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  • 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