7.1. Application

(1) Paragraphs 7.2 to 7.4 apply to General Takaful Business.

(2) The calculation of Premium Risk Component of the Takaful risk requirement is applicable only to every Takaful Funds and it does not apply to the Takaful Operator’s own balance sheet.

7.2. Premium Risk Component

(1) The Premium Risk Component for each of the Takaful Funds, is calculated as the sum of the amounts obtained by multiplying the Takaful Fund’s net contribution liability that falls within each Category of General Takaful Business by the percentage applicable to that liability under table C. Table C Percentage factor— Premium Risk Component

(2) In this rule, net contribution liability means contribution liability less any expected retakaful and non-retakaful recoveries in respect of that contribution liability as at the Solvency Reference Date

_

7.3 AIFC-Incorporated Takaful Operator may apply for different percentages

(1) The AFSA may, on application of an AIFC-Incorporated Takaful Operator conducting General Takaful Business in Category 1, give written consent to the use of percentages other than those in table C if the AFSA is satisfied that:

• (a) adequate mortality and morbidity information exists in respect of that business; and
• (b) the information provides a reasonable basis for reliance on actuarial principles.

(2) The percentages that may be used must be those stated in the notice but may not be lower than:

• (a) 12% in the case of direct Takaful and proportional Retakaful; and
• (b) 16% in the case of non-proportional Retakaful

7.4. Certain contracts not included

(1) If an AIFC-Incorporated Takaful Operator underwrites Takaful Contracts in General Takaful Categories 1 and 2 that are Family Takaful Contracts, the AIFC-Incorporated Takaful Operator need not calculate a Premium Risk component in respect of those contracts.

(2) For Takaful Contracts in General Takaful Categories 1 and 2 that are Family Takaful contracts, the AIFC-Incorporated Takaful Operator must calculate a Family Takaful Risk Component.