Item 1, Base capital, represents the starting-point for the calculation of the Capital Resources of the Insurer to be compared to the minimum Capital Requirement applicable to the Insurer. This item must be completed having regard to the following principles:
(a) Item 1.1, Equity, must be equal to total equity reported at item 39.6 on form 1, less debt-financed equity reported at line 39.7 on form 1;
(b) Item 1.2, Owners’ Equity, must be equal to the amount of Owners’ Equity in a Takaful Insurer that is available for loan to the Insurance Fund. It does not include any amount of loans made from Owners’ Equity to the Insurance Fund and not repaid. This item applies only to Takaful Insurers;
(c) Any amount recorded at item 1.3.1 must not exceed the amount recorded at item 35.1 on form 1;
(d) Any amount recorded at item 1.3.2 must not exceed the amount recorded at item 35.2 on form 1;
(e) Item 1.3.3 may only be used by a Takaful Insurer. This item must equal item 1.2; and
(f) Item 1.3.4 may not exceed the amount of item 39.7 on form 1.