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  • RM-8.1 RM-8.1 Group Risk

    • RM-8.1.1

      Section RM-8.1 applies only to Bahraini insurance firms and Bahraini insurance brokers.

      Amended: October 2007

    • RM-8.1.2

      An insurance licensee must identify, manage and control risks to its activities arising from the activities and financial position of other members of its group.

    • RM-8.1.3

      The CBB may impose additional restrictions on the insurance licensee should it have reason to believe that other members of the group pose undue risk to the insurance licensee. These restrictions, for instance, may try to limit the risk of financial contagion, by restricting financial transactions between the licensee and group members.

      Amended: January 2007
      Amended: October 2007

    • RM-8.1.4

      For purposes of Section RM-8.1, the term group refers to a person or firm who is:

      (a) The parent of the licensee;
      (b) A subsidiary of the licensee (including subsidiaries of subsidiaries); or
      (c) A subsidiary of the licensee's parent.
      Amended: January 2007

    • RM-8.1.5

      The Board is expected to request sufficient information of its group members to allow it to address group risks.

    • RM-8.1.6

      Where the licensee's group or parent reports its own solvency position to its regulatory authority (on a group or 'solo' basis), a copy of this calculation must be provided to the CBB within 30 calendar days from the due date to the other regulatory authority, in accordance with Paragraph CA-7.1.8.

      Amended: January 2007
      Amended: October 2007

    • RM-8.1.7

      Where a licensee is part of a larger financial services group, it may rely on the systems and controls that the group (or its parent company) has put in place. The Board in these circumstances should establish what systems and controls are in place and should ensure that it is provided with sufficient and timely information on the solvency position of the group. This should be evidenced in the prudential records retained in Bahrain.

      Amended: January 2007
      Amended: October 2007

    • RM-8.1.8

      In assessing group systems and controls, an insurance licensee must give consideration to:

      (a) The likely impact of activities of the group on the compliance of the licensee with CBB requirements;
      (b) The effectiveness of linkages between group central functions and the licensee;
      (c) Potential conflicts of interest and methods of minimising them; and
      (d) The risk of adverse events of other group entities on the licensee, in particular due to financial weakness, crime or fraudulent behaviour.
      Amended: January 2007
      Amended: October 2007

    • RM-8.1.9

      An insurance licensee should not be subject to material influence by other entities of the group through informal or undocumented channels. The overall governance, high-level controls and reporting lines with the group should be clearly documented.

      Amended: October 2007