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  • AU-1 AU-1 Authorisation Requirements

    • AU-1.1 AU-1.1 Insurance Licensees

      • General Prohibition

        • AU-1.1.1

          No person may:

          (a) Undertake (or hold themselves out to undertake) regulated insurance services, by way of business, within or from the Kingdom of Bahrain unless duly licensed by the CBB;
          (b) Hold themselves out to be licensed by the CBB unless they have as a matter of fact been so licensed; or
          (c) Market any financial services in the Kingdom of Bahrain unless:
          (i) Allowed to do by the terms of a license issued by the CBB;
          (ii) The activities come within the terms of an exemption granted by the CBB by way of a Directive; or
          (iii) Has obtained the express written permission of the CBB to offer financial services.
          Amended: January 2013
          Amended: July 2007

        • AU-1.1.1A

          For the purposes of Rule AU-1.1.1(a), please refer to Section AU-1.4 for the definition of ‘regulated insurance services’ and ‘by way of business’. Such activities will be deemed to be undertaken within or from the Kingdom of Bahrain if, for example, the person concerned:

          (a) Is incorporated in the Kingdom of Bahrain;
          (b) Uses an address situated in the Kingdom of Bahrain for its correspondence; or
          (c) Directly solicits clients, who are resident within the Kingdom of Bahrain.
          Added: July 2007

        • AU-1.1.2

          For the purposes of AU-1.1.1(b), and in accordance with Article 41(b) of the CBB Law persons would be considered in breach of this requirement if they were to trade as, or incorporate a company in Bahrain with a name containing the words '(re)insurance', '(re)assurance' or '(re)takaful', or the words 'broker', 'consultant', or 'manager' in combination with '(re)insurance', '(re)assurance' or '(re)takaful' (or the equivalents in any language), without holding the appropriate CBB license or the prior approval of the CBB.

          Amended: July 2007

        • AU-1.1.2A

          In accordance with Resolution No.(16) for the year 2012 and for the purpose of Subparagraph AU-1.1.1(c), the word 'market' refers to any promotion, offering, announcement, advertising, broadcast or any other means of communication made for the purpose of inducing recipients to purchase or otherwise acquire financial services in return for monetary payment or some other form of valuable consideration.

          Added: January 2013

        • AU-1.1.2B

          Persons in breach of Subparagraph AU-1.1.1(c) are considered in breach of Resolution No.(16) for the year 2012 and are subject to penalties under Articles 129 and 161 of the CBB Law (see also Section EN-10.3A).

          Added: January 2013

      • Authorisation

        • AU-1.1.3

          Depending on the type of regulated insurance service that a person wishes to undertake, applicants must seek to be licensed either as an insurance firm, an insurance broker, an insurance consultant, an insurance manager or an insurance exchange operator. These license categories cannot be combined.

          Amended: July 2007

        • AU-1.1.4

          Within the Kingdom of Bahrain and in respect of Bahrain residents, licensed insurance firms and insurance brokers may only effect contracts of insurance through intermediaries when these intermediaries are:

          (a) Licensed by the CBB (e.g., as an insurance broker);
          (b) Exempt introducers (as defined in Paragraph AU-1.4.13); or
          (c) Appointed representatives.
          Amended: July 2007

        • AU-1.1.5

          Persons wishing to be licensed to undertake regulated insurance services within or from the Kingdom of Bahrain must apply in writing to the CBB.

          Amended: July 2007

        • AU-1.1.6

          An application for a license must be in the form prescribed by the CBB and must contain, inter alia:

          (a) A business plan specifying the type of business to be conducted;
          (b) Application forms for all controllers;
          (c) Application forms for all controlled functions; and
          (d) For insurance brokers and insurance consultants, details of proposed professional indemnity coverage.
          Amended: July 2007

        • AU-1.1.7

          The CBB will review the application and duly advise the applicant in writing when it has:

          (a) Granted the application without conditions;
          (b) Granted the application subject to conditions specified by the CBB; or
          (c) Refused the application, stating the grounds on which the application has been refused and the process for appealing against that decision.
          Amended: July 2007

        • AU-1.1.8

          Detailed Rules and Guidance regarding information requirements and processes for licenses can be found in Section AU-5.1. As specified in Paragraph AU-5.1.12 and in accordance with Article 44(e) of the CBB Law, the CBB will provide a formal decision on a license application within 60 calendar days of all required documentation having been submitted in a form acceptable to the CBB.

          Amended: July 2007

        • AU-1.1.8A

          In granting new licenses, the CBB will specify the type of regulated insurance services for which a license has been granted, and include further conditions in relation to the license such as the class of business authorised, whether the insurance firm is operating on a conventional or takaful basis, limited to reinsurance or licensed as a captive insurer.

          Added: July 2007

        • AU-1.1.9

          All applicants seeking an insurance license must satisfy the CBB that they meet, by the date of authorisation, the minimum criteria for licensing, as contained in Chapter AU-2. Once licensed, insurance licensees must maintain these criteria on an ongoing basis.

          Amended: July 2007

        • AU-1.1.10

          An insurance licensee must not carry on any commercial business in the Kingdom of Bahrain or elsewhere other than insurance business and activities directly arising from or incidental to that business.

        • AU-1.1.11

          In instances where an insurance licensee carries on a commercial business, at the time where the Insurance Rulebook becomes effective, the insurance licensee must notify the CBB to establish the transitional rules in relation to this prohibited activity (refer to Paragraph ES-2.2.1).

          Amended: July 2007

        • AU-1.1.12

          Activities 'directly arising from or incidental' to an insurance firm's business, for instance, will depend on the type of insurance provided by an insurer. By way of example, an insurance firm providing health insurance may show a connection with owning and managing hospitals, an insurer providing insurance that covers damage to motor vehicles may reasonably be able to own accident repairers or garages. Insurers should consult the CBB in relation to their own circumstances in determining if an activity directly arises from or is incidental to their insurance business.

          Amended: July 2007

      • Insurance Firms

        • AU-1.1.13

          For the purposes of Volume 3 (Insurance), insurance firms are defined as insurance licensees who undertake the regulated insurance service of carrying on insurance business, as defined in Paragraphs AU-1.4.7 to AU-1.4.9.

          Amended: July 2007

           

           

        • AU-1.1.14

          An insurance firm must satisfy the CBB as to its suitability for each type and class of insurance business for which it is seeking authorisation. With the exception of captive insurers and pure reinsurers, an insurance firm cannot undertake both general and long-term insurance business. Insurance firms (including captive insurers), must operate on either conventional insurance principles or on takaful principles: they cannot combine the two.

          Amended: July 2007
          Amended: October 2007

        • AU-1.1.15

          In granting new licenses, the CBB will specify the classes of insurance for which authorisation has been granted, and on what basis (i.e. conventional insurance principles or takaful principles). For reinsurance companies, the license will restrict the insurance firm to undertaking reinsurance business only. For captive insurers, the license will also restrict the insurance firm to effecting insurance contracts with its own group members only. Grandfathering provisions apply for those insurance firms whose past license granted them the right to undertake both general and long-term insurance business (composite companies). In addition, composite companies are subject to the requirements of Paragraph GR-1.1.3 with respect to separate books and records for each kind of business. The grandfathering exemption will only apply to the licensee's classes of insurance business as at 1st April 2005, i.e. when Volume 3 (Insurance) was first issued. Should the insurance licensee wish to add additional classes of business, it will be required to separate its general and long-term business into separate licenses.

          Amended: July 2007

      • Insurance Brokers

        • AU-1.1.16

          For the purposes of Volume 3 (Insurance), insurance brokers are defined as insurance licensees who undertake the regulated insurance service of broking of insurance contracts, as defined in Paragraphs AU-1.4.10 to AU-1.4.15.

          Amended: July 2007

        • AU-1.1.17

          [This Paragraph was merged with Paragraph AU-1.1.24 in January 2007.]

          Amended: July 2007

        • AU-1.1.18

          An insurance broker may be licensed for one or more of the following types of business:

          (a) General insurance (as defined in Paragraph AU-1.4.9);
          (b) Unit-linked long-term insurance;
          (c) Long-term insurance (as defined in Paragraph AU-1.4.8) other than unit-linked business;
          (d) Reinsurance; and
          (e) Takaful products.
          Amended: July 2007
          Amended: October 2007

      • Insurance Consultants

        • AU-1.1.19

          For the purposes of Volume 3 (Insurance), insurance consultants are defined as insurance licensees who undertake the regulated insurance service of offering insurance advice, as defined in Paragraphs AU-1.4.16 to AU-1.4.18.

          Amended: July 2007

        • AU-1.1.20

          [This Paragraph was merged with Paragraph AU-1.1.24 in January 2007.]

          Amended: July 2007

        • AU-1.1.21

          An insurance consultant may be licensed for one or more of the following types of business:

          (a) General insurance (as defined in Paragraph AU-1.4.9);
          (b) Unit-linked long-term insurance;
          (c) Long-term insurance (as defined in Paragraph AU-1.4.8) other than unit-linked business;
          (d) Reinsurance; and
          (e) Takaful products.
          Amended: July 2007

      • Insurance Aggregator

        • AU-1.1.18A

          For the purposes of Volume 3 (Insurance), insurance aggregators are defined as insurance intermediaries with an insurance broker's license who operate an online platform, whether hosted on an Internet website or available as a smart device application which provides price comparisons and facilitates the purchase of insurance on behalf of insurance companies.

          Added: October 2019

        • AU-1.1.18B

          If any insurance aggregator wishes to provide additional regulated insurance broker services, such as handling of claims for its clients, it must seek the approval of the CBB.

          Added: October 2019

        • AU-1.1.18C

          An insurance aggregator license is allowed to provide insurance aggregation and other brokerage services with the CBB's approval only through the online platform. The aggregator may not undertake the activities of a traditional broker.

          Added: October 2019

      • Insurance Managers

        • AU-1.1.22

          For the purpose of Volume 3 (Insurance), insurance managers are defined as insurance licensees who undertake the regulated insurance service of providing insurance management services, as defined in Paragraphs AU-1.4.20 to AU-1.4.23.

          Amended: July 2007

      • Insurance Exchange Operators

        • AU-1.1.23

          For the purpose of Volume 3 (Insurance), insurance exchange operators are defined as insurance licensees who undertake the regulated insurance service of operating an insurance exchange, as defined in Paragraphs AU-1.4.24 and AU-1.4.25.

          Amended: July 2007

      • Suitability

        • AU-1.1.24

          Those seeking authorisation must satisfy the CBB as to their suitability to carry out the regulated investment services for which they are seeking authorisation.

          Added: July 2007

        • AU-1.1.25

          In assessing applications for a license, the CBB will assess whether an applicant satisfies the licensing conditions (as specified in Chapter AU-2) with respect to all the regulated investment services that the applicant proposes undertaking.

          Added: July 2007

    • AU-1.2 AU-1.2 Approved Persons

      • General Requirement

        • AU-1.2.1

          Insurance licensees must obtain the CBB's prior written approval for any person wishing to undertake a controlled function in an insurance licensee. The approval from the CBB must be obtained prior to their appointment, subject to the variations contained in Paragraph AU-1.2.3.

          Amended: January 2016
          Amended: July 2007

        • AU-1.2.2

          Controlled functions are those functions occupied by board members and persons in executive positions and include:

          (a) Board Member/ Director (for Bahraini insurance licensee only);
          (b) Chief Executive or General Manager and their Deputies;
          (c) Heads of other functions including (IT and HR functions);
          (d) Head of risk management;
          (e) Compliance officer;
          (f) Money Laundering Reporting Officer;
          (g) [This sub-Paragraph was deleted in October 2020];
          (h) Internal Shari'a reviewer (where applicable);
          (i) Unit-linked investment adviser (where applicable);
          (j) Signing Actuary (where the function is undertaken by a Director or an employee of the insurance firm);
          (k) Chief Financial Officer and/ or Head of Finance;
          (l) Head of Internal Audit;
          (m) Head of Underwriting;
          (n) Head of Claims; and
          (o) Head of Sales and Marketing/ Head of Business Development.
          Amended: October 2020
          Amended: January 2016
          Amended: April 2014
          Amended: October 2007
          Amended: July 2007

        • AU-1.2.3

          Controlled functions may be combined with any other functions, subject to the CBB's prior written approval and such combination must not result in any possible conflict of interest.

          Amended: April 2014
          Amended: October 2007
          Amended: July 2007

        • AU-1.2.4

          [This Paragraph was deleted in April 2014.]

          Deleted: April 2014
          Amended: October 2007
          Amended: July 2007

        • AU-1.2.5

          [This Paragraph was deleted in April 2014.]

          Deleted: April 2014

      • Basis for Approval

        • AU-1.2.6

          Approval under Paragraph AU-1.2.1 is only granted by the CBB, if it is satisfied that the person is fit and proper to hold the particular position in the licensee concerned. 'Fit and proper' is determined by the CBB on a case-by-case basis. The definition of 'fit and proper' and associated guidance is provided in Sections AU-3.1 and AU-3.2 respectively.

          Amended: July 2007

      • Definitions

        • Board Member/ Director

          • AU-1.2.7

            Director is any person who occupies the position of a Director, as defined in Article 173 of the Commercial Companies Law (Legislative Decree No. 21 of 2001).

            Amended: July 2007

          • AU-1.2.8

            The fact that a person may have 'Director' in their job title does not of itself make them a Director within the meaning of the definition noted in Paragraph AU-1.2.7. For example, a 'Director of Marketing', is not necessarily a member of the Board of Directors and therefore may not fall under the definition of Paragraph AU-1.2.7.

            Amended: July 2007

        • Chief Executive Officer or General Manager and their Deputies

          • AU-1.2.9

            The Chief Executive or General Manager means a person who is responsible for the conduct of the licensee (regardless of actual title). The Chief Executive or General Manager must be resident in Bahrain. This person is responsible, alone or jointly, for the conduct of the whole of the firm, or, in the case of an overseas insurance licensee, for all of the activities of the branch.

          • AU-1.2.9A

            The Chairman of the Board may not act as the Chief Executive or General Manager. However, in the case of appointing a Director on the Board as the Managing Director of the insurance licensee, such person:

            (a) Should be fully responsible for the executive management and performance of the insurance licensee, within the framework of delegated authorities set by the Board;
            (b) Must devote full-time working hours to the insurance licensee; and
            (c) Must not be employed at any other firm.
            Added: April 2011

        • Heads of other functions

          • AU-1.2.10

            Head of function means a person who exercises major managerial responsibilities, is responsible for a significant business or operating unit, or has senior managerial responsibility for maintaining accounts or other records of the licensee.

        • Chief Risk Officer/ Head of Risk Management

          • AU-1.2.10A

            Chief risk officer/ Head of risk management is responsible for the management of all risk exposures arising from the activities of the insurance firm.

            Amended: October 2020
            Added: April 2014

          • AU-1.2.11

            Whether a person is a head of function will depend on the facts in each case and is not determined by the presence or absence of the word in their job title. Examples of head of function might include, depending on the scale, nature and complexity of the business, a deputy Chief Executive; heads of departments such as Underwriting, Claims, Risk Management, Compliance or Internal Audit; the Chief Financial Officer; or a Signing Actuary (where that person is a Director or employee of the insurance firm concerned).

            Amended: July 2007

        • Compliance Officer

          • AU-1.2.11A

            All insurance licensees must designate an employee, of appropriate standing and resident in Bahrain, as Compliance Officer. The duties of the Compliance Officer include:

            (a) Having responsibility for oversight of the licensee's compliance with the requirements of the CBB; and
            (b) Reporting to the licensee's Board in respect of that responsibility.
            Added: April 2011

        • Money Laundering Reporting Officer (MLRO)

          • AU-1.2.11BB

            The attributes and responsibilities of the MLRO are described more fully in Paragraphs FC-3.1.9 and FC-3.2.1.

            Added: October 2020

        • Internal Shari’a Reviewer

          • AU-1.2.11B

            The internal Shari'a reviewer in a Takaful firm is responsible for the examination and evaluation of the adequacy and effectiveness of the Takaful firm's system of internal Shari'a control. The internal Shari'a review function must comply with AAOIFI Governance standard for Islamic Financial Institutions No. 3. (See also Module TC Paragraph TC-1.1.10).

            Amended: October 2020
            Added: April 2014

        • Unit-Linked Investment Adviser

          • AU-1.2.11C

            A Unit-Linked Investment Adviser refers to the function of advising clients on contracts that are, by their nature, investment products, including, but not limited to pension and retirement products.

            Added: October 2020

        • Signing Actuary

          • AU-1.2.11D

            A Signing Actuary is appointed to provide professional opinion and report on an insurance firm's actuarial evaluation; level of reserves that should be held in order to meet potential insurance liabilities. The signing actuary may be a Director or employee of the licensee and are accredited by an internationally recognised organisation.

            Added: October 2020

        • Chief Financial Officer/ Head of Finance

          • AU-1.2.11E

            The Chief Financial Officer/Head of Finance is responsible for directing the insurance licensee’s financial function, including ensuring that the relevant accounting treatment is applied to all of the activities of the insurance licensee in a timely manner. The scope of authority of the CFO/ Head of Finance is outlined in more detail in Subparagraph HC-6.3.2 (b).

            Added: October 2020

        • Head of Internal Audit

          • AU-1.2.11F

            The Head of Internal Audit is responsible for providing independent and objective review on the adequacy and effectiveness of the holistic internal control environment within the insurance licensee. The duties of the head of internal audit are outlined in more detail in Subparagraph HC-6.3.2 (d).

            Added: October 2020

        • Head of Underwriting

          • AU-1.2.11G

            The Head of Underwriting function is involved in portfolio analysis and to manage the underwriting process such as risk assessment, pricing and negotiation with the broker or clients. The Head of Underwriting should ensure effective oversight and guidance of underwriting risk in line with the insurance licensee’s risk appetite and policies and procedures.

            Added: October 2020

        • Head of Claims

          • AU-1.2.11H

            The Head of Claims function is responsible for directing and overseeing the operations of an insurance claims function to meet operational, financial and service requirements. The Head of Claims should ensure effective oversight and control of settlements in line with the insurance licensee’s risk appetite and policies and procedures. Moreover, the Head of Claims are involved in strategic processing and payment of claims and are often involved in sets policies on insurance claims.

            Added: October 2020

        • Head of Sales and Marketing/Head of Business Development

          • AU-1.2.11I

            The Head of Sales and Marketing/Head of Business Development is responsible for implementing the corporate strategy; marketing, sales and public relations. He/ she is responsible for developing and overseeing the marketing campaigns, social media accounts, digital marketing channels and other marketing plans. He/ she ensures innovation in product design and developments and conduct behavioural and trend analysis. He/ she engages directly with customers and ensures services provided to customers are in line with insurance licensee’s policies and procedures and with industry best practices.

            Added: October 2020

        • AU-1.2.12

          Where a firm is in doubt as to whether a function should be considered a controlled function it must discuss the case with the CBB.

          Amended: July 2007

        • AU-1.2.13

          [This Paragraph was moved to AU-1.2.11C in October 2020].

          Amended: October 2020
          Amended: July 2007

    • AU-1.3 AU-1.3 Registered Actuaries and Loss Adjusters

      • AU-1.3.1

        In accordance with Article 74 of the CBB Law, a person may not carry on the business of an actuary or a loss adjuster, without being registered as such with the CBB.

        Amended: July 2007

      • AU-1.3.2

        For the purposes of Paragraph AU-1.3.1 and in accordance with Article 1 of the CBB Law, actuaries are defined as persons who hold themselves out as able to give a professional opinion on the level of reserves that should be held in order to meet potential insurance liabilities and are accredited by an international recognised organisation.

        Amended: July 2007

      • AU-1.3.3

        For the purposes of Paragraph AU-1.3.1, loss adjusters are defined as persons who hold themselves out as being able to determine the extent of a firm's liability for loss when a claim is submitted. In doing so, loss adjusters may investigate and settle losses for an insurance firm by surveying or assessing the extent of damages being claimed for under an insurance contract, investigate the causes of such damage, and the extent to which those damages are covered by the contract of insurance.

        Amended: July 2007

    • AU-1.3A AU-1.3A Registered Appointed Representatives

      • AU-1.3A.1

        In accordance with Resolution 11 issued under Article 74 of the CBB Law, a person may not be appointed by a licensed principal as an appointed representative, without being registered as such with the CBB.

        Adopted: October 2009

      • AU-1.3A.2

        For the purposes of Paragraph AU-1.3A.1, an appointed representative is defined as an agent, who is not licensed by the CBB as insurance firm, insurance broker or insurance consultant, appointed by an insurance firm (licensed principal) as its representative according to the rules in Chapter GR-9.

        Adopted: October 2009

      • AU-1.3A.3

        For the purposes of Paragraph AU-1.3A.1, an insurance firm must submit a confirmation that the appointed representative meets the criteria for appointment and the licensee will be able to meet the on-going requirements stipulated in Chapter GR-9.

        Added: July 2023

      • AU-1.3A.4

        Insurance firms must notify the CBB when an arrangement with an appointed representative is terminated within 5 working days of such termination.

        Added: July 2023

      • AU-1.3A.5

        Should the appointed representative fail to comply with the requirements outlined in Chapter GR-9 the CBB may cancel the registration status if it deems necessary to do so (see Chapter EN-9).

        Added: July 2023

    • AU-1.4 AU-1.4 Definition of Regulated Insurance Services

      • AU-1.4.1

        For the purposes of Volume 3 (Insurance) and in accordance with Article 39 of the CBB Law, regulated insurance services are any of the activities specified in Section AU-1.4, carried on by way of business. However, upon application, the CBB may exclude one or more specific transactions from the definition of regulated insurance services.

        Amended: July 2007

      • AU-1.4.2

        The CBB will normally only consider granting such an exemption when a Bahrain resident is unable to obtain a specific product in Bahrain and it would be unreasonable to require the overseas provider of that product to be licensed for that particular transaction.

        Amended: July 2007

      • AU-1.4.3

        For the purposes of Volume 3 (Insurance), carrying on a regulated insurance service by way of business means:

        (a) Undertaking one or more of the activities specified in Section AU-1.4 for commercial gain;
        (b) Holding oneself out as willing and able to engage in that activity; or
        (c) Regularly soliciting other persons to engage in transactions constituting that activity.
        Amended: July 2007

      • AU-1.4.3A

        Where licensees are undertaking regulated activities in accordance with Shari'a, all transactions and contracts concluded by Insurance licensees must comply with Sharia standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). The validity of the contract or transaction is not impacted, if at a later date, the relevant AAOIFI Sharia standards are amended.

        Added: October 2020

      • General Exclusions

        • AU-1.4.4

          With the exception of insurance firms licensed to carry on insurance business as a captive insurer, a person does not carry on an activity constituting a regulated insurance service if the person is a body corporate and carries on that activity solely with or for other bodies corporate, and they are all members of the same group.

          Amended: July 2007
          Amended: October 2007

        • AU-1.4.5

          A person does not carry on an activity constituting a regulated insurance service if the activity:

          (a) Is carried on in the course of a business which does not ordinarily constitute of the carrying on of financial services;
          (b) May reasonably be regarded as a necessary part of any other services provided in the course of that business; and
          (c) Is not remunerated separately from the other services.
          Amended: July 2007
          Amended: October 2007

        • AU-1.4.6

          A person does not carry on an activity constituting a regulated insurance service if he carries on an activity with or for another person, and they are both members of the same family.

          Amended: October 2007

      • Carrying on of Insurance Business (Insurance Firms)

        • AU-1.4.7

          The carrying on of insurance business includes the carrying out and effecting of insurance contracts as principal, including with limitation contracts of long-term insurance or contracts of general insurance. Effecting contracts of insurance means assuming (as principal) insurance risk, by entering into a contract of insurance or contract of reinsurance. Carrying out contracts of insurance means performing (as principal) obligations under a contract of insurance or reinsurance.

        • AU-1.4.8

          A contract of long-term insurance includes any insurance contract dealing with life insurance, personal accident with a term over 1 year and savings and fund accumulation insurance.

        • AU-1.4.9

          A contract of general insurance includes any insurance contract dealing within one or more of the following categories:

          (a) Fire and other property damage;
          (b) Marine, aviation and transport;
          (c) Accident and liability insurance;
          (d) Motor insurance; or
          (e) Such other activities as the CBB may specify from time to time.
          Amended: July 2007

      • The Broking of Insurance Contracts (Insurance Brokers/Appointed Representatives)

        • AU-1.4.10

          The broking of insurance contracts means:

          (a) Acting as agent for another person in relation to the buying of insurance for that other person;
          (b) Making arrangements with a view to another person, whether as principal or agent, buying insurance; or
          (c) Advising on insurance.
          Amended: July 2007
          Amended: October 2007

        • AU-1.4.11

          In Subparagraph AU-1.4.10 (c), 'advising' means giving advice to a person in his capacity as a policyholder or potential policyholder (or in his capacity as agent for a policyholder or potential policyholder), on the merits of entering into a contract of insurance whether as principal or agent.

          Amended: July 2007
          Amended: October 2007

        • AU-1.4.12

          A person does not carry on the activities specified in Subparagraphs AU-1.4.10 (a) or (b) if he enters or is to enter into a transaction in respect of a contract of insurance as principal.

          Amended: July 2007

        • AU-1.4.13

          A person does not carry on the broking of insurance contracts if he falls under the definition of exempt introducer, defined as:

          (a) A person selling an extended warranty insurance product where the product is sold as part of an exclusive arrangement originated by the product manufacturer and in conjunction with the purchase by the insured of the product;
          (b) A person selling travel insurance as part of, or in conjunction with, a travel package, either directly or through a travel agent (where no advice is being provided other than that contained in the product literature);
          (c) A person, approved or licensed as an insurance intermediary in its country of incorporation or residence, providing marine, aviation or transit insurance, general reinsurance or long-term reinsurance to clients in Bahrain;
          (d) [This Subparagraph was deleted in October 2014]; and
          (e) An insurer or reinsurance broker located outside Bahrain ('A') placing business on behalf of a CBB licensed insurance broker ('B'), where B is carrying on business in Bahrain and on behalf of Bahrain residents and A is acting on behalf of B.
          Amended: October 2014
          Amended: July 2007
          Amended: October 2007

        • AU-1.4.14

          A person does not give advice in relation to an insurance contract by giving advice in any newspaper, journal, magazine, broadcast services or similar service in any medium if the principal purpose of the publication or service, taken as a whole, is neither:

          (a) That of giving advice of the kind mentioned in Paragraph AU-1.4.13; nor
          (b) That of leading or enabling persons to buy insurance contracts.
          Amended: July 2007
          Amended: October 2007

        • AU-1.4.15

          A person does not arrange insurance contracts merely by providing the means by which one party to a transaction is able to communicate with other such parties.

          Amended: October 2007

      • The Offering of Insurance Advice (Insurance Consultants)

        • AU-1.4.16

          The offering of insurance advice means advising on insurance to third parties, without also acting as agent or making arrangements with a view to another person buying insurance.

          Amended: October 2007

        • AU-1.4.16A

          For purposes of Paragraph AU-1.4.16, should the insurance consultant receive a fee for his services as agent from the party that provides the insurance or reinsurance to the third party, such services will be considered as broking of insurance and will be covered under Paragraph AU-1.4.10.

          Added: April 2010

        • AU-1.4.17

          In Paragraph AU-1.4.16, 'advising on insurance' means giving advice to a person in his capacity as a policyholder or potential policyholder (or in his capacity as agent for a policyholder or potential policyholder), on the merits of entering into a contract of insurance whether as principal or agent.

          Amended: July 2007
          Amended: October 2007

        • AU-1.4.18

          A person does not give advice in relation to an insurance contract by giving advice in any newspaper, journal, magazine, broadcast services or similar service in any medium if the principal purpose of the publication or service, taken as a whole, is neither:

          (a) That of giving advice of the kind mentioned in Paragraph AU-1.4.16; nor
          (b) That of leading or enabling persons to buy insurance.
          Amended: July 2007
          Amended: October 2007

        • AU-1.4.19

          Advice given by professionals may not constitute the activity of advising on insurance, even if the matter relates to insurance, providing it satisfies the general exclusion specified in Paragraph AU-1.4.5. These may include circumstances such as lawyers providing legal advice on the interpretation of insurance contracts; business consultancy advice on the establishment of a new business, which may include, in general terms, discussion of the classes of insurance that the business may need; and the interpretation of insurance contracts by loss adjusters.

          Amended: July 2007

      • The Provision of Insurance Management Services (Insurance Managers)

        • AU-1.4.20

          The provision of insurance management services means the provision of management services to, or the exercising of managerial functions on behalf of, an insurance firm.

        • AU-1.4.21

          Management services and managerial functions include the administration and underwriting of insurance contracts.

        • AU-1.4.22

          A person does not provide insurance management services to an insurance firm, if he is an employee or a Board member of that licensee.

          Amended: October 2007

        • AU-1.4.23

          An insurance manager may provide management services to undertakings other than insurance firms, providing that these activities do not compromise the manager's ability to provide a professional service to insurance firms and the manager can meet the licensing conditions specified in Chapter AU-2. It is possible for a group to include separate licensees, one an insurance broker and the other an insurance manager.

      • The Operating of an Insurance Exchange

        • AU-1.4.24

          The operating of an insurance exchange means the maintenance, administration and management of an insurance exchange located within the Kingdom of Bahrain by, inter alia, determining its membership, operating rules or arranging the provision of shared services to users of the exchange.

        • AU-1.4.25

          For the purposes of Paragraph AU-1.4.24, an insurance exchange means a distinct market place comprising as members insurance firms or insurance brokers, and undertaking insurance related activities. The fact that the exchange may undertake other non-insurance related activities does not preclude it from being an 'insurance exchange' within the meaning of Paragraph AU-1.4.24.

          Amended: July 2007