14.1.1. Definition of Captive Takaful Operator

A Captive Takaful Operator is an Authorised Firm with a Licence to carry on Takaful Business only for the business or operations of the Group to which it belongs.

14.1.2. Definition of Captive Takaful Business

(1) Captive Takaful Business is the business of Effecting or Carrying out Takaful Contracts only for the business or operations of the Group to which the Captive Takaful Operator belongs.

(2) General Captive Takaful Business is Captive Takaful Business in relation to General Takaful Contracts.

(3) Family Captive Takaful Business is Captive Takaful Business in relation to Family Takaful Contracts.

14.1.3. Captive Takaful Operator to be incorporated in the AIFC

Only an Authorised Firm which is incorporated under the laws of the AIFC may apply to the AFSA for a Licence to conduct Captive Takaful Business.

14.2.1. Captive Takaful Operator may be a Protected Cell Company

(1) An Authorised Firm which is a Protected Cell Company incorporated under the Companies Regulations may apply to the AFSA for a Licence to conduct Captive Takaful Business.

(2) A Protected Cell Company may not otherwise carry on Takaful Business.

14.2.2. Captive Takaful Operators that are PCCs not to create cells without consent

A Captive Takaful Operator that is a Protected Cell Company must not create a Cell without the written consent of the AFSA.

14.2.3 Captive Takaful Operators that are PCCs to conduct Captive Takaful Business only through cells

A Captive Takaful Operator that is a Protected Cell Company must ensure that, when it conducts Captive Takaful Business, each Takaful Contract is attributable to a particular Cell of the Captive Takaful Operator.

14.2.4 Captive Takaful Operators that are PCCs not to conduct Captive General and Family Takaful Business through same Cell

A Captive Takaful Operator that is a Protected Cell Company must not conduct both Captive General Takaful Business and Captive Family Takaful Business through the same Cell.

14.3.1. Application of TRR 2 (Governance Framework)

A Captive Takaful Operator must comply with the requirements of TRR 2 (Governance Framework) in full.

14.3.2. Application of TRR 3 (Risk Management Strategy)

A Captive Takaful Operator must comply with TRR 3 (Risk Management Strategy) in full.

14.3.3. Application of TRR 4 (Own Risk and Solvency Assessment (ORSA)).

A Captive Takaful Operator must comply with TRR 3 (Own Risk and Solvency Assessment (ORSA)) in full.

14.3.4. Application of TRR 5 (Capital adequacy requirements)

A Captive Takaful Operator must comply with the requirements of TRR 5 (Capital adequacy requirements) in full, subject to the rules in TRR 14.4 (Capital adequacy requirements for Captive Takaful Operators).

14.3.5 Application of TRR 6 (Investment)

A Captive Takaful Operator must comply with TRR 6 (Investment) in full.

14.3.6 Application of TRR 7 (Segregation of Family Takaful assets and liabilities)

A Captive Takaful Operator carrying on Family Captive Takaful Business must comply with TRR 7 (Segregation of Family Takaful assets and liabilities) in full.

14.3.7 Application of TRR 8 (Valuation)

A Captive Takaful Operator must comply with TRR 8 (Valuation) in full.

14.3.8 Application of TRR 9 (Actuarial Reporting)

A Captive Takaful Operator must comply with TRR 9 (Actuarial reporting) in full.

14.3.9 Application of TRR 10 (Takaful Operators that are members of Groups)

A Captive Takaful Operator must comply with TRR 10 (Takaful Operators that are members of Groups) in full.

14.3.10 Application of TRR 11 (Transfers of Takaful Business)

A Captive Takaful Operator must comply with TRR 11 (Transfer of Takaful business) in full.

14.3.11 Application of TRR 12 (Takaful Operators in run-off)

A Captive Takaful Operator must comply with TRR 12 (Takaful Operators in run-off) in full.

14.3.12. Application of TRR 13 (Prudential Returns)

A Captive Takaful Operator must comply with TRR 13 (Prudential returns) in full.

14.4.1. Minimum Capital Requirement (MCR) for a Captive Takaful Operator

For the purposes of Schedule 4 of TRR, the Capital Floor for a Captive Takaful Operator is

• (a) US$150,000 for a Captive Takaful Operator carrying on Captive General Takaful Business;
• (b) US$150,000 for a Captive Takaful Operator carrying on Captive Family Takaful Business; or
• (c) An amount specified in writing by the AFSA.

14.4.2. Minimum Capital Requirement for a Protected Cell Company

(1) Subject to (2), each Cell of a Protected Cell Company must calculate its Minimum Capital Requirement in accordance with TRR 5.2.2 (Obligation to calculate MCR) as if it were a stand-alone Takaful Operator.

(2) For a Captive Takaful Operator that is a Protected Cell Company, the Capital Floor only applies to the overall Protected Cell Company and there is no Capital Floor for each Cell or the Core.

14.4.3. Prescribed Capital Requirement for a Protected Cell Company

Each Cell of a Protected Cell Company must calculate its Prescribed Capital Requirement in accordance with TRR 5.2.3 (Obligation to calculate PCR) as if it were a stand-alone Takaful Operator.

14.4.4. Eligible Capital of a Protected Cell Company

(1) Each Cell of a Protected Cell Company must calculate its Eligible Capital in accordance with TRR 5.2.1 (Obligation to calculate Eligible Capital).

(2) The Core of a Protected Cell Company must calculate its Eligible Capital in accordance with TRR 5.2.1 (Obligation to calculate Eligible Capital).

(3) In calculating its Eligible Capital, a Cell may only rely upon Non-Cellular Assets where it has entered into a recourse agreement with the Core pursuant to which it is entitled to rely upon such Non-Cellular Assets.

(4) The Core of a Protected Cell Company must not enter into a recourse agreement with a Cell where the total capital thereby made available to Cells of the Protected Cell Company would exceed the Eligible Capital of the Core.