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  • BC-2 BC-2 The Insurance Code of Practice

    • BC-2.1 BC-2.1 Overarching Principles

      • BC-2.1.1

        In the course of direct insurance activities, licensees must:

        (a) Act with due skill, care and diligence in all dealings with customers;
        (b) Act fairly and reasonably in all dealings with customers;
        (c) Identify customers' specific requirements in relation to the products and services about which they are enquiring;
        (d) Ensure that any advice to customers is aimed at the customers' interests and based on adequate standards of research and analysis;
        (e) Provide sufficient information to enable customers to make informed decisions when purchasing insurance products and services offered to them;
        (f) Provide sufficient and timely documentation to customers to confirm that their insurance arrangements are in place and provide all necessary information about their products, rights and responsibilities;
        (g) Maintain fair treatment of customers through the lifetime of their insurance products and customer relationships, and ensure that customers are kept informed of important events;
        (h) Handle claims fairly and promptly;
        (i) Ensure that all information provided to customers is clear, fair and not misleading, and appropriate to customers' information needs; and
        (j) Take appropriate measures to safeguard any money and property handled on behalf of customers and maintain confidentiality of customer information.
        Amended: January 2007
        Amended: October 2007

    • BC-2.2 BC-2.2 Marketing and Promotion

      • BC-2.2.1

        Licensees must ensure that all advertising and promotional material is clear, fair and not misleading.

    • BC-2.3 BC-2.3 Initial Customer Information about Service

      • BC-2.3.1

        At the initial point of contact, before any contract is concluded between the customer and the insurance licensee, licensees must advise customers of the nature of the service they can offer and their relationship with the customer, including:

        (a) The types of services that can be provided;
        (b) The choice of products and services that can be offered; and
        (c) Whether the licensee acts on behalf of an insurer or insurers, or acts independently on behalf of the customer in arranging insurance.
        Amended: January 2007

    • BC-2.4 BC-2.4 Identification of Customer Requirements

      • BC-2.4.1

        Licensees must identify customers' requirements by seeking from customers such information about their circumstances and objectives as might reasonably be expected to be relevant in establishing their specific insurance needs in relation to the products and services about which they are enquiring.

    • BC-2.5 BC-2.5 Advice and Recommendations

      • BC-2.5.1

        Any recommendations made must be appropriate to the customer's needs. The recommendation must include an explanation as to how the recommended product suits the customer's identified needs. Where more than one product is recommended as appropriate to the customer's needs, the recommendation must include an explanation of the differences in and relative costs in the alternative options.

        Amended: January 2007

      • BC-2.5.2

        In the case of compulsory insurance, such as third party motor liability insurance, the explanation of the product's suitability may be limited to a brief explanation of the obligation to hold such insurance, and the options available to satisfy the obligation.

      • BC-2.5.3

        The objective of Paragraph BC-2.5.1 is to ensure that a customer is provided with sufficient information with which to make an informed decision. An insurance firm is able to rely on the customer's explanation of his insurance needs and is not otherwise required to verify the customer's own assessment of his needs. Given the customer's stated needs, the insurance firm must explain how the proposed contract(s) would meet those needs, and provide sufficient information regarding the different options so that the customer is able to make an informed decision.

        Amended: January 2007

    • BC-2.6 BC-2.6 Customer Information before Commitment to the Contract

      • BC-2.6.1

        Before customers make their final commitment to enter into a contract of insurance, licensees must provide to the customer sufficient information on the key features of the product being proposed to enable the customer to make an informed purchasing decision, including:

        (a) The identity of the insurance licensee;
        (b) All the important details of cover and benefits;
        (c) Any significant or unusual restrictions or exclusions, conditions or obligations attaching to the customer; and
        (d) The period of cover.
        Amended: January 2007
        Amended: October 2007

      • BC-2.6.2

        Before customers make their final commitment to enter into a contract of insurance, licensees must provide to the customer full details of costs of the insurance products and services being offered, including:

        (a) The level of insurance premiums, the periodicity of payment and any grace periods allowed for payment;
        (b) The consequences of discontinuing the payment of any premium; and
        (c) Any fees and charges other than the insurance premium.
        Amended: January 2007
        Amended: October 2007

      • BC-2.6.3

        While an insurance broker may not approach every possible underwriter for each risk, he should make reasonable efforts to make his selection from a panel of insurance firms. An insurance broker's submission of quotations should incorporate the reasons for recommending or choosing an insurance firm.

      • BC-2.6.4

        Except for clients with turnover exceeding BD 1 million per year, an insurance intermediary must draw the client's attention to the status of the insurance firm: i.e. whether or not the insurance firm is locally licensed (as a Bahraini insurance firm or overseas insurance firm) and, if not, the reasons for recommending or choosing that insurance firm. In respect of these clients, this advice must be delivered in writing.

        Amended: January 2007

      • BC-2.6.5

        An insurance intermediary should recommend, in the first instance, a policy from a CBB licensed insurer (which, for the avoidance of doubt, may be an overseas insurance firm) that he considers best suited to the needs of his client, and offering ease of client service, claims handling, etc. Paragraph BC-2.6.4 covers the situation where an insurance intermediary proposes use of an overseas insurer not licensed or incorporated in Bahrain, because of the lack of availability of local cover.

        Amended: January 2007

      • BC-2.6.6

        Insurance intermediaries acting on behalf of customers in arranging their insurance must, on request, disclose the amount of commission payable to them from the insurance premium, and any other remuneration received for arranging the insurance contract.

      • BC-2.6.7

        Before customers make a final commitment to enter into a contract of insurance, licensees must inform the customer of their key obligations and rights with regard to the transaction, including:

        (a) The customer's duty of disclosure to the insurance licensee;
        (b) Cancellation rights and conditions;
        (c) The licensee's internal complaints procedure; and
        (d) The licensee's obligations in respect of this Code.
        Amended: January 2007
        Amended: October 2007

      • BC-2.6.8

        There are no specific requirements prescribing customers' cancellation rights or required standards of cancellation terms for insurance products and customers. It is expected that licensees will put in place cancellation terms that are fair, reasonable and appropriate with respect to their customers and the products provided, in line with the overarching principles requiring fair dealings with customers (see Paragraph BC-2.1.1). The CBB will monitor the regulatory performance of the market in this area, and may make amendments over time (see Paragraphs BC-1.1.11, BC-1.1.12).

        Amended: January 2007

    • BC-2.7 BC-2.7 Confirmation of Cover and Policy Documentation

      • BC-2.7.1

        On the conclusion of contracts, licensees must provide customers with prompt written confirmation and details of the insurance that has been effected, including:

        (a) The date when cover starts and the period of cover;
        (b) Any certificates or documents which the customer is required to have by law;
        (c) Details of how the customer can make a claim, and their responsibilities in relation to making claims;
        (d) The address of the insurer to which all communications in respect of the policy should be sent; and
        (e) Proof of payment where applicable.
        Amended: January 2007

      • BC-2.7.2

        Licensees must provide full policy documentation promptly following the conclusion of contracts, unless this has already been issued with the confirmation of cover.

    • BC-2.8 BC-2.8 Service after the Point of Sale

      • BC-2.8.1

        Licensees must respond to and administer customers' requests for amendments to their insurance policies in a timely manner. In particular, licensees must:

        (a) Provide written confirmation of any changes/amendments to the policy;
        (b) Provide full details of any additional premium or charges to be paid by or returned to the customer;
        (c) Provide any certificate or documentation which the customer is required to have by law;
        (d) Provide proof of payment of additional premium or charges where applicable; and
        (e) Remit any refunds of premiums or charges due to customers without undue delay.
        Amended: January 2007

    • BC-2.9 BC-2.9 Claims

      • BC-2.9.1

        In addition to the requirements under Paragraph BC-2.9.2, where licensees' insurance activities include the handling of claims, they must:

        (a) Respond promptly when claims are first notified, and provide customers with an explanation about how the claim will be handled and any actions required of the customer;
        (b) Provide reasonable guidance to customers in pursuing their claim;
        (c) Consider and handle claims fairly and promptly, and keep the customer informed of progress;
        (d) Inform customers in writing, with an explanation, if the licensee is unable to deal with all or any part of the claim; and
        (e) Forward settlement of claims without undue delay, once settlement has been agreed.
        Amended: April 2016
        Amended: October 2007
        January 2007

      • BC-2.9.2

        Where an insurance firm deals with medical insurance and handles all the claim processing activities directly, i.e. without using a TPA:

        (a) It must process and settle all medical claims with policyholders within 15 calendar days from the receipt of all necessary documents; and
        (b) It must process and settle claims from healthcare service providers within 30 calendar days from the receipt of all necessary documents from the healthcare service providers.
        April 2016

      • BC-2.9.3

        Insurance firms must comply with Paragraph BC-2.9.2 by 30th September 2016 at the latest.

        April 2016

    • BC-2.10 BC-2.10 Renewal, Expiry and Cancellation

      • BC-2.10.1

        Licensees must notify customers of the renewal or expiry of their policy in time to allow the customer to consider and rearrange any continuing cover they may need, including:

        (a) Details of the renewal terms, if offered; and
        (b) Details of any changes to the cover, service or insurance firm being offered.
        Amended: January 2007

      • BC-2.10.2

        On expiry or cancellation of insurance policies, at the request of the customer, licensees must make available all documentation and information to which the customer is entitled in a timely manner.

    • BC-2.11 BC-2.11 [This section was deleted in October 2011]

      • BC-2.11.1

        [This paragraph was deleted in October 2011]

        Deleted: October 2011

      • BC-2.11.2

        [This paragraph was deleted in October 2011]

        Deleted: October 2011
        Amended: January 2007

      • BC-2.11.3

        [This paragraph was deleted in October 2011]

        Deleted: October 2011
        Amended: January 2007

      • BC-2.11.4

        [This paragraph was deleted in October 2011]

        Deleted: October 2011
        Amended: January 2007

      • BC-2.11.5

        [This paragraph was deleted in October 2011]

        Deleted: October 2011
        Amended: October 2007
        Amended: January 2007

    • BC-2.12 BC-2.12 Information Conditions

      • BC-2.12.1

        Licensees must ensure that all information presented to customers in accordance with this Code shall be clear, fair and not misleading, and comprehensible to the customer having regard to the complexity of the products and services being offered and the customer's knowledge.

      • BC-2.12.2

        Licensees must ensure that customer information presented to customers in accordance with this Code is provided in an appropriate format with regard to the complexity of the product being discussed. In particular:

        (a) As a general rule, all information to be provided to the customer in accordance with this Code is to be in writing, on paper or other durable medium available and accessible to the customer. If the information is initially presented orally, supporting written information must be provided in addition;
        (b) In the case of telephone selling and other forms of selling where it is impractical to provide information to the customer in writing at the point of sale, information shall be provided to the customer in accordance with Subparagraph BC-2.12.2(a) immediately following conclusion of the contract; and
        (c) By way of derogation from Subparagraph BC-2.12.2(a), information may be provided orally without supporting written information where the customer requests it, or where immediate cover is necessary.
        Amended: January 2007

    • BC-2.13 BC-2.13 Fair Treatment and Conflicts of Interest

      • BC-2.13.1

        Licensees must avoid conflicts of interest, or if conflicts are unavoidable, must explain the position fully and manage the situation so as to avoid prejudice to any party. In particular, licensees who act on behalf of their customers must not put their own interests above their duty to any customers for whom they act.

      • BC-2.13.2

        Insurance intermediaries must disclose in writing to the client any relationship that he may have with an insurance firm that he is recommending to his client and which may result in a potential conflict of interest including, but not limited to, disclosure in writing any association arising from common shareholder/controller/Director.

        Amended: January 2007

    • BC-2.14 BC-2.14 Confidentiality and Security of Customer Assets

      • BC-2.14.1

        Licensees must ensure that any information obtained from customers must not be used or disclosed except in the normal course of negotiating, maintaining or renewing insurance for that customer, unless:

        (a) They have the customer's consent;
        (b) Disclosure is made in accordance with the licensee's regulatory obligations; or
        (c) The licensee is legally obliged to disclose the information.
        Amended: January 2007

      • BC-2.14.2

        Licensees must take appropriate steps to ensure the security of any money, documents, other property or information handled or held on behalf of customers.