CA-1.1.1

In accordance with Principle of Business 9, insurance licensees must maintain adequate human, financial and other resources sufficient to run their business in an orderly manner.

CA-1.1.2

In the event that an insurance licensee fails to meet the capital and solvency margin requirements outlined in this Module, it must, on becoming aware that it has breached these Rules, notify the CBB immediately and within 25 calendar days submit a plan to the CBB demonstrating how its capital available will be restored and the timeframe for that restoration to occur.

CA-1.1.3

Should the insurance licensee fail to meet the requirements of this Module, the CBB may impose enforcement measures outlined in Module EN.

CA-1.1.4

Unless otherwise indicated, all insurance licensees must implement the requirements of Module CA, effective 31 December 2005 (Refer to ES-2.5.1).

CA-1.2.1

A Bahraini insurance firm must maintain sufficient capital to enable it to meet at all times its insurance and other obligations. The minimum Tier 1 capital for Bahraini insurance firms is BD 5 million, except for those firms whose business is limited to reinsurance. Bahraini insurance firms whose business is limited to reinsurance must have minimum Tier 1 capital of BD 10 million. Overseas insurance firms and captive insurers are not subject to a minimum Tier 1 capital but must comply with the Required Solvency Margin and minimum fund, as defined in Chapter CA-2. In addition, all insurance firms must at all times maintain a capital available in excess of the greater of the Required Solvency Margin and the minimum fund, as defined in Chapter CA-2.

CA-1.2.2

Bahraini insurance firms licensed prior to 1 April 2005 that do not meet the requirements of Paragraph CA-1.2.1, will be required to meet the requirements for minimum Tier 1 capital by 31 December 2007. In addition, the requirements to maintain a capital available in excess of the greater of the Required Solvency Margin and minimum fund must be met by insurance firms by 31 December 2005. Insurance firms who are in run-off and whose license is restricted from entering into new contracts of insurance as per Paragraph GR-8.1.8, are grandfathered and not required to apply the requirements of Paragraph CA-1.2.1 (refer to ES-2.6.2).

CA-1.2.3

An insurance firm must ensure that at all times its capital available does not fall below the minimum fund. In the event that an insurance firm's capital available does fall below the minimum fund, the insurance firm must inject capital and must notify the CBB immediately. Further, the insurance firm must cease to effect any new contracts of insurance, including renewals of existing contracts unless explicitly permitted to do so by the CBB.

Limitation on Valuation of Capital Instruments

Capital Available: Tier 1 and Tier 2

Tier 1 Capital

Tier 2 Capital

Tier 2: Hybrid Capital Instruments

Determination of Capital Available

CA-1.3.1

Bahrain insurance brokers must maintain at all times the greater of:

CA-1.3.1A

For semi-annual reporting under Form IBRS (see Section BR-1.4A), with regards to Subparagraph CA-1.3.1(c), the calculation of the annual income must be done on a moving average year basis. As an example, for the reporting period ending 30th June 2011, annual income from global insurance broking activities covers the period of 1st July 2010 to 30th June 2011.

CA-1.3.1B

Notwithstanding the requirements in Paragraph CA-1.3.1, Insurance aggregators are required to maintain at all times a minimum net assets value of BD 25,000 and adequate liquid funds representing 25% of operating expenses incurred in the preceding financial year at all times in the form of cash or liquid assets that can be converted to cash in the short-term to cover its operating expenses.

CA-1.3.2

There are no minimum capital and net asset requirements for overseas insurance brokers. However, for overseas insurance brokers, financial statements of the parent company must be submitted to the CBB for review, in order to assess the financial stability of the group on a global basis.

CA-1.3.3

For purposes of Paragraph CA-1.3.1, global insurance broking activities refers to annual income of a Bahrain incorporated brokerage firm including any income being generated by any of the firm's brokerage subsidiaries and/or branches operating in other jurisdictions.

CA-1.3.4

In respect of licensees who were carrying out activities that fall within the definition of the regulated activity of insurance broker prior to 1 April 2005, the requirements of Paragraph CA-1.3.1 will apply from 1 January 2007 (refer to ES-2.4.2 for transition rules).

CA-1.3.5

For the purposes of this section, 'net assets' means the excess of assets over liabilities. The minimum net assets value is to be determined by excluding all intangible assets and in accordance with accounting principles generally accepted in Bahrain.

CA-1.3.6

The value of debtors taken into account as assets available to support financial requirements must not exceed the amount which the insurance broker expects to receive net of any significant costs associated with making the recovery.

CA-1.3.7

Insurance brokers must make adequate provisions for any debts which are unlikely to be received or recovered from the debtors.

CA-1.4.1

Insurance consultants and insurance managers must possess financial resources commensurate with the scale and nature of their insurance consultancy or management activities.

CA-1.4.2

In determining the adequacy of the financial resources of insurance consultants and insurance managers, the CBB will consider, amongst other things:

CA-1.4.3

There are no minimum capital and net assets requirements applicable to insurance consultants and insurance managers. However, Section AU-2.5 (Licensing Conditions: Financial Resources) requires all licensees to maintain adequate financial resources and to conduct their business in a prudent manner.