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  • FC-B FC-B Scope of Application

    • FC-B.1 FC-B.1 License Categories

      • FC-B.1.1

        Chapters FC-1 to FC-9 apply to all insurance firms and insurance brokers. These Chapters also apply to insurance managers where they manage a captive insurer. Chapters FC-1 to FC-9 do not apply to insurance consultants.

      • FC-B.1.2

        Chapters FC-1 to FC-9 apply, as specified in Paragraph FC-B.1.1, to all insurance firms, insurance brokers and, where they manage a captive insurer, insurance managers, irrespective of whether they are a Bahraini insurance licensee or an overseas insurance licensee. Overseas insurance licensees, and Bahraini insurance licensees that are subsidiaries of an overseas group, may apply additional AML/CFT policies and procedures, provided they satisfy the minimum requirements contained in this Module.

        Amended: January 2007
        Amended: October 2007

      • FC-B.1.3

        The Rules and Guidance in this Module are in addition to and supplement the requirements contained in Decree Law No. (4) of 2001 with respect to the prevention and prohibition of the laundering of money; this Law was subsequently updated, with the issuance of Decree Law No. 54 of 2006 with respect to amending certain provisions of Decree No. 4 of 2001 (collectively, 'the AML Law'). The AML Law imposes obligations generally in relation to the prevention of money laundering and the combating of the financing of terrorism, to all persons resident in Bahrain (including financial services firms such as insurance licensees). All insurance licensees are under the statutory obligations of that Law, in addition to the more specific requirements contained in this Module. Nothing in this Module is intended to restrict the application of the AML Law (a copy of which is contained in Part B of Volume 3 (Insurance), under 'Supplementary Information'). Also included in Part B is a copy of Decree Law No. 58 of 2006 with respect to the protection of society from terrorism activities ('the anti-terrorism law').

        Amended: January 2007

      • FC-B.1.4

        Chapter FC-10, dealing with insurance fraud, applies to all insurance licensees.

    • FC-B.2 FC-B.2 Types of Insurance Business

      • FC-B.2.1

        This Module applies to all types of insurance contracts, including general and long-term insurance, as well as to reinsurance and captive insurance business.

        Amended: January 2007
        Amended: October 2007

      • FC-B.2.2

        International experience shows that all types of insurance (including general insurance and reinsurance) have been used as channels for illegal activities. However, the CBB also recognises that in the case of pure reinsurance transactions, these risks may exist to a lesser extent. Consequently, upon application by the licensee, the CBB will consider, on an individual basis, exemptions from specific requirements of this Module, in relation to the reinsurance activities of licensees. Normally, the CBB will consider granting such exemptions where the reinsurer concerned deals only with licensed insurance entities, that are subject to AML / CFT standards equivalent to those in this Module.

        Amended: January 2007
        Amended: October 2007

    • FC-B.3 FC-B.3 Overseas Subsidiaries and Branches

      • FC-B.3.1

        Insurance licensees must apply the requirements in this Module to all their branches and subsidiaries, including those operating in another jurisdiction. Where local standards differ, the higher standard must be followed. Insurance licensees must pay particular attention to procedures in branches and subsidiaries in countries that do not or insufficiently apply the FATF Recommendations and Special Recommendations and do not have adequate AML/CFT procedures, systems and controls (see also Section FC-7.1).

        Amended: October 2015
        Amended: January 2007

      • FC-B.3.2

        Where another jurisdiction's laws or Regulations prevent an insurance licensee (or any of its foreign branches or subsidiaries) from applying the same standards contained in this Module or higher, the licensee must immediately inform the CBB in writing.

        Amended: January 2007

      • FC-B.3.3

        In such instances, the CBB will review alternatives with the insurance licensee. Should the CBB and the licensee be unable to reach agreement on the satisfactory implementation of this Module in a foreign subsidiary or branch, the insurance licensee may be required by the CBB to cease the operations of the subsidiary or branch in the foreign jurisdiction in question.

        Amended: January 2007

      • FC-B.3.4

        Financial groups (e.g. an insurance firm with its subsidiaries) must implement groupwide programmes against money laundering and terrorist financing, including policies and procedures for sharing information within the group for AML/CFT purposes, which must also be applicable, and appropriate to, all branches and subsidiaries of the financial group. These must include:

        (a) The development of internal policies, procedures and controls, including appropriate compliance management arrangements, and adequate screening procedures to ensure high standards when hiring employees;
        (b) An ongoing employee training programme;
        (c) An independent audit function to test the system;
        (d) Policies and procedures for sharing information required for the purposes of CDD and money laundering and terrorist financing risk management;
        (e) The provision at group-level compliance, audit, and/or AML/CFT functions of customer, account and transaction information from branches and subsidiaries when necessary for AML/CFT purposes; and
        (f) Adequate safeguards on the confidentiality and use of information exchanged.
        Amended: January 2018
        Added: October 2015