7.1.1. Family Takaful Funds to be established

A Takaful Operator conducting Family Takaful Business must either:

• (a) establish and maintain one or more Family Takaful Funds; or
• (b) notify the AFSA that the Takaful Operator is deemed to constitute a single Family Takaful Fund.

7.1.2. Family Takaful Fund

(1) Unless (2) applies, all the Family Takaful Assets of a Takaful Operator constitute its Family Takaful Fund.

(2) Where a Takaful Operator identifies particular Family Takaful Assets in connection with different parts of its Family Takaful Business, the assets identified in relation to each such part constitute separate Family Takaful Funds of the Takaful Operator.

7.1.3. Family Takaful Assets

(1) A Takaful Operator’s Family Takaful Assets are the items in (2), adjusted to take account of:

(a) liabilities in respect of the Takaful Operator’s Family Takaful Business; and

(b) any transfers made out of the Family Takaful Fund in accordance with TRR 7.5.2

(Transfers of assets out of Family Takaful Funds).

(2) The items are:

(a) admissible assets identified by the Takaful Operator as being available to cover liabilities arising under or in connection with Family Takaful Business with due regard to generally accepted actuarial practice (including assets into which those assets have been converted) but excluding any assets identified as being held to cover liabilities in respect of subordinated debt;

(b) any other assets identified by the Takaful Operator as being available to cover its liabilities arising from Family Takaful Business (including assets into which those assets have been converted) including, if the Takaful Operator so elects, assets which are excluded under (a);

(c) premiums and other receivables in respect of Family Takaful Business;

(d) other receipts of the Family Takaful Business; and

(e) all income and capital receipts in respect of the items set out in (2).

7.1.4. Takaful Operator deemed to constitute Family Takaful Fund to be treated as though it had established such fund

A Takaful Operator that is deemed, in accordance with TRR 7.1.1(b), to constitute a single Family Takaful Fund shall be treated for all purposes relating to these Rules as though the Takaful Operator had established a Family Takaful Fund to which all of the assets and liabilities of the Takaful Operator are attributed.

7.1.5. Treatment of Branches

A Takaful Operator that is a Branch and that is subject to a regulatory requirement in another jurisdiction to arrange its affairs in a manner that is equivalent or substantially equivalent to the requirements of TRR 7.1.1 may make an application to the AFSA for that arrangement of its affairs to be deemed to constitute a Family Takaful Fund.

Guidance

If the AFSA approves an application under TRR 7.1.5(1), it will give a written notice to the Branch stating the manner in which the arrangement will be deemed to constitute a Family Takaful Fund.