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  • CA-3.1 CA-3.1 Long-Term Insurance Business

    • CA-3.1.1

      Where an insurance firm carries on long-term insurance business, including traditional long-term insurance business or linked long-term insurance business or both:

      (a) It must maintain a separate account and separate books of accounts in respect of each kind of business and unit fund; and
      (b) The receipts of each kind of business must be entered in the account maintained for that business and must be carried to and form a separate long-term insurance fund with an appropriate name.
      Amended: October 2009
      Amended: October 2007
      Amended: January 2007

    • CA-3.1.1A

      Where the bonus policy of the with-profits business explicitly mentions that the profit (or bonuses) are determined by the performance of the life fund, separate accounting for such funds must be maintained.

      Adopted: October 2009

    • CA-3.1.1B

      The requirement in Paragraph CA-3.1.1A is to ensure that sources of profits arising from with-profits block of business will be distributed according to the agreed profit sharing mechanisms (which may include a proportion to the shareholders) and sources of profits arising purely from non-profits business will be allocated to shareholders.

      Adopted: October 2009

    • CA-3.1.2

      An insurance firm which carries on long-term insurance business or linked long-term insurance business must maintain such accounting and other records as are necessary for identifying:

      (a) The assets representing the fund maintained by it under Paragraph CA-3.1.1 above; and
      (b) The liabilities attributable to each kind of business which it carries on.
      Amended: January 2007

    • CA-3.1.3

      Other than the explicit exceptions included in Paragraphs CA-3.1.4 and CA-3.1.5 of this Module, an insurance firm's long-term insurance business assets must only be applied for the purposes of its long-term insurance business and must not be made available for any other purpose of the insurance firm. This does not however prevent the reimbursement of expenditure borne by other assets (in the same or the preceding financial year) in discharging liabilities wholly or partly attributable to the long-term insurance business.

      Amended: January 2007

    • CA-3.1.4

      Where an actuarial investigation shows that the value of the long-term insurance business assets exceeds the amount of the liabilities attributable to the long-term insurance business, the restriction does not apply to those assets that represent the excess.

      Amended: January 2007

    • CA-3.1.5

      Paragraph CA-3.1.3 above does not prevent an insurance firm from exchanging, at fair market value, long-term insurance business assets for other assets of the insurance firm.

      Amended: January 2007

    • CA-3.1.6

      A long-term insurance firm must not enter into a financial transaction, and must take reasonable steps to ensure that any subsidiary company or associate company does not enter into such a transaction, with any related party where the aggregate of the value of any assets and liabilities arising out of such transactions exceeds 5% of the total amount standing to the credit of the insurer's long-term insurance funds.

      Amended: January 2007

    • CA-3.1.7

      An insurance firm which carries on long-term insurance business in Bahrain must have adequate arrangements for securing that transactions affecting assets of the insurance firm (other than transactions outside of its control) do not operate unfairly between the long-term insurance fund or funds and the other assets of the insurance firm or, in a case where the insurance firm has more than one 'identified fund', between those funds.

      Amended: January 2007

    • CA-3.1.8

      An identified fund means assets representing the insurance firm's receipts from a particular part of its long-term insurance business that can be identified as such by virtue of accounting or other records maintained by the insurance firm.

      Amended: January 2007

    • CA-3.1.9

      Where the CBB imposes a financial penalty on an insurance firm or requires an insurance firm to compensate policyholders for any wrongful act of the insurance firm (including any wrongful act committed by an appointed representative of the insurance firm) it must not pay that compensation or financial penalty from any long-term insurance fund. Such penalties can only be paid out of the shareholder (or company) fund.

      Amended: January 2007