Back Custom print Link Text Only Rich Text Print

  • CL-1 CL-1 Client Money Protection

    • CL-1.1 CL-1.1 Client Money Protection Rules

      • Keeping Separate Client Accounts

        • CL-1.1.1

          Where an insurance broker receives payment from a client, it must maintain one or more premiums/contributions account that holds client money separate from its own money.

          Amended: July 2023
          April 2012

        • CL-1.1.2

          Premiums/contributions collected in relation of a specific transaction must not be used to settle amounts due under another transaction.

          April 2012

        • CL-1.1.3

          Payment of premiums/contributions to insurance firms, or commissions (brokerage) to the insurance brokers' own accounts must not be effected until the premiums to which these payments relate have been duly received from that client and credited to the client account.

          Amended: July 2023
          April 2012

        • CL-1.1.4

          In respect of premiums/contributions booked in Bahrain in relation to residents and non-residents of Bahrain, these accounts are to be maintained with a retail bank licensed to do business in Bahrain.

          April 2012

        • CL-1.1.5

          Insurance brokers must:

          (a) Provide the CBB with a written confirmation from a retail bank(s) licensed to do business in Bahrain, as in what capacity they are holding such client money. This confirmation must be provided to the CBB at the time of opening the client money account and when there is a material change in the nature of the account; and
          (b) Instruct the bank(s) not to combine the client money account(s) with any other account or to exercise any right or set-off or counterclaim against money in that account in respect of any sum owed to it on any other account of the insurance broker.
          Amended: July 2023
          April 2012

        • CL-1.1.6

          [This Paragraph was deleted in July 2023].

          Deleted: July 2023
          April 2012

        • CL-1.1.7

          Client money must, upon receipt, be paid into a specifically designated client money account no later than the immediate business day after receipt. The monies in this account must form part of the fiduciary assets of the insurance broker and must be held in custody for the client, where the insurance broker acts as an agent with the client retaining full legal ownership of the funds.

          Amended: July 2023
          April 2012

        • CL-1.1.8

          The following guidance material provides examples of circumstances under which monies may be deposited into or withdrawn from a client account.

          April 2012

        • CL-1.1.9

          Amounts that may be deposited into a client account:

          (a) Monies received from the client for the purpose of purchasing contracts of insurance; and
          (b) Monies received on behalf of the client from (re)insurance firms, insurance intermediaries and any other third parties relating to the refund of premiums/contributions to clients.
          April 2012

        • CL-1.1.10

          Amounts that may be withdrawn from a client account:

          (a) Premium monies required to be paid on behalf of the client to (re)insurance firms or other insurance intermediaries for the purchase of contracts of insurance;
          (b) Monies drawn on a client's written authority in accordance with the insurance contract; or
          (c) Monies which may by mistake or accident have been paid into the account.
          April 2012

        • CL-1.1.11

          While the (re)insurance broker may assist a policyholder or insurance firm in the claims settlement process, funds related to claims settlement must be remitted directly by the (re)insurance firm to the policyholder or insurance firm.

          April 2012

        • CL-1.1.12

          Every insurance broker must maintain at least one income and expenses account with a retail bank licensed to do business in Bahrain.

          Amended: July 2023
          April 2012

        • CL-1.1.13

          Insurance brokers are prohibited from:

          (a) Combining income and expenses account(s) with premiums/contributions; and
          (b) Transferring income and expenses account(s) to premiums/contributions account(s).
          Amended: July 2023
          April 2012

    • CL-1.2 CL-1.2 Record Keeping

      • CL-1.2.1

        In accordance with Section GR-1.2, insurance brokers must ensure that proper records, sufficient to show and explain insurance brokers' transactions and commitments in respect of their client money, are maintained and demonstrate compliance with the provisions of this Module. These records must be retained for a period of a minimum of ten years after they are made, unless otherwise required by law.

        Amended: July 2023
        April 2012

      • CL-1.2.2

        An insurance broker that holds client money must:

        (a) Check its record-keeping and client money procedures regularly; and
        (b) Subject its record-keeping and client money procedures to an appropriate independent review (see Rule CL-1.3.3).
        Amended: July 2023
        April 2012

      • CL-1.2.3

        Records of the insurance broker must clearly show funds received and paid out allocated per client/transaction. For greater clarity, all client money and receivables from clients are to be shown on the balance sheet as fiduciary assets and there must be an offsetting fiduciary liability, representing the amounts payable by the insurance broker to the insurance firm (See Rule CL-1.3.4).

        Amended: July 2023
        April 2012

    • CL-1.3 CL-1.3 CBB Reporting

      • CL-1.3.1

        In accordance with Sections BR-1.2A and BR-1.4A, insurance brokers must prepare and submit to the CBB an Insurance Broker Return (IBR) semi-annually. The 31st December IBR must be submitted by 28th February at the latest. The 30th June IBR must be submitted by 30th July at the latest.

        April 2012
        Amended: April 2022

      • CL-1.3.2

        Insurance brokers must provide the CBB, within 3 months of the financial year end, the audited financial statements and the management letter from the external auditor.

        April 2012

      • CL-1.3.3

        In accordance with Paragraph BR-1.5.4, insurance brokers must provide the CBB, within 3 months of the financial year end, the Agreed Upon Procedure Report produced by the external auditor, certifying that the insurance broker among other things, is complying with the Rules of the Module CL (Client Money).

        April 2012

      • Reporting of Fiduciary Assets and Liabilities

        • CL-1.3.4

          Unremitted insurance premiums held in the client money account, in accordance with Paragraph CL-2.2.4, and uncollected premiums from insureds must be recorded as fiduciary assets on the balance sheet of the insurance broker. Fiduciary assets must have an offsetting fiduciary liability representing the total remittances to be made to the insurance firm.

          April 2012