For the purposes of this Standard, the following words and phrases shall have the meanings stated below. |
| a. | Senior Management: The individuals or body responsible for managing the Company on a day-to-day basis in accordance with strategies, policies and procedures set out by the Board, generally including, but not limited to, the chief executive officer, chief financial officer, chief risk officer, and heads of functions of compliance, Internal Shari’ah Control, internal audit and Internal Shari’ah Audit.
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| b. | Independence: Ensuring that the ISSC is not subject to any form of undue influence when issuing resolutions and Fatwas in accordance with the Shari’ah parameters, and ensuring that the Internal Shari’ah Control Division and Internal Shari’ah Audit Division are also not subject to any form of undue influence. This should be carried out to strengthen the confidence of Participants, shareholders and stakeholders in the Company’s compliance with Islamic Shari’ah Provisions.
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| c. | External Shari’ah Audit: An annual assessment conducted by external body to inspect and assess the Company’s compliance with Islamic Shari’ah Provisions and the level of adequacy and effectiveness of its Shari’ah governance systems.
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| d. | Internal Shari’ah Audit: The regular process to inspect and assess the Company’s compliance with Islamic Shari’ah Provisions and the level of adequacy and effectiveness of Company’s Shari’ah governance systems.
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| e. | Islamic Shari’ah Provisions:
| a. | The resolutions, Fatwas, regulations and standards issued or approved by the Higher Shari’ah Authority in relation to businesses and activities of the Company ("HSA’s Resolutions"),
| | b. | The resolutions and Fatwas issued or approved by the Internal Shari’ah Supervision Committee of the respective Company, in relation to businesses and activities of such Company ("ISSC’s Resolutions"), provided that they do not contradict HSA’s Resolutions.
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| f. | Contribution: The consideration which the Participant undertakes to pay on basis of the donation (Tabarru’) commitment for his/her subscription in Participants’ Account with the Company in order to compensate the damages or pay the benefits to the eligible beneficiary.
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| g. | Takaful Insurance: A collective contractual arrangement aiming at achieving mutuality and cooperation among a group of Participants against certain risks, whereby each Participant pays certain Contribution to form an account called the Participants’ Account.
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| | This account is used for paying the entitled compensations and/or benefits when risk is realized, in accordance with the terms and conditions. The Company manages this account and invests its funds.
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| | All transactions of the Company shall be in accordance with the Islamic Shari’ah Provisions.
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| h. | Participants’ Account: An account created by the Company to deposit the Contribution amounts, the returns from its investment, and the revenues from the Takaful Reinsurance (Retakaful). The personal capacity implications should be attributed to this account and it should have financial independency from the Company. This account shall be responsible for compensating Participants, beneficiaries and affected third parties, in accordance with the terms of the Takaful Insurance Policies. The Wakala fees and the amounts of compensation and/or benefits are paid to the Participants from this account, in addition to the relevant allocations or reserves, as determined by the Central Bank. The Company must manage the account on behalf of the Participants by Wakala and it must represent it in all matters related thereto.
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| | This account is termed as (Risk Coverage Account) in family Takaful insurance.
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| i. | Takaful Insurance Accounts: All accounts existing at the Company, including Participants’ Accounts and/or Participants’ Accounts for family Takaful insurance, and shareholders’ accounts, noting that the Takaful Insurance is exclusively of the Participants’ Accounts.
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| j. | Subsidiary: An entity (the 'first entity') is a subsidiary of another entity (the 'second entity') if the second entity:
| a. | holds a majority of the voting rights in the first entity;
| | b. | is a shareholder of the first entity and has the right to appoint or remove a majority of the Board or managers of the first entity;
| | c. | is a shareholder of the first entity and controls alone, pursuant to an agreement with other shareholders, a majority of the voting rights in the first entity; or
| | d. | if the first entity is a subsidiary of another entity which is itself a subsidiary of the second entity.
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| k. | Affiliate: An entity that, directly or indirectly, controls, is controlled by, or is under common control with another entity. The term control as used herein shall mean the holding, directly or indirectly, of voting rights in another entity, or of the power to direct or cause the direction of the management of another entity.
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| l. | Fatwas: Juristic opinions on any matter pertaining to Shari’ah issues in Takaful Insurance, issued by HSA or ISSC.
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| m. | Internal Shari’ah Control Division (or Section): A technical division (or section) in the Takaful Insurance Company that supports the ISSC in its mandate.
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| n. | Internal Shari’ah Supervision Committee: A body appointed by a Company, comprised of scholars specialized in Islamic financial transactions, which independently supervises transactions, activities, and products of the Company and ensure its compliance with Islamic Shari’ah Provisions in all its objectives, activities, operations, and code of conduct.
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| o. | Board: Takaful Insurance Company’s board of directors.
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| p. | Group: A group of entities which includes an entity (the ‘first entity’) and:
| a. | any Parent of the first entity;
| | b. | any Subsidiary of the first entity or of any Parent of the first entity;
| | c. | any Affiliate.
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| q. | Participant: An individual that holds a Participation Membership Policy and a Takaful Insurance Policy, who undertakes to regularly pay the Contribution, and who, or his/her legal heirs or assignees, where assignment is allowable, shall have the right to receive compensations or benefits provided by the Participants’ Account.
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| r. | Shari’ah Non-Compliance Risks: Probability of financial loss or reputational risk that Takaful Insurance Company might incur for not complying with Islamic Shari’ah Provisions.
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| s. | Confidential Information: Information that is publicly unavailable and which may only be disclosed where permitted.
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| t. | Regulation: Regulation regarding Takaful Insurance issued in 2022.
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| u. | Company/Companies: The Takaful Insurance Company, which is incorporated and practices its business in accordance with the provisions of the Law, the Executive Regulation and the Regulation regarding Takaful Insurance, and whose all businesses and activities are in accordance with the Islamic Shari’ah Provisions.
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| v. | Higher Shari’ah Authority: An authority that exercises the mandates and authorities stipulated in Regulation regarding Takaful Insurance and the notices issued by the Central Bank.
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