| 1.1 | Bank: Any juridical person licensed in accordance with the provisions of the Central Bank Law, to primarily carry on the activity of taking deposits, and any other licensed financial activities, as defined in the Central Bank Law.
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| 1.2 | Central Bank: The Central Bank of the United Arab Emirates.
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| 1.3 | Central Bank Law: Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organisation of Financial Institutions and Activities, as amended.
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| 1.4 | Control Function: Function (whether in the form of a person, unit or department) that has a responsibility in a Financial Institution to provide objective assessment, reporting and/or assurance; this includes the risk management, compliance, internal audit and, where applicable, actuarial, Shari’ah control and Shari’ah audit functions.
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| 1.5 | Core Business Lines: Business lines and associated services that represent material sources of revenue, profit or franchise value for a Financial Institution.
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| 1.6 | Critical Functions: Activities, services or operations the discontinuance of which is likely to lead to the disruption of financial stability, or of services that are essential to the economy due to the size, market share, external and internal interconnectedness, complexity, cross-border activities of a Financial Institution, with particular regard to the substitutability of those activities, services, or operations.
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| 1.7 | Enterprise Risk Management (ERM): The strategies, policies and processes of identifying, assessing, measuring, monitoring, controlling, reporting and mitigating risks in respect of an Insurance Company’s enterprise as a whole.
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| 1.8 | Financial Institution: a Bank or Insurance Company, or branch in the UAE of a foreign bank or insurance company, or any other Licensed Financial Institution designated by the Central Bank.
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| 1.9 | Financial Market Infrastructure: multilateral system among participating institutions, including the operator of the system, used for the purposes of clearing, settling, or recording payments, securities, derivatives, or other financial transactions.
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| 1.10 | Idiosyncratic Stress Scenario: a stress scenario that affects only the Financial Institution’s group or part of that group, but not the broader market or sector; as opposed to a System-Wide Stress Scenario.
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| 1.11 | Insurance 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.
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| 1.12 | Insurance Law: The Federal Law No. 6 of 2007 Concerning the Organization of Insurance Operations, as amended.
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| 1.13 | Internal Shari’ah Supervisory Committee: A body appointed by an Islamic Financial Institution (“IFI”) or a Takaful Insurance Company, comprised of scholars specialized in Islamic financial transactions, which independentlysupervises transactions, activities, and products of the IFI or the Takaful Insurance Company to ensure compliance with Islamic Shari’ah in all its objectives, activities, operations, and code of conduct.
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| 1.14 | Islamic Financial Institutions: The Central Bank licensed Financial Institutions that conduct all or part of their activities and businesses in accordance with Islamic Shari’ah Provisions.
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| 1.15 | Islamic Shari’ah Provisions:
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| | a. | The resolutions, Fatwas, regulations and standards issued by the Higher Shari’ah Authority in relation to activities and businesses of the IFIs and the Takaful Insurance Companies ("HSA’s Resolutions"),
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| | b. | The resolutions and Fatwas issued by the Internal Shari’ah Supervision Committee of the respective IFIs and the Takaful Insurance Companies, in relation to their activities and businesses ("ISSC’s Resolutions"), provided that they do not contradict the HSA’s Resolutions.
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| 1.16 | Own Risk and Solvency Assessment (ORSA): an internal process undertaken by an Insurance Company/ Group to assess the adequacy of its Risk Management and current and prospective solvency positions under normal and severe stress scenarios. It requires an Insurance 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 its 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. The ORSA is not a one-off exercise; it is a continuously evolving process and must be a component of an Insurance 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.
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| 1.17 | Senior Management: The individuals or body responsible for managing the Financial Institution 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.
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| 1.18 | Staff: All the persons working for a Financial Institution including the members of Senior Management, except for the members of its Board.
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| 1.19 | Standing Facilities: Monetary Policy tools made available to Licensed Financial Institutions, to enable management of their liquidity in accordance with the controls and instructions issued by the Central Bank, in accordance with the provisions of the Central Bank Law.
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| 1.20 | System-Wide Stress Scenario: a stress scenario that affects not only the Financial Institution’s group or part of that group, but also the broader market or sector in which it operates; as opposed to an Idiosyncratic Stress Scenario.
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| 1.21 | Takaful Insurance: A collective contractual arrangement aiming at achieving mutuality and cooperation among a group of participants against certain risks, whereby each participant pays certain contribution to form an account called the participants’ account. This account is used for paying the entitled compensations and/or benefits when risk is realized, in accordance with the terms and conditions. The Takaful Insurance Company manages this account and invests its funds.
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| | All transactions of the Takaful Insurance Company should be in accordance with the Islamic Shari’ah Provisions. |
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