| 1. | Affiliate: | An entity that, directly or indirectly, controls, 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. | Authorised 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 to the Authorised Manager. |
| 6. | Company: | The insurance company incorporated in the State, and the foreign branch of an insurance company, that is licensed to underwrite primary insurance and reinsurance, including Takaful insurance companies. |
| 7. | Compliance with Islamic Shari’ah: | Refers to compliance with Shari’ah in accordance with: | | a. | resolutions, fatwas, regulations, and standards issued by the Higher Shari’ah Authority in relation to the Company’s activities and businesses (“HSA’s Resolutions”), and | | b. | resolutions and fatwas issued by the Internal Shari`ah Supervision Committee (“ISSC”) of the Company, in relation to its activities and businesses (“the Committee’s Resolutions”), provided they do not contradict HSA’s Resolutions. |
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| 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. | Control Functions: | 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. |
| 10. | 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. |
| 11. | Corporate Governance: | A set of relationships between a Company’s Board, Senior Management, customers and other stakeholders; and a structure through which the objectives of the Company are set, and the means of attaining those objectives and monitoring performance are determined. |
| 12. | Duty of Care: | The duty to decide and act on an informed and prudent basis with respect to the Company. Often interpreted as requiring a member of the Board to approach the affairs of the Company and policyholders ahead of his/her own interests. |
| 13. | Duty of Confidentiality: | The duty to observe confidentiality applies to all information of a confidential nature with which a member of the Board is entrusted by the Company or which is brought to his or her attention during or at any time after the carrying out of his/her assignment. |
| 14. | Duty of Loyalty: | The duty to act in the good faith in the interest of the Company. The duty of loyalty should prevent individual members of the Board from acting in their own interest, or the interest of another individual or group, at the expense of the Company and shareholders. |
| 15. | Financial Regulations: | Insurance Authority Board of Directors’ Decision number (25) of 2014 Pertinent to Financial Regulations for Insurance Companies and the Insurance Authority Board of Directors’ Decision number (26) of 2014 Pertinent to Financial Regulations for Takaful Insurance Companies. |
| 16. | Fit and Proper Process: | The evaluation of a Company’s proposed members of the Board, Senior Management and other persons as determined by the Central Bank from time to time, in terms of expertise and integrity. The specific fit and proper criteria are listed in article 5.20.e.1 of the Standards. |
| 17. | Government: | The UAE Federal Government or one of the governments of the member Emirates of the Union. |
| 18. | 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. |
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| 19. | Higher Shari`ah Authority: | The Higher Shari`ah Authority that was established at the Central Bank. |
| 20. | Independent Member of the Board: | A member of the Board who has no relationship with the Company or Group that could lead to benefit which may affect his/her decisions. He/she must not be under any other undue influence, internal or external, ownership or control, which would impede the Independent Member’s exercise of objective judgment. The Independent Member of the Board forfeits his/her independence in the cases specified in Article 5.7 of the Standards. |
| 21. | Material Risk Takers: | Staff whose work is deemed to have a significant impact on the overall risk profile of the Company or the Group. |
| 22. | Regulations: | Any resolution, regulation, circular, rule, standard or notice issued by the Central Bank. |
| 23. | Relatives: | Father, mother, brother, sister, children, spouse, father-in-law, mother-in-law and children of the spouse. |
| 24. | Related Parties: | The Group and its Controlling Shareholders, members of the Board and Senior Management (and their Relatives) and persons with control, joint control or significant influence over the Company (and their Relatives). |
| 25. | Related Party Transactions: | Include on-balance sheet and off-balance sheet credit exposures and claims as well as dealings such as service contracts, asset purchases and sales, construction contracts, lease agreements, derivative transactions, borrowings, and write-offs. The term transaction incorporates not only transactions that are entered into with Related Parties but also situations in which an unrelated party (with whom a Company has an existing exposure) subsequently becomes a Related Party; disclosures must reflect all Related Party events and transactions for the financial period. |
| 26. | 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. |
| 27. | Risk Governance Framework: | 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. |
| 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. | State: | The United Arab Emirates. |
| 30. | 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. |
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| 31. | Staff: | All the persons working for a Company including the members of Senior Management, except for the members of its Board. |
| 32. | Takaful Insurance: | A collective contractual arrangement aiming at achieving cooperation among a group of participants against certain risks whereby each participant pays certain contribution amount 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 compensation. |