CI-2.3.1

In accordance with Principle of Business 10, insurance licensees must put in place effective management, systems and controls for their business. The High-Level Controls Module sets out the Directives that put this principle into practice.

CI-2.3.2

Some of these Rules govern the establishment, composition, functions and responsibilities of Boards of Directors. All incorporated insurance licensees must have a Board that is ultimately accountable and responsible for the management and performance of the firm. Captive insurers are subject to various provisions relating to corporate governance contained in Legislative Decree No. 21 of 2001, with respect to promulgating the Commercial Companies Law ("Commercial Companies Law 2001"). In case of conflict, the Commercial Companies Law shall prevail.

CI-2.3.3

Responsibility for the day-to-day management of a captive insurer is vested in the Chief Executive Officer, which is a controlled function. Captive insurers, unlike other insurance licensees, are not required to consider the need to operate Committees.

CI-2.3.4

The CBB expects, for Bahraini insurance licensees, for Bahrain to be the principal place of business and for Bahrain to be the centre of its governance and management. In the case of a captive insurance firm, this must include:

In order to satisfy the second and third of these requirements, it is expected that most captive insurance companies will outsource their day-to-day operations to a firm licensed by the CBB to manage captives (insurance manager) although captives may use their own staff and premises. The appointment of an insurance manager must be approved by the CBB and should be in accordance with the outsourcing requirements of the Rulebook (refer to the Risk Management Section of this guide).

CI-2.3.5

As part of their management structure, captive insurance firms should include an internal auditor.

CI-2.3.6

An insurance manager must nominate a Compliance Officer, who must also be designated as the Compliance Officer for the managed firms. A self-managed captive insurer must also appoint a Compliance Officer, although this role may be combined with other functions.

CI-2.3.7

Chapters HC-10 contains additional guidance applicable to all captive insurance firms in respect of financial statements certification, appointment, training and evaluation of the Board, remuneration of approved persons, management structure, corporate ethics, communication between the Board and shareholders and corporate governance disclosure.