| 1. | Affiliate: | An entity that, directly or indirectly, is controlled by, or is under common control with another entity. The term control as used herein shall mean the holding, directly or indirectly, of voting rights in another entity, or of the power to direct or cause the direction of the management of another entity.
|
| 2. | Authorized Manager: | The person appointed by the foreign insurance company to manage its branch in the State.
|
| 3. | Board: | The Company’s board of directors.
|
| 4. | Central Bank: | The Central Bank of the United Arab Emirates.
|
| 5. | Chief Executive Officer: | The most senior executive appointed by the Board, and in the case of foreign branches, this refers the Authorized Manager.
|
| 6. | Central Bank Laws: | Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organization of Financial Institutions and Activities, as amended and Federal Law No. (6) of 2007 Concerning the Organization of Insurance Operations, as amended and its Executive Regulations.
|
| 7. | Company: | The insurance company incorporated in the State, or a foreign branch of an insurance Company, that is licensed to underwrite primary insurance and reinsurance, including Takaful insurance companies.
|
|
| 8. | Conflict of Interest: | A situation of actual or perceived conflict between the duty and private interests of a person, which could improperly influence the performance of his/her duties and responsibilities.
|
| 9. | Confidential Data: | Account or other data relating to a Company customer, who is or can be identified, either from the Confidential Data, or from the Confidential Data in conjunction with other information that is in, or is likely to come into, the possession of a person or organization that is granted access to the Confidential Data.
|
| 10. | Control Function: | Function (whether in the form of a person, unit or department) that has a responsibility in a Company to provide objective assessment, reporting and/or assurance; this includes the risk management, compliance, actuarial, internal audit and where applicable Shari’ah control and Shari’ah audit functions.
|
| 11. | Controlling Shareholder: | A shareholder who has the ability to directly or indirectly influence or control the appointment of the majority of the Board, or the decisions made by the Board or by the general assembly of the Company, through the ownership of a percentage of the shares or stocks or under an agreement or other arrangement providing for such influence.
|
| 12. | Enterprise Risk Management (ERM): | The strategies, policies and processes of identifying, assessing, measuring, monitoring, controlling, reporting and mitigating risks in respect of the Company’s enterprise as a whole.
|
| 13. | Financial Regulations: | Insurance Authority Board of Directors’ Decision No. (25) of 2014 Pertinent to Financial Regulations for Insurance Companies and the Insurance Authority Board of Directors’ Decision No. (26) of 2014 Pertinent to Financial Regulations for Takaful Insurance Companies.
|
| 14. | Group: | A group of entities which includes an entity (the ‘first entity’) and: | | a. | any Parent of the first entity;
| | b. | any Subsidiary of the first entity or of any Parent of the first entity;
| | c. | any Affiliate.
|
|
| 15. | Internal Controls: | A set of processes, polices and activities governing a Company’s organisational and operational structure, including reporting and control functions.
|
| 16. | Insurance Related Professions: | Any person licensed to practice any of the activates of an insurance agent, actuary, insurance broker, surveyor and loss adjuster, insurance consultant or any other insurance-related profession that the Central Bank decides to regulate.
|
| 17. | Model: | A quantitative method, system, or approach that applies statistical, economic, financial, or mathematical theories, techniques, and assumptions to process input data into quantitative estimates.
|
| 18. | Outsourcing: | An arrangement between a Company and a service provider, whether the service provider operates within or outside the UAE, for the latter to perform a process, service or activity which would otherwise be performed by the Company itself.
|
|
| 19. | Own Risk and Solvency Assessment (ORSA): | an internal process undertaken by a Company/ Group to assess the adequacy of its Risk Management and current and prospective solvency positions under normal and severe stress scenarios. It requires a Company to analyze all reasonably foreseeable and relevant material risks. It covers current and future risks and requires Company-specific judgment about risk management and the adequacy of their capital position that could have an impact on it’s ability to meet both its business objectives as well as its policyholder obligations. This encourages management to anticipate potential business challenges, capital needs and to take proactive steps to reduce risks. ORSA is not a one-off exercise; it is a continuously evolving process and must be a component of a Company’s Enterprise Risk Management (ERM) framework. Whilst there is not one specific way of conducting an ORSA, the output is expected to be a set of documents that demonstrate the results of management's proactive approach to its own self-assessment.
|
| 20. | Parent: | An entity (the 'first entity') which:
| | a. | holds a majority of the voting rights in another entity (the 'second entity');
| | b. | is a shareholder of the second entity and has the right to appoint or remove a majority of the Board of directors or managers of the second entity; or
| | c. | is a shareholder of the second entity and controls alone, pursuant to an agreement with other shareholders, a majority of the voting rights in the second entity; or
| | d. | if the second entity is a Subsidiary of another entity which is itself a Subsidiary of the first entity.
|
|
| 21. | Regulations: | Any resolution, regulation, circular, rule, standard or notice issued by the Central Bank.
|
| 22. | Risk Appetite: | The aggregate level and types of risk a Company is willing to assume, within its risk capacity, to achieve its strategic objectives and business plan.
|
| 23. | Risk Culture: | The set of norms, values, attitudes and behaviors of a Company that characterizes the way in which it conducts its activities related to risk awareness, risk taking and risk management and controls.
|
| 24. | Risk Governance System: | As part of the overall approach to Corporate Governance, the framework through which the Board and Senior Management establish and make decisions about the Company’s strategy and risk approach; articulate and monitor adherence to the Risk Appetite and Risks Limits relative to the Company’s strategy; and identify, measure, manage, and control risks.
|
| 25. | Risk Limits: | Quantitative measure based on a Company’s Risk Appetite which gives clear guidance on the level of risk to which the Company is prepared to be exposed and is set and applied in aggregate or individual units such as risk categories or business lines.
|
| 26. | Risk Profile: | Point in time assessment of the Company’s gross and, as appropriate, net risk exposures aggregated within and across each relevant risk category based on forward looking assumptions.
|
| 27. | Risk Management: | The process through which risks are managed allowing all risks of a Company to be identified, assessed, monitored, mitigated (as needed) and reported on a timely and comprehensive basis.
|
| 28. | Senior Management: | The individuals or body responsible for managing the Company on a day-to-day basis in accordance with strategies, policies and procedures set out by the Board, generally including, but not limited to, the Chief Executive Officer, chief financial officer, chief risk officer, and heads of the compliance and internal audit functions.
|
| 29. | Staff: | All the persons working for a Company including the members of Senior Management, except for the members of its Board.
|
| 30. | State: | The United Arab Emirates.
|
| 31. | Stress Testing: | A method of assessment that measures the financial impact of stressing one or more factors which could severely affect the Company.
|
| 32. | Subsidiary: | An entity (the 'first entity') is a subsidiary of another entity (the 'second entity') if the second entity: | | a. | holds a majority of the voting rights in the first entity;
| | b. | is a shareholder of the first entity and has the right to appoint or remove a majority of the Board of directors or managers of the first entity; or
| | c. | is a shareholder of the first entity and controls alone, pursuant to an agreement with other shareholders, a majority of the voting rights in the first entity; or
| | d. | if the first entity is a subsidiary of another entity which is itself a subsidiary of the second entity.
|
|
| 33. | Takaful Insurance: | A collective contractual arrangement aiming at achieving cooperation among a group of participants against certain risks whereby each participant pays certain contribution fees to form an account called the participants' account through which entitled compensations are paid to the member in respect of whom the risk has realized. The Takaful Insurance Company shall manage this account and invest the funds collected therein against certain remuneration.
|