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Article (3) – Asset Distribution and Allocation Limits

IA-BOD-RES 26/2014 Effective from 28/12/2014
  1. For asset distribution and allocation limits, the following apply:
    Type of Invested AssetMaximum Limit for aggregate exposure in a particular asset classSub-limit for exposure to a single counter-party
    Real Estate30%No Sub Limit
    Equity instruments in listed and not listed companies within UAE.30%10%
    Equity instruments issued by companies listed and not listed outside UAE.20%10%
    Government securities/instruments issued by the UAE and/or by one of the Emirates in the UAE.100%25%
    Government securities/instruments issued by (A) rated countries.80%25%
    Cash and deposits with Islamic Financial Institutions within the UAE (e.g. current account, demand deposits, term deposits, notice deposits, certificates of deposit, etc.)Minimum 5%50%
    Loans secured by insurance policies of persons and accumulation of funds operations (excluding unit-linked funds’ related policies) issued by the Company.30%No Sub Limit
    Derivatives or complex Islamic financial instruments to be used for hedging purposes only.1%No Sub Limit
    Secured loans, deposits with non-banks, debentures, Sukuk & other debt instruments which are rated strong or very strong by reputed and independent rating agency.30%20%
    Other Invested Assets10%No Sub Limit

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     


     

     

  2. The above limits shall be applicable for Total Invested Assets.
     
  3. For the purpose of the application of the limits contained in paragraph (1) of this Article, real estate shall be at market value. As an exception to what is stated in paragraph (1) of this Article, the Authority may allow, in specific cases, Takaful operators to invest in real estate with a maximum of up to 40% on the basis of a request from the Company stating the reasons for the exception, along with an investment risk analysis report as described in Article (10) of the regulation herein.
     
  4.  As an exception to what is stated in paragraph (1) of this Article, Derivative limits may exceed 1% if employed to hedge against currency fluctuation only.
     
  5. Statutory Deposits provided as collateral for the Company to fulfill its obligations are excluded from the concentration and asset allocation limits listed in paragraph (1) of this Article.
     
  6. The limits mentioned in this Article are not applicable to unit-linked funds.
     
  7. For branches of Foreign Takaful Operators, the limits mentioned in paragraph (1) of this Article shall be applicable to the assets backing the insurance fund for UAE policies only.
     
  8. In addition to the above, asset allocation limits shall ensure that investments made are compliant with the Islamic Shari’a provisions.
     
  9. Strong and very strong rating by an independent agency for investments inside or outside UAE would mean ratings equivalent to or better than following weighted average ratings for each asset class portfolio:
S&PFitchA.M. BestMoody’s
AAAA2