BackText onlyPrint

You need the Flash plugin.

Download Macromedia Flash Player



Location: Central Bank of Bahrain Volume 3—Insurance > Part A > Business Standards > CA Capital Adequacy > CA-8 Takaful and Retakaful > CA-8.2 Basis of Operating a Takaful Business > Managing Operating Costs > CA-8.2.6
  • Managing Operating Costs

    • CA-8.2.5

      The Takaful operator must establish effective policies and procedures to manage the costs of the Takaful operations. In addition, the board of directors must ensure that effective controls are in place in order that the actual management and distributions expenses are in line with the Wakala fee and do not affect the viability of the Takaful operator.

      Amended: April 2014
      Amended: October 2008
      Amended: January 2007

    • CA-8.2.6

      Only direct expenses related to claims or investments can be paid out of participants' fund(s). The direct expenses related to claims and investments, charged to the participants' fund(s) must be approved by the Shari'a Supervisory Board and must be limited to the amount of expenses incurred.

      Amended: April 2014
      Amended: October 2008
      Amended: January 2007

    • CA-8.2.7

      The Shari'a Supervisory Board (SSB) is not expected to approve each and every claims related and/or investment related expenses. However, the policy established dealing with the direct expenses related to claims and investments, charged to the participants' fund(s), should be approved by the SSB.

      Amended: April 2014
      Amended: October 2008
      Amended: January 2007

    • CA-8.2.8

      Paragraphs CA-8.2.5 to CA-8.2.7 are transitional provisions to enable existing Takaful firmsG to discharge their obligations under pre-existing contracts according to the basis of operating the Takaful funds at the time participants entered into those contracts. Whilst it would be simpler to require all pre-existing contracts to be maintained in separate Takaful funds to those established for contracts written after these Rules come into effect, the CBB considers this may not be in the best interests of participants. It is for this reason that the transitional rules enable Takaful firmsG to either establish subfunds for pre-existing contracts or offer participants the option of switching their policies to the al Wakala model. Whilst ultimately it would be at the discretion of the Courts to decide, the CBB would generally be prepared to support Court applications as outlined in Paragraph CA-8.2.6 where more than 75% of participants (by number and value) had indicated their preparedness to switch to the al Wakala model.

      Amended: January 2007
      Amended: October 2008

Back to top