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  • Tier 1 Capital

    • CA-1.2.8

      Tier 1 capital comprises:

      (a) Paid-up ordinary shares (net of treasury shares);
      (b) Share premium reserve;
      (c) Perpetual non-cumulative preference shares.
      (d) All disclosed reserves brought forward, that are audited and approved by the shareholders, in the form of legal, general and other reserves created by appropriations of retained earnings, excluding fair value reserve;
      (e) Unappropriated retained earnings, excluding cumulative unrealised fair value gains, brought forward;
      (f) Audited current year's earnings net of unrealised fair value gains and before taxes; and
      (g) In the case of an overseas insurance firm, the audited net assets (excluding any unrealised fair value gains and the surplus assets of long-term funds), determined in accordance with accounting standards that would be applicable if it were a joint stock company incorporated in Bahrain.
      Amended: January 2007

    • CA-1.2.9

      Tier 1 capital elements included in Subparagraph CA-1.2.8 (a) to (c) can only be so included if:

      (a) It is issued by the insurance firm;
      (b) It is fully paid, and only that portion of the shares for which payment has been received is otherwise included; and
      (c) It:
      (i) Cannot be redeemed at all or can only be redeemed on a winding up of the insurance firm; or
      (ii) Is only redeemable at the option of the insurance firm and complies with any conditions applicable to joint stock companies in Bahrain;
      (d) Any coupon is non-cumulative;
      (e) It is able to absorb losses;
      (f) It ranks for repayment upon winding up no higher than a share of a company incorporated under the Joint Stock companies law of Bahrain;
      (g) Coupons on it can only be paid out of accumulated realised profits;
      (h) No coupon is payable at a time when the insurer is in breach of Paragraph CA-1.2.1 and no coupon is payable to the extent that, after paying it, the insurance firm would breach that Rule; and
      (i) The proceeds of issue are immediately and fully available to the insurance firm.
      Amended: January 2007

    • CA-1.2.10

      Tier 1 capital has the following characteristics:

      (a) It is able to absorb losses;
      (b) It is permanent;
      (c) It ranks for repayment upon winding up after all other debts and liabilities; and
      (d) It has no fixed costs, that is, there is no inescapable obligation to pay dividends or interest.
      Amended: January 2007

    • CA-1.2.11

      An insurance firm must not redeem any tier 1 instrument that it has included in its Tier 1 capital resources for the purpose of Chapter CA-1 unless it has notified the CBB of its intention at least one month before it does so.

      Amended: January 2007
      Amended: October 2007