Abu Dhabi National Takaful Co. P.S.C.

Participation Membership Policy

Sharia Introduction

The Participation Membership Agreement (hereinafter referred to as the ” Sharia Introduction) has been concluded by and between:

• Abu Dhabi National Takaful Company PSC. Takaful, P.O. Box 35335, Abu Dhabi, United Arab Emirates (hereinafter referred to as the “Company”) and The Participant / Policy holder.
• (hereinafter referred to as the ” Participant”)
• Whereas the Company practices Takaful Insurance Activities,(according to the rules and principles of Islamic Sharia that are based on mutual cooperation between the Participants / policy holders to cover any damage incurred by one of them, due to the occurrence of dangers, which is covered under the Takaful policy held by him, such compensation shall be in the form of cash contributions paid by the Participants as donations in the Takaful Insurance Account, within the agreed sum insured amount between the participant and the company in the form of Takaful contribution) which is paid as lump sum, or in installments, as well as the investment returns of such contributions.
• Whereas the Participant has agreed to deal with the Company according to this form of Takaful Insurance and participate with the other Participants in the Takaful Insurance Account on cooperation basis by paying his Takaful contribution and its investment return by an amount sufficient to cover the compensations or benefits, paid by the Company from the Takaful Insurance Account on behalf of the Participants to any of them who sustains one of the damages which is or to be contracted on for compensations or benefits.
• Whereas the Participant has agreed to appoint the Company as his agent for a known consideration called (management agency fee) to manage the Takaful Insurance Operations carried by the Company in favor of the Participants as fund owners (Arbab Mal), in consideration of a common share from the investment returns according to Islamic Shari’a rules of absolute (Unrestricted) Mudaraba in which Mudarib is allowed to mix his funds with the Mudaraba capital.
• The company shall, in all its activities and investments, abide by Sharia rules & principles, and the directives of the Sharia Supervisory Committee
• Whereas the Participant has agreed that the amount of management agency fee deducted from the Takaful contribution paid by the Participant and the Company’s common share in the investment returns in its capacity as Mudarib, have been determined in a public announcement available at the company head office and branches (to be approved by Sharia Supervisory Committee, before the beginning of each financial year and applied to all the Takaful polices concluded during such year).
• Whereas the compensations or benefits are paid to the Participant, Or beneficiary identified by the Participant, or to the affected third party, as per the Takaful insurance policy, by the Company from the Takaful Insurance Account, any liability for the Takaful insurance (compensations or benefits) or payment to the Participant provided for in the policy or any previous or subsequent understanding and agreement between the Company and Participant whether by way of evidencing or denial, means the liability of the Takaful Insurance Account itself and payment from such account, even if the matter is attributable to the company in any form or manner.
• Whereas the Participant has agreed to distribute the surplus created on the Takaful Insurance Account – after the deduction of all necessary provisions, expenses, and reserves – among the joint Participants in the Takaful Insurance Account at the end of the financial year, in which such surplus has been created, in accordance with the mechanism approved by the Shari’a Supervisory Committee in the Company – hereby authorized by the Participant in this respect – and ratified by the Company’s Board of Directors. The Participant also agreed to cover the deficit of the Takaful Insurance Account in a certain financial year from the surplus created in any following financial year.
• Whereas the Participant has agreed that the Company shall enter into contract with each one of the Participants by attorney ship of other Participants i.e. the Takaful Insurance Account in connection with the insurance operation. He also agreed that the Company would contract with the Retakaful / Reinsurance under this agency and grant him the right to contract with others for this purpose.
• The Participant also agreed to disburse all of the allocations related to the Takaful Insurance Account, and the accumulated surpluses to the charitable, upon liquidation of the company and after the payment of all rights and obligations on the Takaful Insurance Account.

Now, therefore the Company and the Participant have mutually agreed and consented to consider this Sharia introduction as an integral part of the Takaful insurance policy/ policies that are contracted for (or any previous or subsequent agreement and understanding between them) and complementary threto and to enter this Takaful insurance policy/ policies under the terms and exclusions therein. Furthermore, all the concepts and terms provide for therein shall be construed in accordance with the contents of this Sharia introduction.

General Definitions and Interpretations

The Company: Means the Takaful Insurance company which manages Takaful Insurance operations (Takaful Insurance Account) as an agent for the Participants group against the agreed/determined fees and might invest the Takaful contributions amount (Balance of the Takaful Insurance Account) as Mudarib against the agreed percentage of the return of the investment.

The Participant: Shall mean the person who contributes from the contribution amount in the Takaful Insurance Account after deducting the agency fees and from his share of the investment’s profit, to be quantitatively enough to pay Compensations or benefits in return looses and damages sustained by him or by other Participants who are collectively exposed to the common insured perils, whereas the expression Insured appears or Policy holder in this policy, it shall mean the Participant or the party contracted with the company.

Takaful Contribution: Shall mean the cash amount paid by the Participant to the Takaful insurance Account as a contribution from his part and from his share of the investment’s profit of his contribution in order to reimburse or to pay Compensations or benefits to those who, when the participants or one of them are exposed, to a common perils from the Takaful Insurance Account. Whereas the expression (the premium or Cash Contribution) appears in this policy, it shall mean the Takaful contribution.

Takaful Insurance Account: Shall mean an account that has been established by the company for the purpose of depositing Takaful Contributions, after deduction of the Agency fees, the investment proceeds and associated reserves. It shall have the rule of an independent legal identity and shall not be part of the company’s accounts and company’s liabilities. The purpose of this account will be to indemnify the Participants and Beneficiaries and damaged from third party, as per the terms and conditions of the takaful contract, from which all benefits, compensation, charges and commissions related to the takaful insurance operations will be paid. . The Company shall manage the Takaful Insurance Account on behalf of the Participants as per the agency agreement and represent the insured in all aspects and related matters.

Sum Insured: In property insurance and civil liability (third party), it means the maximum amount of Compensations or benefits, that the Participant is entitled to or paid on his behalf, from the Takaful Insurance Account, for the losses incurred in the event of the risks stipulated under this Takaful policy occurred. In casualty insurance, it means the amount entitled for the Participant from the Takaful Insurance Account in the event of any risks stipulated under this Takaful policy occurred., which is established by virtue of occurrence and subject to the terms and conditions of this Takaful policy.

The Surplus: It is the net of the balance amount of the Takaful Contributions and reserves, investment proceeds after deduction of all expenses and commissions of management of Takaful insurance operations and payable Compensations and benefits, and to be distributed among Participants, in accordance with Sharia standards, the instructions of the supervisory authorities, and the recommendations of the actuary, in the manner approved by the Shariah Supervisory Committee of the company and approved by its Board of Directors.

Perils: Means the incident or event which is a condition for Compensations or benefits entitlement from the Takaful Insurance Account against sustained damage, within the limit of sum of property insurance, or entitlement of insurance sum in the causality insurance.

Mudaraba: It is a contract between two parties whereby one of them puts a certain amount of capital (the owner of capital) and the other (Mudraib) puts experience and work to invest the amount of capital and as such profit will be shared between them according to the agreement. Any loss lies beyond control of the Mudarib (not because of his misconduct, neglecting or exceeding any agreement terms) is exclusively beard by the owner of capital. While Mudarib loses his work and experience only. Accordingly, the relation will be between the Participant and the Company with respect to investing the balance of the Takaful Insurance Account whereby the Participant will be (Owner of the capital) and the Company (Mudarib).

The Agency: It is a contract made between two parties whereby one of them (principal) authorizes the other (agent) in handling certain services in favor of the other, against certain fees or free of charge.

Accordingly, the relation will be between the Participant and the Company with respect to management of Takaful insurance operations whereby the Participant authorizes the Company (agent) against certain fees.

The Law: The laws and regulations in force in the United Arab Emirates shall apply to this contract in a manner that does not conflict with the provisions and principles of Islamic Sharia, as interpreted by the Shariah Supervisory Committee of the company.

N.B. :In the event of any difference in interpretation between English and Arabic in this policy, the Arabic text shall prevail.

Participation Membership Policy (Sharia Introduction)