• Chapter One — General Provisions

    • Article 1

      Insurance companies and organisations which are subject to the provisions of this law shall be defined as the following:

      1. Bahrain Insurance & Reinsurance companies carrying on business in Bahrain.
      2. The Vehicle Insurance Fund incorporated as per Legislative Decree No. 11 of 1982.
      3. Branches of foreign insurance companies existing in Bahrain but having their registered principal offices outside Bahrain.
      4. Any other insurance organisations existing in Bahrain whether taking the form of insurance groups, co-operative or mutual societies or such other organisation.
      5. Exempt joint stock insurance companies and exempt joint stock reinsurance companies. However, the Minister for Commerce and Agriculture may by an order resolve to exempt such companies from certain provisions of this Law.
      6. Representative offices of foreign insurance companies and organisations the principal offices of which are abroad and are specifically dealt with in Article 3 (3) of this law.

    • Article 2

      The Ministry of Commerce and Agriculture shall be vested with the authority to maintain supervision and control over the insurance companies and organisations referred to in the preceding Article and engaged in the insurance business in pursuance of the provisions of this Law.

    • Article 3

      With effect from the date of enforcing this Law, insurance operations provided for in Article 4 of this law may not be carried on except by firms having the form of a Bahraini joint stock company.

      The provisions of this Article shall not be applicable to companies and organisations engaged in insurance activities and existing in Bahrain on the effective date of this Law.

      However, the Minister for Commerce and Agriculture may by a resolution authorise foreign insurance companies and organisations to open representative offices in Bahrain subject to the terms and conditions set forth in the said resolution.

    • Article 4

      For the purpose of enforcing the provisions of this Law, insurance operations shall be divided into the following classes:

      1. Life insurance.
      2. Savings and fund accumulation insurance.
      3. Fire insurance and the customary types of insurance normally attached thereto.
      4. Insurance against the hazards of land, river, sea and air transport including insurance covers for ship hulls, aircraft, their engines and supplies.
      5. Insurance against accidents and liabilities including insurance against damages arising from all accidents including motor accidents, industrial accidents, personal accidents, accidents arising from breach of trust and all damages arising from civil liability.
      6. Motor insurance.
      7. Reinsurance operations.
      8. Other insurances.

    • Article 5

      There shall be maintained at the Ministry of Commerce and Agriculture a Register of Insurance Companies and Organisations in which shall be recorded the particulars defined in an order to be issued by the Minister for Commerce and Agriculture.

      The insurance companies and organisations which are subject to the provisions of this Law shall give notice to the Ministry of Commerce and Agriculture of every change of alteration occurring to the said particulars. Such alterations and particulars shall not come into effect except after the approval thereof by the Ministry.

      In addition, insurance companies and organisations which are subject to the provisions of this Law shall prepare insurance documents in the Arabic language which may be accompanied by a translation into another language, unless the two parties agree to the contrary.

    • Article 6

      No direct insurance transactions shall be entered into except with the companies and organisations subject to the provisions of this Law.

      However, the Minister for Commerce and Agriculture may subject to the rules laid down by an order to be issued by him and by a special permission in each individual case authorise that such insurance transaction be effected with other than these companies and organisations.

    • Article 7

      No insurance company or organisation operating in Bahrain shall carry on business in any of the insurance branches set forth in Article 4 save after obtaining a licence for this purpose from the Minister for Commerce and Agriculture.

      Subject to the provisions contained in this Law, the Minister for Commerce and Agriculture may by an order to be issued in this respect lay down general rules comprising the conditions for engaging in the business of any branch of insurance or issue a licence in every individual case.

      Nevertheless, existing insurance companies and organisations in Bahrain on the effective date of this Law shall continue to carry on their business for a maximum period of two years commencing from the effective date thereof. During this period, they shall modify their business affairs in compliance with the provisions of this Law and shall file an application for a licence with the Minister for Commerce and Agriculture, otherwise they shall be deemed to have been wound upon accordance with the Law or their licence for the branch of insurance rejected by the Minister shall be revoked.

    • Article 8

      Any insurance company or organisation for which the Minister for Commerce and Agriculture has refused to grant a licence for engaging in any branch of the insurance branches provided for in Article 4 of this Law, may file an appeal with the Minister against such refusal within a time limit of 60 days from the date of notifying it of such refusal by a registered letter. Further, an insurance company may in the event of dismissing its appeal expressly or implicitly by not replying thereto within sixty days from the date of filing it refer the matter to the High Civil Court seeking the revocation of the refusal decision within a period of sixty days commencing from the date of receiving an express notification to this effect or from the date of expiry of the sixty days without receiving a reply to the appeal.

      An application for revocation shall be filed with the court by the usual methods set forth in the Civil and Commercial Procedures Act.

      In case of filing an appeal and bringing legal action before the Court, the insurance company or organisation concerned shall, in case it exists in Bahrain on the effective date of this Law, continue to carry on business pending the final resolution of the appeal or legal action.

    • Article 9

      Transfer of policies issued by insurance companies and organisations together with the obligations arising therefrom shall take place with the consent of the Minister for Commerce and Agriculture, provided that in the case of long-term business particularly life insurance business they shall be accompanied by a detailed report prepared by an independent actuary.

      In such case, the funds corresponding to the concerned companies obligations shall be transferred to the company to which the policies have been transferred without prejudice to the provisions relating to ownership and assignment of properties.

    • Article 10

      Insurance companies and organisations subject to the provisions of this Law shall supply the concerned authority at the Ministry of Commerce and Agriculture with statistical information and financial and annual reports or any studies which such authority deems necessary to be conducted, and the Ministry may publish such information.

      The Ministry of Commerce and Agriculture shall prepare an annual report about the activities of insurance companies and organisation.