Page 206 - Full Book_24.4.2021

NOTES TO THE
FINANCIAL STATEMENTS

for the financial year ended 31 december 2020 (continUed)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.16 Family Takaful Fund (continued)
Investment-linked business
investments of the investment-linked business are stated at closing market prices. any increase or decrease in value of
these investments is taken into the investment-linked business revenue accounts.
inteGrated annUal rePort 2020 actuarial reserves comprise the Prospective actuarial valuation, cash flow Projection valuation and Unearned contribution
Actuarial reserves

valuation as explained below:
(i)
prospective Actuarial Valuation

for credit-related products, the liabilities of family takaful fund shall be valued based on the sum of present value
of future benefits and any expected future expenses payable from the takaful funds, less the present value of
future gross tabarru’ arising from the certificate, discounted at the appropriate risk discount rate as defined in the
valuation guidelines.
200 for a credit-related takaful certificate whose sustainability of tabarru’ deductions is dependent on the performance
of Participants investment fund (“Pif”), the calculation is subject to adjusting the future gross tabarru’ cash flow
such that it is limited to the period where the Pif can sustain the tabarru’ and assuming that the takaful coverage
is in force for the full duration of the takaful contract.
bimb holdinGS berhad 199701008362 (423858-X) (iii) for products with Pif other than credit-related products, the liabilities shall be valued by projecting future cash
Cash Flow projection Valuation
(ii)
flows to ensure that all future obligations can be met without recourse to additional finance or capital support at
any future time during the duration of the certificate. the cash flow projection shall use a basis that is consistent
with the requirements of the valuation guidelines.
Unearned Contribution Valuation

yearly renewable products or extensions shall be valued according to the following:

for a certificate covering death or survival, the liabilities shall be valued on an unexpired risk basis using a
(a)
prospective estimate of expected future payments arising from future events covered as at the valuation
date. these future payments shall include allowance for direct claims related expenses, direct investment-
related expenses, cost of retakaful and expected future contribution refunds expected during the unexpired
period.
(b) for a certificate covering contingencies other than death or survival the net liability is the maximum of
unexpired risk reserve or unearned contribution reserve.