2.2.1. Takaful Funds – establishment and attribution of business

(1) A Takaful Operator must establish and maintain one or more Takaful Funds for its Takaful Business.

(2) A Takaful Operator must attribute all Takaful Business that it conducts to one or more of the Takaful Funds it operates.

2.2.2. Takaful Funds – Allocation of assets

(1) A Takaful Operator must ensure the assets allocated to a particular Takaful Fund are only allocated, apart from the exceptions provided for in the rest of this rule below, for the purposes of the Takaful Fund to which it is attributed and must not be allocated or made available for any other purpose of the Takaful Operator.

(2) Rule 2.1.2 (1) above does not preclude the reimbursement of expenditures borne by the shareholders of the Takaful Operator (in the same or the preceding financial year) in discharging liabilities wholly or partly attributable to a Takaful Fund.

(3) Rule 2.1.2 (1) above does not apply to the payment of management fees by a Takaful Fund to the Takaful Operator or an investment manager to whom management of the Takaful Fund has been delegated, even where the manager is the shareholder of the Takaful Operator, provided that the Shari’ah supervisory board of the Takaful Operator has approved those fees.

(4) Rule 2.1.2 (1) above does not prevent a Takaful Operator from exchanging, at fair market value, Takaful business assets of any Takaful Fund for other assets of the Takaful Operator including assets held by another Takaful Fund or assets held by the shareholder of the Takaful Operator.

2.2.3. Takaful Funds – Fair transactions

A Takaful Operator must have adequate arrangements for ensuring that transactions involving assets of the Takaful Operator (other than transactions outside its control) do not operate unfairly between a Takaful Fund established and maintained under rule 2.1.1 and the shareholder assets of the Takaful Operator or, in the case where the Takaful Operator has more than one Takaful Fund, between those Takaful Funds.

2.2.4. Takaful Funds – Prohibition on making or attributing loans

A Takaful Operator must not make or attribute any loans from a Takaful Fund it operates to another Takaful Fund or to any other party, including but not limited to:

• (a) the Takaful Operator;
• (b) a person in a controlled function;
• (c) a participant (policyholder) in the Takaful Fund; and
• (d) a controller or person with close links to the Takaful Operator.