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  • Transactions with Related Parties

    • 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.

      Amended: January 2007
      Amended: October 2007

    • 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.

      Amended: January 2007

    • 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.

      Amended: January 2007
      Amended: October 2007

    • BR-2.3.25

      The only exceptions to Paragraph BR-2.3.22 are:

      (a) In the case of an overseas insurance firm, Paragraph BR-2.3.22 applies only in relation to transactions initiated or made on behalf of the overseas insurance firm or with an approved person of the overseas insurance firm; or
      (b) Where the related party transaction is one involving the effecting or carrying out of a contract of insurance and that transaction is on terms no more favourable than those that would apply were the transacting parties not related parties.
      Amended: January 2007
      Amended: October 2007

    • BR-2.3.26

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

      (a) A controller of the insurance firm as defined in Module GR;
      (b) A close link of the insurance firm as defined in Module GR;
      (c) An associate of a controller as defined in Module GR;
      (d) The extended family of a controller including a father, mother, father-in-law, mother-in-law, brother, sister, brother-in-law, sister-in-law, or grandparent; and
      (e) A corporate entity, whether or not licensed or incorporated in Bahrain, where any of the persons identified in Sub-Paragraphs (c) and (d) is a Director or would be considered a controller were the definition of controller set out in Paragraph GR-5.2.1 applied to that corporate entity.
      Amended: January 2007
      Amended: October 2007

    • 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.

      Amended: October 2007

    • 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.

      Amended: January 2007