9.2.1. Application

TRR 9.2.2 to 9.2.5 apply to a Takaful Operator that is not required to have an Approved Actuary. Note: For the Takaful Operators that are required to have an Approved Actuary, see TRR 2.4.2 (Mandatory appointments).

9.2.2. Actuarial reporting requirements for general Takaful business

The Governing Body of a Takaful Operator to which this Rule applies:

(a) must consider annually whether to commission an independent actuary to report on its business; but

(b) must commission such a report at least once every 3 years.

9.2.3. Qualifications of independent actuary

(1) If a Takaful Operator decides to commission an actuarial report, it must appoint, to prepare the report, an individual who:

(a) has the qualifications set out in sub-rule (2); and

(b) satisfies the criteria set out in sub-rule (3).

(2) The qualifications are:

(a) that he or she has appropriate formal qualifications and is a member of a recognised professional body;

(b) that he or she has at least 5 years’ relevant experience in providing actuarial services to Takaful Operators, either in the AIFC or in other jurisdictions; and

(c) that the experience is sufficiently recent to ensure that he or she is familiar with current issues in the provision of such services to Takaful Operators.

(3) The criteria are the following:

(a) that he or she does not exercise any Controlled Function or Designated Function for the Takaful Operator or a related body corporate (except a related body corporate that is a subsidiary of the Takaful Operator);

(b) that he or she is not:

1. (i) an auditor (under section 136(1) of the Companies Regulations for the Takaful Operator;
2. (ii) an Employee or Director of an entity of which that auditor is an Employee or Director; nor
3. (iii) a partner of that auditor.

9.2.4. Actuarial reports

(1) The actuary who prepares an actuarial report for the purposes of TRR 9.2.2 must sign it.

(2) The Takaful Operator concerned must ensure that the actuary is given appropriate access (that is, such access as the actuary reasonably believes to be necessary to prepare the report) to:

(a) all relevant data, information, reports and staff of the Takaful Operator; and

(b) so far as possible, any contractor of the Takaful Operator.

(3) The report must give details, for each category of General Takaful Business that the Takaful Operator conducts, of the following matters:

(a) recent trends in the business;

(b) the actuary’s estimate of the value of the Takaful Liabilities and assets arising in respect of those liabilities, determined in accordance with TRR 8 (Valuation);

(c) if the assumptions or the valuation method used for that estimate differ from those adopted for the previous valuation of those assets and liabilities, the effect, as at the date on which the actuary signs the report, of those changes on the value of those liabilities and assets;

(d) the adequacy and appropriateness of the data that the Takaful Operator made available to the actuary;

(e) the procedures that the actuary used to assess the reliability of that data;

(f) the model or models that the actuary used;

(g) the assumptions that the actuary used in the valuation process (including, without limitation, assumptions made as to inflation and discount rates, future expense rates and, if relevant, future investment income);

(h) how the actuary estimated the variability of the estimate;

(i) the nature and findings of sensitivity analyses that the actuary undertook.

(4) The Takaful Operator’s Governing Body must give a copy of the signed report to the AFSA on or before the date on which the Takaful Operator must give its next annual prudential return to the AFSA under TRR 13.1.1 (Obligation to prepare prudential returns).

9.2.5. Additional powers of the AFSA

(1) If at any time the AFSA believes it is necessary that a Takaful Operator to which this Rule applies should obtain an actuarial report relating to the Takaful Operator’s operations, risk management or financial affairs, it may direct the Takaful Operator to do so at the Takaful Operator’s expense.

(2) The Takaful Operator:

(a) must appoint an actuary who satisfies the criteria in TRR 9.2.3 (Qualifications of independent actuary) to prepare the report; and

(b) must notify the AFSA of the name and credentials of the actuary appointed.

(3) If the AFSA is of the opinion that the actuary appointed by the Takaful Operator fails to satisfy the relevant criteria, the AFSA may direct the Takaful Operator to appoint an actuary chosen by the AFSA to prepare the report.

(4) The Takaful Operator must submit the report to the AFSA within 3 months of the direction, unless the AFSA allows an extension of time in writing.