator (the shareholder fund);
        (b) a person in a controlled function;
        (c) a participant (policyholder); and
        (d) a controller or person with close links to the takaful entity.
        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

    • PINS Part 6.6 PINS Part 6.6 Distribution of a surplus or funding a deficit in a takaful fund

      Editorial changes (as from 1 January 2015).

      • PINS 6.6 Guidance

        1. Takaful entities by definition are co-operative in nature and, as such, participants (policyholders) are entitled to a return of any surpluses of the takaful funds operated by the takaful entity.
        2. A takaful entity is also required, under CTRL, rule 9.4.4, to disclose in its financial statements all matters set out in AAOIFI 12 and 13, which includes among other matters the basis for treating insurance deficits and surpluses in a takaful fund.
        Amended by QFCRA RM/2015-3 (as from 1st January 2016)
        Amended by QFCRA RM/2021-1 (as from 1st July 2021).

      • PINS 6.6.1 Policies about surpluses and deficits

        (1) Every takaful entity must have a written policy, or subject to PINS Rule 6.6.2, policies, for determining the surplus or deficit arising from its takaful business, the basis of distributing that surplus or deficit between the participants and the shareholders, and the method of transferring any surplus or deficit to the participants.
        (2) The policy or policies must comply with all relevant AAOIFI standards including Financial Accounting Standard No. 13 'Disclosure of Bases for Determining and Allocating Surplus or Deficit in Islamic Insurance Companies'.
        (3) Each policy must be approved by the takaful entity's Shari'a supervisory board.
        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • PINS 6.6.2 When 2 or more policies permitted

        More than 1 policy may be developed where the takaful entity offers different categories of takaful business.

        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • PINS 6.6.3 PINS 6.6.3 Copies of policies to be given to Regulatory Authority

        (1) A takaful entity must provide a copy of the policy referred to in PINS Rule 6.6.1 to the Regulatory Authority immediately following its approval by the takaful entity's Shari'a supervisory board, but within 1 business day after the day the approval is given.

        Examples

        See examples to rule 3.9.1 on meaning of 'within 1 business day'.
        (2) A takaful entity must not amend the policy once it has been provided to the Regulatory Authority without the approval of the Shari'a supervisory board and the Regulatory Authority. A revised copy of the policy must be provided to the Regulatory Authority immediately following that approval.
        (3) A takaful entity must ensure that a copy of each policy approved under PINS Rule 6.6.1 or PINS Rule 6.6.3(2) forms part of each and every insurance policy sold by the takaful entity.
        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

        • PINS 6.6.3 Guidance

          In considering whether to approve any changes to a policy under PINS Rule 6.6.3(2), the Regulatory Authority will consider the impact of the proposed amendments on existing policyholders of the takaful entity affected by the proposed amendments.

          Amended by QFCRA RM/2012-5 (as from 1st July 2013).

      • PINS 6.6.4 Surplus or deficit to be determined annually

        (1) On an annual basis, every takaful entity must determine any surplus or deficit arising on each separate takaful fund.
        (2) A takaful entity must not distribute a surplus or deficit from a takaful fund it has established and maintains where the takaful business attributed to this takaful fund is long term insurance business until the value of this surplus or deficit has been determined by an approved actuary in accordance with rule 9.1.3(4)(h).
        (3) Any distribution must be performed within 4 months of the reference date of the actuarial investigation referred to in (2).
        Amended by QFCRA RM 2019-1 (as from 28th March 2019).

      • PINS 6.6.5 Reports of distributions of surplus or deficit to Regulatory Authority

        A takaful entity must report to the Regulatory Authority all distributions of profit or surplus (however called or described) to policyholders within 15 business days of the date of declaration of the distribution.

        Amended by QFCRA RM/2015-3 (as from 1st January 2016).

      • PINS 6.6.6 When distributions not permitted

        A takaful entity must not make any distributions to participants, regardless of the rules governing the takaful entity, if the takaful entity does not, or through the payment of the distribution, would not, meet its minimum capital requirement.

        Amended by QFCRA RM/2015-3 (as from 1st January 2016).