BR-2.2.1

An insurance licensee must provide written notification to the CBB immediately it becomes aware, or has information which reasonably suggests, that any of the following has occurred, may have occurred or may occur in the foreseeable future:

BR-2.2.2

The circumstances that may give rise to any of the events in Paragraph BR-2.2.1 are wide-ranging and the probability of any matter resulting in such an outcome, and the severity of the outcome, may be difficult to determine. However, the CBB expects insurance licensees to consider properly all potential consequences of events.

BR-2.2.3

In determining whether an event that may occur in the foreseeable future should be notified to the CBB, an insurance licensee should consider both the probability of the event happening and the severity of the outcome should it happen. Matters having a supervisory impact could also include matters relating to a parent undertaking or controller that may indirectly have an effect on the insurance licensee.

BR-2.2.4

An insurance licensee must notify the CBB of:

BR-2.2.5

An insurance licensee must make the notification in Paragraph BR-2.2.4 immediately it becomes aware, or has information which reasonably suggests, that any of the matters in Paragraph BR-2.2.4 has occurred, may have occurred or may occur in the foreseeable future (refer also to Paragraph EN-8.2.3).

BR-2.2.6

An insurance licensee must notify the CBB immediately of any legal, professional or administrative or other proceedings instituted against the insurance licensee, controller or a close link including a parent undertaking of the insurance licensee that is known to the insurance licensee and is significant in relation to the insurance licensee's financial resources or its reputation.

BR-2.2.7

The requirement imposed on insurance licensees under Paragraph BR-2.2.6 applies whether the event relates to a matter that has occurred in Bahrain or in any other jurisdiction.

BR-2.2.8

An insurance licensee must notify the CBB immediately if one of the following events arises and the event is significant:

BR-2.2.9

For the purposes of this Chapter, in determining whether a matter is significant, an insurance licensee should have regard to:

BR-2.2.10

In addition, if the insurance licensee may have suffered significant financial losses as a result of the incident, or may suffer reputational loss, the CBB will wish to consider this and whether the incident suggests weaknesses in the insurance licensee's internal controls.

BR-2.2.11

Except in instances where the CBB has initiated the following actions, an insurance licensee must notify the CBB immediately of any of the following events:

BR-2.2.12

An insurance licensee must notify the CBB immediately if it becomes subject to or ceases to be subject to the supervision of any overseas supervisor (including a home supervisor).

BR-2.2.13

The supervisory regime and any legislative or foreign provisions to which the insurance licensee, including its branches, is subject, influence the CBB's approach to the supervision of the insurance licensee.

BR-2.2.13A

If, as a result of circumstances outside the Bahraini insurance licensee's knowledge and/or control, one of the changes to their controllers specified in Paragraph GR-5.1.1 is triggered prior to CBB approval being sought or obtained, the Bahraini insurance licensee must notify the CBB as soon as it becomes aware of the fact and no later than 15 calendar days after the change occurs (ref. GR-5.1.5).

BR-2.2.13B

Overseas insurance licensees must notify the CBB of any new significant ownership in excess of 50% of the issued and paid up capital of the concerned licensee's direct parent undertaking as soon as the licensee becomes aware of the change (see Paragraph GR-5.5.1).

BR-2.2.14

An insurance licensee must notify the CBB of the following:

BR-2.3.1

In accordance with Paragraph GR-2.1.1, an insurance licensee must seek prior written approval from the CBB and give reasonable advance notice of a change in:

BR-2.3.2

A notification under Paragraph BR-2.3.1 must include the details of the proposed new name and the date on which the insurance licensee intends to implement the change of name.

BR-2.3.3

An insurance licensee must seek approval from the CBB and give reasonable advance notice of a change in any of the following addresses:

BR-2.3.4

A notification under Paragraph BR-2.3.3 must include the details of the proposed new address and the date on which the insurance licensee intends to implement the change of address.

BR-2.3.5

An insurance licensee must seek CBB approval and give reasonable advance notice of a change in its legal status that may, in any way, affect its relationship with or limit its liability to its policyholders or customers.

BR-2.3.6

In accordance with Chapter GR-4, an insurance licensee must seek prior written approval from the CBB before transferring to a third party all or a significant portion of all its rights and obligations under contracts of insurance that it has underwritten or provided to policyholders.

BR-2.3.7

In accordance with Section GR-5.1, a Bahraini insurance licensee must seek CBB approval and give reasonable advance notice of any of the following events concerning the insurance licensee:

BR-2.3.8

As part of the CBB's function of monitoring an insurance licensee's continuing satisfaction of the Principles of Business, the CBB needs to consider the impact of any significant change in the circumstances of one or more of its controllers, for example: changes in their financial standing; changes in respect of their corporate controllers; and changes in their governing bodies. Consequently, the CBB needs to know if there are any such changes.

BR-2.3.9

Every insurance licensee authorised in Bahrain is required to submit an annual report on its controllers, as per Paragraph GR-5.1.7 and GR-5.5.3, and close links as set out in Paragraph GR-6.1.3.

BR-2.3.10

An overseas insurance licensee must seek CBB approval and give reasonable advance notice of any of the following events concerning the overseas insurance licensee:

BR-2.3.11

If there is uncertainty whether a particular relationship constitutes control, it may be appropriate for the insurance licensee or controller or proposed controller to ask the CBB for guidance and to obtain its own legal advice.

BR-2.3.12

In accordance with Paragraph GR-6.1.3, an insurance licensee must submit within 3 months of its financial year end, a report on its close links. This report must identify all undertakings closely linked to the licensee, as defined in Section GR-6.2. In addition, where at any time requested by the CBB, insurance licensees must provide information on undertakings with which they are closely linked.

BR-2.3.13

Insurance licensees must satisfy the requirements of Paragraph GR-6.1.3 by submitting a corporate structure chart, identifying all undertakings closely linked to the licensee.

BR-2.3.14

An insurance licensee must seek CBB approval and give three months notice of its intention to undertake insurance business in a jurisdiction other than Bahrain, or in the case of an overseas company licensed in Bahrain, a jurisdiction other than Bahrain and its country of incorporation or establishment, prior to commencing that business and where the effect of commencing that business may have a significant impact on:

This requirement applies whether or not the insurance licensee is required to be regulated locally in the jurisdiction where it proposes to undertake insurance business.

BR-2.3.15

In the case of an insurance licensee incorporated in Bahrain, the CBB will use this information to consider whether or not it should object to or impose additional requirements on the licensee. In the case of an overseas insurance licensee, the CBB would normally expect that were such action deemed necessary that it would be taken by the company's home supervisor and not the CBB.

BR-2.3.16

Insurance licensees are reminded that with limited exceptions (refer Section AU-1.1.10) that an insurance licensee must not carry on any commercial business in the Kingdom of Bahrain or elsewhere other than insurance business and activities directly arising from or incidental to that business. In instances where an insurance licensee carries on a commercial business, at the time where the Insurance Rulebook becomes effective, the insurance licensee must notify the CBB to establish the transitional rules in relation to this prohibited activity.

BR-2.3.17

An insurance licensee incorporated in Bahrain must seek CBB approval and give reasonable advance notice of its intention to:

BR-2.3.18

Bahraini Insurance licensees will in addition to this approval requirement need to consider the implications of a merger, acquisition, disposal or establishment of a new subsidiary undertaking in the context of the controllers and close links Rules set out in Module GR. Where an insurance licensee proposes to enter into a merger, the CBB would ordinarily expect to be notified in the context of the controller notification requirements set out in Module GR and Paragraph BR-2.3.17.

BR-2.3.19

Overseas insurance licensees, whilst not having to give advance notice of a proposed merger with another undertaking, a proposed acquisition, disposal or establishment of a new subsidiary undertaking under Paragraph BR-2.3.17, will still need to consider the implications of such transactions in the context of the controllers and close links rules set out in Module GR. Where an overseas insurance licensee proposes to enter into a merger, the CBB would ordinarily expect to be notified in the context of the controller notification requirements set out in Module GR and Paragraph BR-2.3.16.

BR-2.3.20

An insurance licensee must seek prior approval from the CBB of its intention to carry on its business from new or additional premises in Bahrain. This requirement applies whether or not the premises are to be used for the purposes of transacting business with policyholders or customers, administration of the business or as the head office in Bahrain of the insurance licensee.

BR-2.3.21

Insurance licensees are not required to notify the CBB of premises where business on behalf of the insurance licensee is carried out by appointed representatives of the insurance licensee. However, the CBB expects the insurance licensee to maintain a record of all such premises and to be able to produce that record should it be requested by the CBB.

BR-2.3.22

An insurance firm that is not a captive insurer must obtain the prior approval of the CBB of any proposed transaction with a related party (a related party transaction) where the fair value of that related party transaction exceeds 10 per cent, or where several smaller transactions that appear to be linked fall above this threshold, of the insurance firm's capital available, as defined in Paragraph CA-1.2.21.

BR-2.3.23

In the case of insurance contracts, for purposes of Paragraph BR-2.3.22, prior approval of the CBB is required where the sum insured under the insurance contract exceeds 10 per cent of the insurance firm's capital available.

BR-2.3.24

For the purposes of this Section, 'fair value' is the market value being the amount that would be paid or received in a transaction between a willing buyer and a willing seller that are themselves not related parties.

BR-2.3.25

The only exceptions to Paragraph BR-2.3.22 are:

BR-2.3.26

For the purpose of this Section, a related party of an insurance firm includes:

BR-2.3.27

For the purposes of this Section, a related party transaction means the transfer of assets or liabilities or the performance of services by, to or for a related party irrespective of whether a price is charged.

BR-2.3.28

For purposes of Paragraph BR-2.3.26, insurance firms should note the use of "includes" in the definition of related party. The CBB is of the view that whilst the definition should be sufficient to identify most related parties there may be individual circumstances were a related party exists that is not explicitly within the definition. Accordingly where an insurance firm is in any doubt as to whether or not a party is a related party they should notify and seek the CBB's advice accordingly.

BR-2.3.29

An insurance licensee must seek prior approval from the CBB for the following:

BR-2.3.30

Before submitting a proposal for a distribution of profits (dividends) to a shareholder vote, an insurance licensee must obtain a letter of no objection from the CBB (ref: Paragraph GR-3.1.1).