1.1 Application

This Schedule applies to every AIFC-Incorporated Takaful Operator.

1.2. Purpose

Guidance

1. In assessing the adequacy of an AIFC-Incorporated Takaful Operator’s financial resources, attention must be paid not only to the types of events or problems that it might encounter, but also the quality of the support provided by various types of capital instruments.

2. The purpose of this Schedule is to identify those capital instruments that can be included as Eligible Capital to meet the AIFC-Incorporated Takaful Operator’s minimum capital requirement. In determining the Rules governing whether a capital instrument is adequate for supervisory purposes, the AFSA has identified the following relevant matters, namely the extent to which each instrument:

• (a) provides a permanent and unrestricted commitment of funds;
• (b) is freely available to absorb losses from business activities;
• (c) does not impose any unavoidable servicing charges against earnings;
• (d) ranks behind the claims of policyholders and other creditors in the event of the windingup of the AIFC-Incorporated Takaful Operator.

3. As Takaful Operators authorised to conduct Takaful Business in or from the AIFC in the legal form of a Branch will be subject to the regulatory capital requirements applicable in their home jurisdiction, the requirements of this Schedule do not apply to Branches.