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  • BR-2.2 BR-2.2 Notification Requirements

    • Matters Having a Serious Supervisory Impact

      • 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:

        (a) The insurance licensee failing to satisfy one or more of the Principles of Business referred to in Module PB;
        (b) Any matter which could have a significant adverse impact on the insurance licensee's reputation;
        (c) Any matter which could affect the insurance licensee's ability to continue to provide adequate services to its customers and which could result in serious detriment to a customer of the insurance licensee; or
        (d) Any matter in respect of the insurance licensee that could result in serious financial consequences to the financial system or to other insurance licensees.
        Amended: January 2007
        Amended: October 2007

      • 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.

        Amended: January 2007

      • 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.

        Amended: January 2007

    • Breaches of Rules and Other Requirements

      • BR-2.2.4

        An insurance licensee must notify the CBB of:

        (a) A significant breach of any provision of the Rulebook (including a Principle);
        (b) A breach of any requirement imposed by the relevant law or by Regulations or an order made under any relevant law by the CBB; or
        (c) The bringing of a prosecution for, or conviction of, any offence under any relevant law against the insurance licensee that would prevent the insurance licensee from meeting the Principles or Business (Module PB) or any of its Directors, officers, approved persons, or appointed representatives from meeting the fit and proper requirements of Module AU.
        Amended: January 2007
        Amended: October 2007

      • 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).

        Amended: January 2007

    • Legal, Professional, Administrative or other Proceedings Against an Insurance Licensee

      • 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.

        Amended: January 2007

      • 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.

    • Fraud, Errors and other Irregularities

      • BR-2.2.8

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

        (a) It becomes aware that an employee may have committed a fraud against one of its customers;
        (b) It becomes aware that a person, whether or not employed by it, is acting with intent to commit fraud against it;
        (c) It identifies irregularities in its accounting or other records, whether or not there is evidence of fraud;
        (d) It suspects that one of its employees may be guilty of serious misconduct concerning his honesty or integrity and which is connected with the insurance licensee's regulated or ancillary activities; or
        (e) Conflicts of interest.
        Amended: April 2010
        Amended: October 2007
        Amended: January 2007

    • Meaning of the term '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:

        (a) The size of any monetary loss or potential monetary loss to itself or its customers (either in terms of a single incident or group of similar or related incidents);
        (b) The risk of reputational loss to the insurance licensee; and
        (c) Whether the incident or a pattern of incidents reflects weaknesses in the insurance licensee's internal controls.
        Amended: January 2007
        Amended: October 2007

      • 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.

        Amended: January 2007

    • Insolvency, Bankruptcy and Winding Up

      • 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:

        (a) The calling of a meeting to consider a resolution for winding up the insurance licensee, a controller or close link, including a parent undertaking of the insurance licensee;
        (b) An application to dissolve the insurance licensee, a controller or close link, including a parent undertaking of the insurance licensee or to strike the insurance licensee off the Register of Insurance Companies;
        (c) The presentation of a petition for the winding up of the insurance licensee, a controller or close link, including a parent undertaking of the insurance licensee;
        (d) The making of any proposals for the making of a composition or arrangement with any one or more of the insurance licensee's creditors;
        (e) An application for the appointment of an administrator or trustee in bankruptcy to the insurance licensee, a controller or close link, including a parent undertaking of the insurance licensee;
        (f) The appointment of a receiver to the insurance licensee, a controller or close link, including a parent undertaking of the insurance licensee (whether an administrative receiver or a receiver appointed over particular property); or
        (g) An application for an interim order against the insurance licensee, a controller or close link, including a parent undertaking of the insurance licensee under the Bankruptcy and Composition Law, Decree Law No (11), 1987 or similar legislation in another jurisdiction.
        Amended: April 2010
        Amended: January 2007

    • Other Supervisors

      • 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).

        Amended: January 2007

      • 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.

        Amended: January 2007
        Amended: October 2007

      • 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).

        Added: October 2015

      • 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).

        Added: October 2015

    • Other Notifications

      • BR-2.2.14

        An insurance licensee must notify the CBB of the following:

        (a) Removal or resignation of auditors (ref. AA-1.2.1);
        (b) Change in audit partner (ref. AA-1.3.2);
        (c) Removal or resignation of the actuary (ref. AA-4.4.1).
        (d) Appointment of appointed representatives, variations in terms of appointment and cancellations of appointment (ref. GR-9.1.13); and
        (e) Reinsurance exposure in excess of 25% limit (ref. RM-2.1.7); and
        (f) When an approved person ceases to hold a controlled function (ref AU-5.2.6).
        Amended: January 2007
        Amended: October 2007
        Amended: April 2009