1.1. The Capital Floor

(1) An AIFC-Incorporated Takaful Operator must maintain a paid up share capital of not less than the Capital Floor, or an equivalent sum in any currency acceptable to the AFSA.

(2) An AIFC-Incorporated Takaful Operator must maintain minimum shareholders’ funds of at least 75% of the Capital Floor or an equivalent sum in any currency acceptable to the AFSA.

(3) The Capital Floor is:

(a) US$7,000,000 for an AIFC-Incorporated Takaful Operator carrying on General Takaful Business;

(b) US$7,000,000 for an AIFC-Incorporated Takaful Operator carrying on Family Takaful Business; or

(c) An amount specified in writing by the AFSA.

1.2. The MCR for General Takaful Business

(1) The MCR for an AIFC-Incorporated Takaful Operator carrying on General Takaful Business is an amount not less than the higher of:

(a) 12% of that Takaful Operator’s gross written contributions for all of the Takaful Funds operated by it during the previous financial year, net of:

(i) the amount of any taxes on contributions, rebates, refunds, and commissions accrued by the Takaful Operator, and

(ii) the gross amount of any Retakaful contributions (after deduction of any rebates or commissions receivable by the Takaful Operator) ceded by the Takaful Operator in respect of all of the Takaful Funds forming part of its General Takaful Business during that preceding financial year;

(b) 12% of the value of claims reserves and contribution reserves, net of Retakaful and amounts reserved to maximum; and

(c) the Capital Floor applicable to that Takaful Operator.

(2) For the purposes of rule 1.2(1)(a) any funds received by a Takaful Operator in return for the assumption of Takaful obligations under a novation, portfolio transfer or other scheme or arrangement must be included in the gross contributions computation at a value:

(a) determined on a basis acceptable to the AFSA; and

(b) supported by an actuarial opinion acceptable to the AFSA.

(3) Retakaful or Reinsurance ceded by a Takaful Operator to an Associated Party shall not be taken into account for the purposes of the MCR calculation unless

(a) the Associated Party is an AIFC-Incorporated Takaful Operator and meets the solvency requirements in these Rules, or

(b) the AFSA, in any particular case, consents in writing to that Retakaful or reinsurance being taken into account.

1.3. The MCR for Family Takaful Business

(1) The MCR of a an AIFC-Incorporated Takaful Operator carrying on Family Takaful Business is an amount not less than the higher of -

(a) 2.5% of that Takaful Operator’s total reserves including the reserves of all of its Family Takaful Funds, net of Retakaful; and

(b) the Capital Floor applicable to that Takaful Operator.

(2) Where a Takaful Operator has entered into Takaful Contracts falling within Family Takaful Category 3 Linked Family Takaful business, the value of the total reserves in rule 1.3(1)(a) should be reduced by the value of the linked liabilities.

(3) Retakaful / reinsurance ceded by a Takaful Operator to an Associated Party shall not be taken into account for the purposes of the MCR calculation unless -

(a) the Associated Party is an AIFC-Incorporated Takaful Operator and meets the solvency requirements in these Rules, or

(b) the AFSA, in any particular case, consents in writing to that Retakaful / reinsurance being taken into account.