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  • FC-1 FC-1 Customer Due Diligence Requirements

    • FC-1.1 FC-1.1 General Requirements

      • Verification of Identity and Source of Funds

        • FC-1.1.1

          Insurance licensees must establish effective systematic internal procedures for establishing and verifying the identity of their customers and the source of their funds. Such procedures must be set out in writing and approved by the licensee’s senior management and must be strictly adhered to.

          Amended: January 2020
          Amended: October 2015
          Amended: January 2007

        • FC-1.1.2

          Insurance licensees must implement the customer due diligence measures outlined in this Chapter when:

          (a) Establishing business relations with a new or existing customer;
          (b) A change to the signatory or policyholder beneficiary is made;
          (c) A significant transaction takes place;
          (d) There is a material change in the terms of an insurance policy or in the manner in which the business relationship is conducted;
          (e) Customer documentation standards change substantially;
          (f) The insurance licensee has doubts about the veracity or adequacy of previously obtained customer due diligence information;
          (g) [This Sub-paragraph was deleted in July 2018]; or
          (h) There is a suspicion of money laundering or terrorist financing.
          Amended: July 2018
          Amended: January 2007

        • FC-1.1.2A

          Insurance licensees must understand, and as appropriate, obtain information on the purpose and intended nature of the business relationship.

          Added: October 2015

        • FC-1.1.2B

          Insurance licensees must conduct ongoing due diligence on the business relationship, including:

          (a) Scrutinizing of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the institution's knowledge of the customer, their business and risk profile, including, where necessary, the source of funds; and
          (b) Ensuring that documents, data or information collected under the CDD process is kept up-to-date and relevant, by undertaking reviews of existing records, particularly for higher risk categories of customers.
          Amended: October 2017
          Added: October 2015

        • FC-1.1.2C

          An insurance licensee must also review and update the customer’s risk profile based on their level of ML/TF/PF risk upon onboarding the customer and regularly throughout the life of the relationship. The risk management and mitigation measures implemented by a licensee must be commensurate with the risk profile of a particular customer or type of customer.

          Added: January 2022

        • FC-1.1.3

          For the purposes of this Module, 'customer' includes counterparties such as reinsurers and financial markets counterparties, as well as persons insured by the licensee. However, in the case of group insurance policies (such as group life or medical), the requirements in this Module need not be applied to all policyholders: see Paragraph FC-1.2.13. For insurance brokers, 'customer' refers to policyholders.

          Amended: July 2009
          Amended: January 2007

        • FC-1.1.4

          The CBB's specific minimum standards to be followed with respect to verifying customer identity and source of funds are contained in Section FC-1.2. Enhanced requirements apply under certain high-risk situations: these requirements are contained in Sections FC-1.3 to FC-1.5 inclusive. Simplified customer due diligence measures may apply in defined circumstances: these are set out in Section FC-1.6.

          Amended: January 2007

        • FC-1.1.5

          Where an insurance licensee is dealing with an intermediary such as a broker, reliance may be placed on customer identification undertaken by the intermediary, if certain conditions are satisfied: please refer to Chapter FC-1.7.

      • Verification of Third Parties

        • FC-1.1.6

          Insurance licensees must obtain a signed statement, in hard copy or through digital means from all new customers confirming whether or not the customer is acting on his own behalf or not. This undertaking must be obtained prior to conducting any transactions with the customer concerned.

          Amended: January 2022
          Amended: January 2007

        • FC-1.1.7

          Where a customer is acting on behalf of a third party, the insurance licensee must also obtain a signed statement from the third party, confirming they have given authority to the customer to act on their behalf. Where the third party is a legal person, the insurance licensee must have sight of the original Board resolution (or other applicable document) authorising the customer to act on the third party's behalf, and retain a certified copy.

          Amended: January 2007

        • FC-1.1.8

          Insurance licensees must establish and verify the identity of the customer and (where applicable) the party/parties on whose behalf the customer is acting. In the case of insurance policies, the identity of the beneficiaries must also be separately identified and verified, and the relationship between the insured party and the beneficiaries must be ascertained. Verification must take place in accordance with the requirements specified in this Chapter.

          Amended: January 2007

        • FC-1.1.9

          If claims, commissions, and other monies are to be paid to persons (including partnerships, companies, etc.) other than the policyholder, then the identity of the proposed recipient of these monies must also be verified in accordance with the requirements specified in this Chapter.

          Amended: January 2007

        • FC-1.1.10

          Where a policy is provided to a minor or other person lacking full legal capacity, the normal identification procedures as set out in this Chapter must be followed. In the case of minors, licensees must additionally verify the identity of the parent(s) or legal guardian(s). Where a third party on behalf of a person lacking full legal capacity subscribes to a policy, the licensee must establish the identity of that third party as well as the intended policyholder.

          Amended: January 2007

      • Anonymous and Nominee Accounts

        • FC-1.1.11

          Insurance licensees must not establish or keep anonymous policies or policies in fictitious names. Where insurance licensees maintain a nominee account, which is controlled by or held for the benefit of another person, the identity of that person must be disclosed to the insurance licensee and verified by it in accordance with the requirements specified in this Chapter.

      • Timing of Verification

        • FC-1.1.12

          Insurance licensees must not commence a business relationship or undertake a transaction with a customer before completion of the relevant customer due diligence (‛CDD’) measures specified in this Chapter. Licensees must also adopt risk management procedures with respect to the conditions under which a customer may utilise the business relationship prior to verification. However, verification may be completed after receipt of funds in the case of non-face-to-face business, or the subsequent submission of CDD documents by the customer after undertaking initial customer due diligence provided that no disbursement of funds takes place until after the requirements of this Chapter have been fully met.

          Amended: January 2022
          Amended: January 2007

      • Incomplete Customer Due Diligence

        • FC-1.1.13

          Where an insurance licensee is unable to comply with the requirements specified in this Chapter, it must consider whether to terminate the relationship or not proceed with the transaction. If funds have been received, these must be returned to the counterparty in the same method as originally received. If it proceeds with the transaction (to avoid tipping off the customer), it should additionally consider whether it should file a suspicious transaction report.

          Amended: October 2015
          Amended: January 2007

        • FC-1.1.14

          See also Chapter FC-4, which covers the filing of suspicious transaction reports. Regarding the return of funds to the counterparty, if funds are received in cash, funds should be returned in cash. If funds are received by wire transfer, they should be returned by wire transfer.

          Amended: October 2015

      • Non-Resident Accounts

        • FC-1.1.14A

          Insurance licensees that transact or deal with non-resident customers who are natural persons must have documented criteria for acceptance of business with such persons. For non-resident customers, insurance licensees must ensure the following:

          (a) Ensure there is a viable economic reason for the business relationship;
          (b) Perform enhanced due diligence where required in accordance with Paragraph FC-1.1.17;
          (c) Obtain and document the country of residence for tax purposes where relevant;
          (d) Obtain evidence of banking relationships in the country of residence;
          (e) Obtain the reasons for dealing with licensee in Bahrain; and
          (f) Test that the persons are contactable without unreasonable delays.
          Amended: October 2023
          Added: January 2022

        • FC-1.1.14B

          Insurance licensees that transact or deal with non-resident customers who are natural persons must have documented approved policies in place setting out the products and services which will be offered to non-resident customers. Such policy document must take into account a comprehensive risk assessment covering all risks associated with the products and services offered to non-residents. The licensee must also have detailed procedures to address the risks associated with the dealings with non-resident customers including procedures and processes relating to authentication, genuineness of transactions and their purpose.

          Added: January 2022

        • FC-1.1.14C

          Insurance licensees must not accept non-residents customers from high risk jurisdictions subject to a call for action by FATF.

          Added: January 2022

        • FC-1.1.14D

          Insurance licensees must take adequate precautions and risk mitigation measures before onboarding non-resident customers from high risk jurisdictions. The licensees must establish detailed assessments and criteria that take into consideration FATF mutual evaluations, FATF guidance, the country national risk assessments (NRAs) and other available guidance on onboarding and retaining non-resident customers from the following high risk jurisdictions:

          (a) Jurisdictions under increased monitoring by FATF;
          (b) Countries upon which United Nations sanctions have been imposed except those referred to in Paragraph FC-1.1.12B; and
          (c) Countries that are the subject of any other sanctions.
          Added: January 2022

        • FC-1.1.14E

          [This Paragraph has been deleted in October 2023].

          Deleted: October 2023
          Added: January 2022

        • FC-1.1.14F

          Insurance licensees must establish systems and measures that are proportional to the risk relevant to each jurisdiction and this must be documented. Such a document must show the risks, mitigation measures for each jurisdiction and for each non-resident customer.

          Added: January 2022

        • FC-1.1.14G

          Insurance licensees must establish a comprehensive documented policy and procedures describing also the tools, methodology and systems that support the licensee’s processes for:

          (a) The application of RBA;
          (b) Customer due diligence;
          (c) Ongoing transaction monitoring; and
          (d) Reporting in relation to their transactions or dealings with non-resident customers.
          Added: January 2022

        • FC-1.1.14H

          Insurance licensees must ensure that only the official/government documents are accepted for the purpose of information in Subparagraphs FC-1.2.1 (a) to (f) in the case of non-resident customers.

          Added: January 2022

        • FC-1.1.14I

          [This Paragraph has been deleted in October 2023]

          Deleted: October 2023
          Added: January 2022

      • Existing Customers

        • FC-1.1.15

          [This Paragraph was deleted in October 2015.]

          Deleted: October 2015

        • FC-1.1.16

          [This Paragraph was deleted in October 2015.]

          Deleted: October 2015
          Amended: January 2007

        • FC-1.1.17

          Insurance licensees must follow the below CDD and customer onboarding requirements:

            Enhanced Due Diligence Digital Onboarding
          Bahrainis and GCC nationals (wherever they reside) and expatriates resident in Bahrain No Yes
          Others Yes Yes
          Added: October 2023

    • FC-1.2 FC-1.2 Face-to-face Business

      • Natural Persons

        • FC-1.2.1

          If the customer is a natural person, the insurance licensee must identify the person’s identity and obtain the following information before providing financial services of any kind:

          a) Full legal name and any other names used;
          b) Full permanent address (i.e. the residential address of the customer; a post office box is insufficient);
          c) Date of birth;
          d) Nationality;
          e) Passport number (if the customer is a passport holder);
          f) Current CPR or Iqama number (for Bahraini or GCC residents only) or government issued national identification proof;
          g) Telephone/fax number and email address (where applicable);
          h) Occupation or public position held (where applicable);
          i) Employer's name and address (if self-employed, the nature of the self-employment);
          j) Type of policy, and nature and volume of anticipated business dealings with the insurance licensee;
          k) Signature of the customer(s);
          l) Source of funds for payment of premium;
          m) Reason for opening the account; and
          n) Place of birth.
          Amended: January 2024
          Amended: January 2022
          Amended: January 2020
          Amended: July 2018
          Amended: January 2007

        • FC-1.2.1A

          Insurance licensees obtaining the information and customer signature electronically using digital applications must comply with the applicable laws governing the onboarding/business relationship including but not limited to the Electronic Transactions Law (Law No. 54 of 2018) for the purposes of obtaining signatures as required in Subparagraph FC-1.2.1 (k) above.

          Added: January 2022

        • FC-1.2.2

          See Part B, Volume 3 (Insurance), for a Guidance Note on source of funds.

        • FC-1.2.3

          The insurance licensee must verify the information in Paragraph FC-1.2.1 (a) to (f), by the following methods below; at least one of the copies of the identification documents mentioned in (a) and (b) below must include a clear photograph of the customer:

          (a) Confirmation of the date of birth and legal name, by use of the national E-KYC application and if this is not practical, obtaining a copy of a current valid official original identification document (e.g. birth certificate, passport, national identity card, CPR or Iqama);
          (b) Confirmation of the permanent residential address by use of the national E-KYC application and if this is not practical, obtaining a copy of a recent utility bill, bank statement or similar statement from another licensee or financial institution, or some form of official correspondence or official documentation card, such as national identity card or CPR, from a public/governmental authority, or a tenancy agreement or record of home visit by an official of the licensee; and
          (c) Where appropriate, direct contact with the customer by phone, letter or email to confirm relevant information, such as residential address information.
          Amended: January 2022
          Amended: January 2007

        • FC-1.2.4

          Any document copied or obtained for the purpose of identification verification in a face-to-face customer due diligence process must be an original. An authorised official of the licensee must certify the copy, by writing on it the words ‘original sighted’, together with the date and his signature. Equivalent measures must be taken for electronic copies.

          Amended: January 2022

        • FC-1.2.5

          Identity documents which are not obtained by an authorised official of the licensee in original form (e.g. due to a customer sending a copy by post following an initial meeting) must instead be certified (as per FC-1.2.4) by one of the following from a GCC or FATF member state:

          (a) A lawyer;
          (b) A notary;
          (c) A chartered/certified accountant;
          (d) An official of a government ministry;
          (e) An official of an embassy or consulate; or
          (f) An official of another licensed financial institution or of an associate company of the licensee.
          Amended: January 2007

        • FC-1.2.6

          The individual making the certification under FC-1.2.5 must give clear contact details (e.g. by attaching a business card or company stamp). The insurance licensee must verify the identity of the person providing the certification through checking membership of a professional organisation (for lawyers or accountants), or through checking against databases/websites, or by direct phone or email contact.

          Amended: January 2007

      • Legal Entities or Legal Arrangements (such as trusts)

        • FC-1.2.7

          If the customer is a legal entity or a legal arrangement such as a trust, the insurance licensee must obtain and record the following information from original identification documents, databases or websites, in hard copy or electronic form, to identify the customer and to take reasonable measures to verify its identity, legal existence and structure:

          (a) The entity's full name and other trading names used;
          (b) Registration number (or equivalent);
          (c) Legal form and proof of existence;
          (d) Registered address and trading address (where applicable);
          (e) Type of business activity;
          (f) Date and place of incorporation or establishment;
          (g) Telephone, fax number and email address;
          (h) Regulatory body or listing body (for regulated activities such as financial services and listed companies);
          (hh) The names of the relevant persons having a senior management position in the legal entity or legal arrangement;
          (i) Name of external auditor (where applicable);
          (j) Type of policy, and nature and volume of anticipated business dealings with the insurance licensee; and
          (k) Source of funds for payment of premium.
          Amended: October 2017
          Amended: January 2007

        • FC-1.2.8

          The information provided under FC-1.2.7 must be verified by obtaining certified copies of the following documents, as applicable (depending on the legal form of the entity):

          (a) Certificate of incorporation and/or certificate of commercial registration or trust deed;
          (b) Memorandum of association;
          (c) Articles of association;
          (d) Partnership agreement;
          (e) Board resolution seeking the insurance services (only necessary in the case of private or unlisted companies);
          (f) Identification documentation of the authorised signatories of the insurance contract;
          (g) Copy of the latest financial report and accounts, audited where possible (audited copies do not need to be certified); and
          (h) List of authorised signatories of the company for the insurance contract and a Board resolution (or other applicable document) authorising the named signatories or their agent to receive any proceeds from the insurance contract or to modify the terms of the contract (resolution only necessary for private or unlisted companies).
          Amended: January 2007

        • FC-1.2.8A

          For customers that are legal persons, Insurance licensees must identify and take reasonable measures to verify the identity of beneficial owners through the following information:

          (a) The identity of the natural person(s) who ultimately have a controlling ownership interest in a legal person, and
          (b) To the extent that there is doubt under (a) as to whether the person(s) with the controlling ownership interest is the beneficial owner(s), or where no natural person exerts control of the legal person or arrangement through other means; and
          (c) Where no natural person is identified under (a) or (b) above, the identity of the relevant natural person who holds the position of senior managing official.
          Amended: October 2017
          Amended: January 2007

        • FC-1.2.9

          Documents obtained to satisfy the requirements in FC-1.2.8 above must be certified in the manner specified in FC-1.2.4 to FC-1.2.6.

        • FC-1.2.9A

          For the purpose of Paragraph FC-1.2.8(a), the requirement to obtain a certified copy of the commercial registration, may be satisfied by obtaining a commercial registration abstract printed directly from the Ministry of Industry, Commerce and Tourism's website, through "SIJILAT Commercial Registration Portal".

          Added: January 2017

        • FC-1.2.10

          The documentary requirements in FC-1.2.8 above do not apply in the case of FATF/GCC listed companies: see Section FC-1.6 below. Also, the documents listed in FC-1.2.8 above are not exhaustive: for customers from overseas jurisdictions, documents of an equivalent nature may be produced as satisfactory evidence of a customer's identity.

          Amended: January 2007

        • FC-1.2.11

          Insurance licensees must also obtain and document the following due diligence information. These due diligence requirements must be incorporated in the licensee's new business procedures:

          (a) Enquire as to the structure of the legal entity or trust sufficient to determine and verify the identity of the ultimate provider of funds and ultimate controller of the funds (if different);
          (b) Ascertain whether the legal entity has been or is in the process of being wound up, dissolved, struck off or terminated;
          (c) Obtain the names, country of residence and nationality of Directors or partners (only necessary for private or unlisted companies, and for trustees in the case of trusts);
          (d) Require, through new customer documentation or other transparent means, updates on significant changes to corporate ownership and/or legal structure;
          (e) Obtain and verify the identity of shareholders holding 20% or more of the issued capital (where applicable). The requirement to verify the identity of these shareholders does not apply in the case of FATF/GCC listed companies;
          (f) In the case of trusts or similar arrangements, establish the identity of the settlor(s), trustee(s), and beneficiaries (including making such reasonable enquiries as to ascertain the identity of any other potential beneficiary, in addition to the named beneficiaries of the trust); and
          (g) Where a licensee has reasonable grounds for questioning the authenticity of the information supplied by a customer, conduct additional due diligence to confirm the above information.
          Amended: January 2007

        • FC-1.2.12

          For the purposes of Paragraph FC-1.2.11, acceptable means of undertaking such due diligence might include taking bank references; visiting or contacting the company by telephone; undertaking a company search or other commercial enquiries; accessing public and private databases (such as stock exchange lists); making enquiries through a business information service or credit bureau; confirming a company's status with an appropriate legal or accounting firm; or undertaking other enquiries that are commercially reasonable.

        • FC-1.2.13

          In the case of group insurance policies (such as group life or medical insurance), customer identification may be limited to the principal shareholders and Directors of the contracting company.

          Amended: January 2007

    • FC-1.3 FC-1.3 Enhanced Customer Due Diligence: General Requirements

      • FC-1.3.1

        Enhanced customer due diligence must be performed on those customers identified as having a higher risk profile, and additional inquiries made or information obtained in respect of those customers. If the insurance licensee determines that a beneficiary who is a legal person or a legal arrangement presents a higher risk, it must take enhanced measures which must include reasonable measures to identify and verify the identity of the beneficial owner of the beneficiary, at the time of payout.

        Amended: January 2022
        Amended: January 2007

      • FC-1.3.2

        Licensees should examine, as far as reasonably possible, the background and purpose of all complex, unusual large transactions, and all unusual patterns of transactions, which have no apparent economic or lawful purpose. Where the risks of money laundering or terrorist financing are higher, licensees should conduct enhanced CDD measures, consistent with the risks identified. In particular, they should increase the degree and nature of monitoring of the business relationship, in order to determine whether those transactions or activities appear unusual or suspicious. The additional inquiries or information referred to in Paragraph FC-1.3.1 include:

        (a) Obtaining additional information on the customer (e.g. occupation, volume of assets, information available through public databases, internet, etc.), and updating more regularly the identification data of customer and beneficial owner;
        (b) Obtaining additional information on the intended nature of the business relationship;
        (c) Obtaining information on the source of funds or source of wealth of the customer;
        (d) Obtaining information on the reasons for intended or performed transactions;
        (e) Obtaining the approval of senior management to commence or continue the business relationship;
        (f) Conducting enhanced monitoring of the business relationship, by increasing the number and timing of controls applied, and selecting patterns of transactions that need further examination;
        (g) Taking specific measures to identify the source of the first payment in this account and applying RBA to ensure that there is a plausible explanation in any case where the first payment was not received from the same customer’s account;
        (h) Obtaining evidence of a person's permanent address through the use of a credit reference agency search, or through independent governmental database or by home visit;
        (i) Obtaining a personal reference (e.g. by an existing customer of the insurance licensee);
        (j) Obtaining another licensed entity’s reference and contact with the concerned licensee regarding the customer;
        (k) Obtaining documentation outlining the customer’s source of wealth;
        (l) Obtaining additional documentation outlining the customer’s source of income; and
        (m) Obtaining additional independent verification of employment or public position held.
        Amended: January 2022
        Amended: January 2007

      • FC-1.3.3

        In addition to the general Rule contained in Paragraph FC-1.3.1 above, special care is required in the circumstances specified in Sections FC-1.4 to FC-1.5 inclusive.

        Amended: January 2007

    • FC-1.4 FC-1.4 Enhanced Customer Due Diligence: Non face-to-face Business and New Technologies

      • FC-1.4.1

        Insurance licensees must establish specific procedures for verifying customer identity where no face-to-face contact takes place.

        Amended: January 2007

      • FC-1.4.2

        Where no face-to-face contact takes place, insurance licensees must take additional measures (to those specified in Section FC-1.2), in order to mitigate the potentially higher risk associated with such business. In particular, insurance licensees must take measures:

        (a) To ensure that the customer is the person they claim to be; and
        (b) To ensure that the address provided is genuinely the customer's.
        Amended: January 2007

      • FC-1.4.3

        There are a number of checks that can provide an insurance licensee with a reasonable degree of assurance as to the authenticity of the applicant. They include:

        (a) Telephone contact with the applicant on an independently verified home or business number;
        (b) With the customer’s consent, contacting an employer to confirm employment, via phone through a listed number or in writing;
        (c) Requiring a premium payment to be made from an account in the customer’s name at a bank having equivalent CDD standards;
        (d) Independent verification of employment (e.g. through the use of a national E-KYC application, or public position held;
        (e) Carrying out additional searches (e.g. internet searches using independent and open sources) to better inform the customer risk profile;
        (f) Carrying out additional searches focused on financial crime risk indicator (i.e. negative news);
        (g) Evaluating the information provided with regard to the destination of fund and the reasons for the transaction;
        (h) Seeking and verifying additional information from the customer about the purpose and intended nature of the transaction or the business relationship; and
        (i) Increasing the frequency and intensity of transaction monitoring.
        Amended: January 2022
        Amended: January 2007

      • FC-1.4.4

        Financial services provided using digital channels or internet pose greater challenges for customer identification and AML/CFT purposes. Insurance licensees must identify and assess the money laundering or terrorist financing risks relevant to any new technology or channel and establish procedures to prevent the misuse of technological developments in money laundering or terrorist financing schemes. The risk assessments must be consistent with the requirements in Section FC-C.2.

        Amended: January 2022
        Amended: January 2007

      • FC-1.4.5

        Insurance licensees must identify and assess the money laundering or terrorist financing risks that may arise in relation to:

        (a) The development of new products and new business practices, including new delivery mechanisms; and
        (b) The use of new or developing technologies for both new and pre-existing products.
        Added: October 2015

      • FC-1.4.6

        For purposes of Paragraph FC-1.4.5, such a risk assessment consistent with the requirements in Section FC-C.2 and must take place prior to the launch of the new products, business practices or the use of new or developing technologies. Insurance licensees must take appropriate measures to manage and mitigate those risks.

        Amended: January 2022
        Added: October 2015

      • Enhanced Monitoring

        • FC-1.4.7

          Customers onboarded digitally must be subject to enhanced on-going account monitoring measures.

          Added: January 2022

        • FC-1.4.8

          The CBB may require a licensee to share the details of the enhanced monitoring and the on-going monitoring process for non face-to-face customer relationships.

          Added: January 2022

      • Licensee’s digital ID applications

        • FC-1.4.9

          Insurance licensees may use its digital ID applications that use secure audio-visual real time (live video conferencing/live photo selfies) communication means to identify the natural person.

          Added: January 2022

        • FC-1.4.10

          Insurance licensees must maintain a document available upon request for the use of its digital ID applications that includes all the following information:

          (a) A description of the nature of products and services for which the proprietary digital ID application is planned to be used with specific references to the rules in this Module for which it will be used;
          (b) A description of the systems and IT infrastructure that are planned to be used;
          (c) A description of the technology and applications that have the features for facial recognition or biometric recognition to authenticate independently and match the face and the customer identification information available with the licensee. The process and the features used in conjunction with video conferencing include, among others, face recognition, three-dimensional face matching techniques etc;
          (d) “Liveness” checks created in the course of the identification process;
          (e) A description of the governance arrangements related to this activity including the availability of specially trained personnel with sufficient level of seniority; and
          (f) Record keeping arrangements for electronic records to be maintained and the relative audit.
          Added: January 2022

        • FC-1.4.11

          Insurance licensees that intend to use its digital ID application to identify the customer and verify identity information must meet the following additional requirements:

          (a) The digital ID application must make use of secure audio visual real time (live video conferencing /live photo selfies) technology to (i) identify the customer, (ii) verify his/her identity, and also (iii) ensure the data and documents provided are authentic;
          (b) The picture/sound quality must be adequate to facilitate unambiguous identification;
          (c) The digital ID application must include or be combined with capability to read and decrypt the information stored in the identification document’s machine readable zone (MRZ) for authenticity checks from independent and reliable sources;
          (d) Where the MRZ reader is with an outsourced provider, the licensee must ensure that such party is authorized to carry out such services and the information is current and up to date and readily available such that the licensee can check that the decrypted information matches the other information in the identification document;
          (e) The digital ID application has the features for allowing facial recognition or biometric recognition that can authenticate and match the face and the customer identification documents independently;
          (f) The digital ID solution has been tested by an independent expert covering the governance and control processes to ensure the integrity of the solution and underlying methodologies, technology and processes and risk mitigation. The report of the expert’s findings must be retained and available upon request;
          (g) The digital ID application must enable an ongoing process of retrieving and updating the digital files, identity attributes, or data fields which are subject to documented access rights and authorities for updating and changes; and
          (h) The digital ID application must have the geo-location features which must be used by the licensee to ensure that it is able to identify any suspicious locations and to make additional inquiries if the location from which a customer is completing the onboarding process does not match the location of the customer based on the information and documentation submitted.
          Added: January 2022

        • FC-1.4.12

          Insurance licensees using its digital ID application must establish and implement an approved policy which lays down the governance, control mechanisms, systems and procedures for the CDD which include:

          (a) A description of the nature of products and services for which customer due diligence may be conducted through video conferencing or equivalent electronic means;
          (b) A description of the systems, controls and IT infrastructure planned to be used;
          (c) Governance mechanism related to this activity;
          (d) Specially trained personnel with sufficient level of seniority; and
          (e) Record keeping arrangements for electronic records to be maintained and the relative audit trail.
          Added: January 2022

        • FC-1.4.13

          Insurance licensees must ensure that the information referred to in Paragraph FC-1.2.1 is collected in adherence to privacy laws and other applicable laws of the country of residence of the customer.

          Added: January 2022

        • FC-1.4.14

          Insurance licensees must ensure that the information referred to in Subparagraphs FC-1.2.1 (a) to (f) is obtained prior to commencing the digital verification such that:

          (a) The licensee can perform its due diligence prior to the digital interaction/communication and can raise targeted questions at such interaction/communication session; and
          (b) The licensee can verify the authenticity, validity and accuracy of such information through digital means (See Paragraph FC.1.4.16 below) or by use of the methods mentioned in Paragraph FC-1.2.3 and /or FC-1.4.3 as appropriate.
          Added: January 2022

        • FC-1.4.15

          The licensee must also obtain the customer’s explicit consent to record the session and capture images as may be needed.

          Added: January 2022

        • FC-1.4.16

          Insurance licensees must verify the information in Paragraph FC-1.2.1 (a) to (f) by the following methods below:

          (a) Confirmation of the date of birth and legal name by digital reading and authenticating current valid passport or other official original identification using machine readable zone (MRZ) or other technology which has been approved under paragraph FC-1.4.9, unless the information was verified using national E-KYC application;
          (b) Performing real time video calls with the applicant to identify the person and match the person’s face and /other features through facial recognition or bio-metric means with the office documentation, (e.g. passport, CPR);
          (c) Matching the official identification document, (e.g. passport, CPR) and related information provided with the document captured/displayed on the live video call; and
          (d) Confirmation of the permanent residential address by, unless the information was verified using national E-KYC application capturing live, the recent utility bill, bank statement or similar statement from another licensee or financial institution, or some form of official correspondence or official documentation card, such as national identity card or CPR, from a public/governmental authority, or a tenancy agreement or record of home visit by an official of the insurance licensee.
          Added: January 2022

        • FC-1.4.17

          For the purposes of Paragraph FC-1.4.16, actions taken for obtaining and verifying customer identity could include:

          (a) Collection: Present and collect identity attributes and evidence, either in person and/or online (e.g., by filling out an online form, sending a selfie photo, uploading photos of documents such as passport or driver’s license, etc.);
          (b) Certification: Digital or physical inspection to ensure the document is authentic and its data or information is accurate (for example, checking physical security features, expiration dates, and verifying attributes via other services);
          (c) De-duplication: Establish that the identity attributes and evidence relate to a unique person in the ID system (e.g., via duplicate record searches, biometric recognition and/or deduplication algorithms);
          (d) Verification: Link the individual to the identity evidence provided (e.g., using biometric solutions like facial recognition and liveness detection); and
          (e) Enrolment in identity account and binding: Create the identity account and issue and link one or more authenticators with the identity account (e.g., passwords, one-time code (OTC) generator on a smartphone, etc.). This process enables authentication.
          Added: January 2022

        • FC-1.4.18

          Not all elements of a digital ID system are necessarily digital. Some elements of identity proofing and enrolment can be either digital or physical (documentary), or a combination, but binding and authentication must be digital.

          Added: January 2022

        • FC-1.4.19

          Sufficient controls must be put in place to safeguard the data relating to customer information collected through the video conference and due regard must be paid to the requirements of the Personal Data Protection Law (PDPL). Additionally, controls must be put in place to minimize the increased impersonation fraud risk in such non face-to-face relationship where there is a chance that customer may not be who he claims he is.

          Added: January 2022

      • Overseas branches

        • FC-1.4.20

          Where insurance licensees intend to use a digital ID application in a foreign jurisdiction in which it operates, it must ensure that the digital ID application meets with the requirements under Paragraph FC-B.3.1.

          Added: January 2022

    • FC-1.5 FC-1.5 Enhanced Customer Due Diligence: Politically Exposed Persons ('PEPs')

      • FC-1.5.1

        Insurance licensees must have appropriate risk management systems to determine whether a customer or beneficial owner is a Politically Exposed Person ('PEP'), both at the time of establishing business relations and thereafter on a periodic basis. Licensees must utilise publicly available databases and information to establish whether a customer is a PEP.

        Amended: July 2016
        Amended: October 2015
        Amended: January 2007
        Amended: October 2007

      • FC-1.5.2

        Insurance licensees must establish a client acceptance policy with regard to PEPs, taking into account the reputational and other risks involved. Senior management approval must be obtained before a PEP is accepted as a customer. Licensees must not accept a non-Bahraini PEP as a customer based on customer due diligence undertaken using digital ID applications.

        Amended: January 2022
        Amended: January 2007

      • FC-1.5.3

        Where an existing customer is a PEP, or subsequently becomes a PEP, enhanced monitoring and customer due diligence measures must include:

        (a) Analysis of complex financial structures, including trusts, foundations or international business corporations;
        (b) A written record in the customer file to establish that reasonable measures have been taken to establish both the source of wealth and the source of funds;
        (c) Development of a profile of anticipated customer activity, to be used in on-going monitoring;
        (d) Approval of senior management for allowing the customer relationship to continue; and
        (e) On-going account monitoring of the PEP's account by senior management (such as the MLRO).
        Amended: January 2007

      • FC-1.5.3A

        In cases of higher risk business relationships with such persons, mentioned in Paragraph FC-1.5.1, insurance licensees must apply the measures referred to in Subparagraphs FC-1.5.3 (b), (d) and (e).

        Added: October 2015

      • FC-1.5.3B

        The requirements for all types of PEP must also apply to family or close associates of such PEPs.

        Added: October 2015

      • FC-1.5.3C

        For the purpose of Paragraph FC-1.5.3B, 'family' means spouse, father, mother, sons, daughters, sisters and brothers. 'Associates' are persons associated with a PEP whether such association is due to the person being an employee or partner of the PEP or of a firm represented or owned by the PEP, or family links or otherwise.

        Added: October 2015

      • FC-1.5.4

        [This Paragraph was deleted in July 2016 as definition is included under Part B in the Glossary.]

        Deleted: July 2016
        Amended: October 2015
        Amended: January 2007

      • FC-1.5.5

        In relation to life insurance policies, insurance licensees must take reasonable measures to determine whether the beneficiaries and/or, where required, the beneficial owner of the beneficiary, are PEPs. This must occur, at the latest, at the time of the payout.

        Added: January 2018

      • FC-1.5.6

        Where higher risks are identified, senior management must be informed before the payout of the policy proceeds, in order to conduct enhanced scrutiny on the whole business relationship with the policyholder, and to consider making a suspicious transaction report.

        Added: January 2018

    • FC-1.5A FC-1.5A Enhanced Due Diligence: Charities, Clubs and Other Societies

      • FC-1.5A.1

        Financial services must not be provided to charitable funds and religious, sporting, social, cooperative and professional and other societies, until an original certificate authenticated by the relevant Ministry confirming the identities of those purporting to act on their behalf (and authorising them to obtain the said service) has been obtained. Charities should be subject to enhanced monitoring by insurance licensees.

        Added: January 2022

      • FC-1.5A.2

        For the purpose of Paragraph FC-1.5A.1, for clubs and societies registered with the Ministry of Youth and Sport Affairs, insurance licensees must contact the Ministry to clarify whether a policy may be issued in accordance with the rules of the Ministry. In addition, in the case of sport associations registered with the Bahrain Olympic Committee (BOC), insurance licensees must contact BOC to clarify whether the policy may be issued in accordance with the rules of BOC.

        Added: January 2022

    • FC-1.6 FC-1.6 Simplified Customer Due Diligence

      • FC-1.6.1

        Insurance licensees may apply simplified customer due diligence measures, as described in Paragraphs FC-1.6.2 to FC-1.6.8, if:

        (a) The customer is the Central Bank of Bahrain ('CBB'), the Bahrain Bourse ('BHB') or a licensee of the CBB;
        (b) The customer is a Ministry of a Gulf Cooperation Council ('GCC') or Financial Action Task Force ('FATF') member state government, a company in which a GCC government is a majority shareholder, or a company established by decree in the GCC;
        (c) The customer is a company listed on a GCC or FATF member state stock exchange with equivalent disclosure standards to those of the BHB;
        (d) The customer is a financial institution whose entire operations are subject to AML/CFT requirements consistent with the FATF Recommendations and it is supervised by a financial services supervisor in a FATF or GCC member state for compliance with those requirements;
        (e) The customer is a financial institution that is a subsidiary of a financial institution located in a FATF or GCC member state, and the AML/CFT requirements applied to its parent also apply to the subsidiary; or
        (f) [This Subparagraph was deleted in January 2018].
        (g) The transaction is a long-term insurance contract, either taken out in connection with a pension scheme relating to the customer's employment or occupation, or contains a no surrender clause and cannot be used as security for a loan.
        Amended: January 2019
        Amended: January 2018
        Amended: October 2015
        Amended: January 2007

      • FC-1.6.2

        For customers falling under the categories (a) to (e) specified in Paragraph FC-1.6.1, the information required under Paragraph FC-1.2.1 (for natural persons) or FC-1.2.7 (for legal entities or legal arrangements such as trusts) must be obtained. However, the verification and certification requirements in Paragraphs FC-1.2.3 and FC-1.2.8, and the due diligence requirements in Paragraph FC-1.2.11, may be dispensed with.

        Amended: January 2007

      • FC-1.6.3

        [This Paragraph was deleted in July 2018].

        Deleted: July 2018
        Amended: January 2007

      • FC-1.6.4

        Insurance licensees wishing to apply simplified due diligence measures as allowed for under Paragraph FC-1.6.1 must retain documentary evidence supporting their categorisation of the customer.

        Amended: January 2007

      • FC-1.6.5

        Examples of such documentary evidence may include a printout from a regulator's website, confirming the licensed status of an institution, and internal papers attesting to a review of the AML/CFT measures applied in a jurisdiction.

      • FC-1.6.6

        For customers coming under Paragraph FC-1.6.1 (e), licensees must also obtain and retain a written statement from the parent institution of the subsidiary concerned, confirming that the subsidiary is subject to the same AML/CFT measures as its parent.

        Amended: January 2007

      • FC-1.6.7

        [This Paragraph was deleted in January 2007]

        Deleted: January 2007

      • FC-1.6.8

        Simplified customer due diligence measures must not be applied where a licensee knows, suspects, or has reason to suspect, that the applicant is engaged in money laundering or terrorism financing or that the transaction is carried out on behalf of another person engaged in money laundering or terrorism financing.

      • FC-1.6.8A

        Simplified customer due diligence measures must not be applied in situations where the licensee has identified high ML/TF/PF risks.

        Added: January 2022

      • FC-1.6.9

        [This Paragraph was deleted in July 2018].

        Deleted: July 2018

      • FC-1.6.10

        [This Paragraph was deleted in July 2018].

        Deleted: July 2018
        Amended: January 2007

    • FC-1.7 FC-1.7 Introduced Business from Professional Intermediaries

      • FC-1.7.1

        Insurance licensees may only accept customers introduced to them by other financial institutions or intermediaries, if they have satisfied themselves that the financial institution or intermediary concerned is subject to FATF-equivalent measures and customer due diligence measures. Where an insurance licensee delegates part of the customer due diligence measures to another financial institution or intermediary, the responsibility for meeting the requirements of this Chapter remains with the insurance licensee, not the third party.

        Amended: January 2018
        Amended: January 2007

      • FC-1.7.2

        Insurance licensees may only accept introduced business if all of the following conditions are satisfied:

        (a) The customer due diligence measures applied by the introducer are consistent with those required by the FATF Recommendations;
        (b) A formal agreement is in place defining the respective roles of the licensee and the introducer in relation to customer due diligence measures. The agreement must specify that the customer due diligence measures of the introducer will comply with the FATF Recommendations;
        (c) The introducer is able to provide all relevant data pertaining to the customer's identity, the identity of the policyholder and beneficiary of the policy and, where applicable, the party/parties on whose behalf the customer is acting; also, the introducer has confirmed that the licensee will be allowed to verify the customer due diligence measures undertaken by the introducer at any stage; and
        (d) Written confirmation is provided by the introducer confirming that all customer due diligence measures required by the FATF Recommendations have been followed and the customer's identity established and verified. In addition, the confirmation must state that any identification documents or other customer due diligence material can be accessed by the insurance licensee and that these documents will be kept for at least five years after the policy relationship has ended.
        Amended: October 2015
        Amended: January 2007
        Amended: October 2007
        Amended: April 2008

      • FC-1.7.3

        The insurance licensee must perform periodic reviews ensuring that any introducer on which it relies is in compliance with the FATF Recommendations. Where the introducer is resident in another jurisdiction, the insurance licensee must also require the introducer to perform periodic reviews to verify whether the jurisdiction is in compliance with the FATF Recommendations.

        Amended: October 2015

      • FC-1.7.4

        Should the insurance licensee not be satisfied that the introducer is in compliance with the requirements of the FATF Recommendations, the licensee must conduct its own customer due diligence or not accept or continue the business relationship.

        Amended: October 2015

    • FC-1.8 Reliance on Third Parties for Customer Due Diligence

      • FC-1.8.1

        Licensees are permitted to rely on third parties to perform elements of CDD measures and recordkeeping requirements stipulated in Chapter FC-1 related to customer and beneficial owner identity, verification of their identity and information on the purpose and intended nature of the business relationship with the licensee, subject to complying with the below:

        (a) Licensees remain ultimately responsible for CDD measures;
        (b) Licensees immediately obtain the relevant CDD information from the third party upon onboarding clients;
        (c) There is an agreement with the third party for the arrangement with clear contractual terms on the obligations of the third party;
        (d) The third party without delay makes available the relevant documentation relating to the CDD requirements upon request;
        (e) Licensees ensure that the third party is a financial institution that is regulated and supervised for, and has measures in place for compliance with, CDD and recordkeeping requirements in line with FATF Recommendations 10 and 11; and
        (f) For third parties based abroad, licensees must consider the information available on the level of country risk.
        Added: October 2023

      • FC-1.8.2

        Where a licensee relies on a third-party that is part of the same financial group, the licensee can consider that:

        (a) The requirements under Subparagraphs FC-1.8.1 (d) and (e) are complied with through its group programme, provided the group satisfies the following conditions:
        (i) The group applies CDD and record keeping requirements consistent with FATF Recommendations 10, 11 and 12 and has in place internal controls in accordance with FATF Recommendation 18; and
        (ii) The implementation of CDD, record keeping and AML/CFT measures are supervised at a group level by a financial services regulatory authority for compliance with AML/CFT requirements consistent with standards set by the FATF.
        (b) The requirement under Subparagraph FC-1.8.1 (f) is complied with if the country risk is adequately mitigated by the group’s AML/CFT policies.
        Added: October 2023

      • FC-1.8.3

        This Section does not apply to outsourcing or agency arrangements in which the outsourced entity applies the CDD measures on behalf of the delegating licensee, in accordance with its procedures.

        Added: October 2023