9.1. Application

(1) Paragraphs 9.2 and 9.3 apply to Family Takaful Business.

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

9.2. Family Takaful Risk Component

The Family Takaful Risk Component is calculated as the sum of the following amounts, so far as they relate to the Family Takaful business of the AIFC-Incorporated Takaful Operator:

(a) 1.25% of the amount of provisions in respect of Family Takaful Business that is [investmentlinked Takaful, where the contracts are subject to a capital guarantee;]

(b) 0.5% of the amount of provisions in respect of Family Takaful Business that is investmentlinked Takaful, where the contracts are not subject to a capital guarantee;

(c) 3% of the amount of provisions in respect of Family Takaful Business other than business described in paragraphs (a) and (b); (d) the amount obtained by multiplying the amount of capital at risk under paragraph 9.3 by 0.1%;

(e) if the relevant Takaful Fund includes policies that are contingent on mortality—the amount of anticipated claims cost arising from a 0.5 per thousand increase in the rate of lives insured dying over the following year.

9.3. Capital at risk

(1) Capital at risk of a Family Takaful Fund means the total amount of sums assured on Family Takaful Contracts issued by that Family Takaful Fund, less:

• (a) the total amount of mathematical reserves for those contracts; and
• (b) any expected Retakaful and non-Retakaful recoveries as at the Solvency Reference Date.

(2) For an annuity, the sum assured must be taken to be the present value of the annuity payments.

(3) The contribution of each contract to capital at risk must be determined separately. If the capital at risk calculated for a contract is less than zero, the capital at risk for that contract is taken to be zero