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  • CI-2.1 CI-2.1 Authorisation

    • CI-2.1.1

      An entity in Bahrain must be authorised if it wishes to conduct regulated insurance services, including effecting insurance contracts, the broking of insurance contracts, the offering of advice to third parties and the provision of insurance management services. Insurance firms must restrict their business to insurance under their memorandum and articles of association.

      Rulebook Reference AU-A.1.2
      Amended: January 2007
      Amended: October 2007

    • CI-2.1.2

      An insurance firm's license will state the classes of insurance that the firm is authorised to conduct. In recognition that thepolicyholders of captive insurers are limited to their owners (or shareholders), captive insurers may be licensed to underwrite either general insurance business or long-term insurance business, or both. In the latter case, however, they are required to maintain separate funds for general and long term insurance business and to apply the appropriate capital requirements to each fund.

      Rulebook Reference AU-1.1.14

      Amended: January 2007
      Amended: October 2007

    • CI-2.1.3

      For captive insurers, the legal status of an insurance firm must be:

      (i) A Bahraini special purpose vehicle (SPV), specifically established to carry out the activities of a captive insurer;
      (ii) A Bahraini joint stock company (BSC); or
      (iii) A branch resident in Bahrain of a company incorporated under the laws of its territory of incorporation and (where local regulation so requires) authorised as an insurance or reinsurance firm in that territory.
      Rulebook Reference AU-2.1.2
      Amended: January 2007
      Amended: October 2007

    • CI-2.1.4

      Subject to CBB approval, an insurance licensee that is a captive (re-) insurance company may maintain its Head Office or place of business at the offices of the insurance manager appointed to manage its affairs.

      Rulebook Reference AU-2.2.4
      Amended: January 2007

    • CI-2.1.5

      A firm that is authorised as a captive insurance firm will have one of the following permissions granted by the CBB:

      Category C1 — a Bahrain authorised insurer whose business is restricted to insuring only the insurance risks (other than liability risks) of its shareholder(s) or those of subsidiary or associated companies of its shareholder(s); or

      Category C2 — A Bahrain authorised insurer whose business is restricted to insuring only the risks of its shareholder(s) or of subsidiary or associated companies of its shareholder(s), and whose business may include liability risks, subject to the CBB being satisfied that the activity, capital structure and management provide sufficient protection to potential third party claimants.

      Some examples of business models that could qualify for captive licensing include:

      (a) A group of businesses or professional firms insuring similar risks (who would, effectively, pool these risks through a captive);
      (b) A car hire firm insuring collision damage risk, where the premium is paid by the hire firm. (Where the premium is paid by the hirer, an application for a conventional firm, not a captive, must be made.); and
      (c) A firm, or group of firms insuring professional indemnity risks (in which case the captive would be classed as C2 and the business includes liability risks).
      Rulebook Reference Glossary of terms

    • CI-2.1.6

      A captive insurance firm may be licensed to write either insurance and reinsurance business or may restrict its business to reinsurance only.

      Amended: January 2007

    • CI-2.1.7

      A captive insurer may also be licensed either as a takaful firm (in which case it will appoint a Shari'a Supervisory Board and will operate in accordance with the principles of the Shari'a). For further details please refer to the Module TA (Takaful).

      Rulebook Reference Module TA
      Amended: January 2007