Back Custom print Link Text Only Rich Text Print

  • 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