HC-2.1 HC-2.1 Board Committees[versions up to January 2011]
HC-2.1.1 [versions up to January 2011]
Bahraini insurance licensees must establish Board Committees appropriate to the scale and complexity of their operations.HC-2.1.2 [versions up to January 2011]
Board Committees can enhance the effectiveness of Boards, both in their management of a licensee's risks, and in addressing potential conflicts of interest. In particular, three key areas where there is a need for checks and balances within the Board include: (a) the nomination of
Directors ; (b) the remuneration ofDirectors ; and (c) the audit of the licensee's financial performance. These areas are typically addressed by, respectively, the Nominations Committee, the Remuneration Committee and the Audit Committee. Where a licensee's Board does not consider it necessary to create Board Committees, it must be prepared to give reasons for its decision to the CBB.Amended: January 2007HC-2.1.3 [versions up to January 2011]
The CBB expects licensees, as a minimum, to establish an Audit Committee. The CBB would expect larger licensees to establish other committees as well. Where a licensee's Board does not consider it necessary to create Board committees, it must be prepared to give reasons for its decision to the CBB.
Amended: January 2007HC-2.1.4 [versions up to January 2011]
The CBB would expect to see committees dealing with the issues listed in (a) to (c) in Paragraph HC-2.1.2 to be chaired by an
independent non-executive Director and for the majority of its members to beindependent non-executive Directors .Amended: January 2007HC-2.1.5 [versions up to January 2011]
Where an
insurance licensee has been granted an exemption under Paragraph HC-1.2.8, upon application, an exemption may also be granted from Paragraph HC-2.1.1.Amended: January 2007HC-2.1.6 [versions up to January 2011]
Board Committees must have:
(a) Written terms of reference, which are reviewed annually;(b) Adequate records of their meetings, such that key decisions and how they are arrived at can be traced; and(c) Appropriate membership, which addresses potential conflicts of interest.Amended: January 2007
