GR GR General Requirements
GR-5.3 GR-5.3 Suitability of Controllers
GR-5.3.3 [Replaced 1 October 2015]
Natural persons who intend to take a stake of 20% or more in a
Bahraini insurance licensee are subject to enhanced scrutiny, given the CBB's position ashome supervisor of such licensees. The level of scrutiny and of expected compliance with the above standards become more onerous as the level of proposed ownership increases. Natural persons will not normally be approved to take majority control (i.e. a stake of 50% or more of either the capital or voting rights) of aBahraini insurance licensee .Amended: October 2011
Amended: July 2007
Amended: October 2007GR-5.3.5 [Replaced 1 October 2015]
Legal persons who intend to take a stake of 20% or more in a
Bahraini insurance licensee are subject to enhanced scrutiny, given the CBB's position ashome supervisor of such licensees. The level of scrutiny and of expected compliance with the above standards becomes more onerous as the level of proposed ownership increases. In particular, unregulated legal persons will not normally be approved to take majority control (i.e. a stake of 50% or more of either the capital or voting rights of aBahraini insurance licensee , unless the proposed parent is a well-established business (that satisfies the above conditions), and its ownership would not pose undue conflicts of interest. Regulated legal persons will normally only be approved to take majority control where — in addition to the above conditions — the resulting group would be subject to effective consolidated supervision in accordance with relevant international standards; and thehome supervisor of the parent entity has agreed to the proposed acquisition, as well as to the sharing of relevant prudential information for supervisory purposes (expressed, if necessary, through the signing of a Memorandum of Understanding between the CBB and thehome supervisor , setting out their respective supervisory responsibilities).Amended: October 2011
Adopted: July 2007GR-5.3.6 [Replaced 1 October 2015]
The CBB may contact references and supervisory bodies in connection with any information provided to support an application for
controller . The CBB may also ask for further information, in addition to that provided in the Form 2, if required to satisfy itself as to the suitability of the applicant.Adopted: July 2007GR-9.1 GR-9.1 Key Provisions
GR-9.1.1
An
insurance firm may appoint as its representative for its Bahrain business a person who is not licensed by the CBB, known as anappointed representative . However,appointed representatives must be registered with the CBB.Insurance firms that appointappointed representatives are calledlicensed principals .Amended: October 2009
Amended: July 2007GR-9.1.1A
This Chapter does not apply to
insurance firms whose business is limited to reinsurance.Adopted: October 2009GR-9.1.1B
Insurance licensees , other thaninsurance firms , may not appointappointed representatives . More specifically,insurance brokers may not appoint representatives acting on their behalf.Adopted: October 2009GR-9.1.1C
The requirements for registration and minimum qualifications of
appointed representatives are effective 1st January 2010 (refer to ES-2.5.4).Adopted: October 2009GR-9.1.2
Appointed representatives are persons acting on behalf, and under the overall control of alicensed principal . They are effectively an extension of thelicensed principal . Thelicensed principal takes full responsibility for the actions of theirappointed representatives vis-à-vis the CBB. Note that onlyinsurance firms may act aslicensed principals .Amended: July 2007GR-9.1.3
An
appointed representative may be a natural or corporate person. An appointed representative may be a CBB licensed firm (e.g. a bank) that does not hold any of the permissions ofinsurance firm ,insurance broker , orinsurance consultant . Where theappointed representative is a corporate entity, its memorandum and articles of association must include the activities of theappointed representative of the CBB licensedinsurance firm , as required under Resolution 11 issued as per Article 74 of the CBB Law.Amended: October 2009
Amended: July 2007GR-9.1.3A
An
appointed representative must be registered with the CBB in accordance with Paragraph AU-1.3A.Adopted: October 2009GR-9.1.4
An
appointed representative may have agencies with no more than onelicensed principal per type of business. For the purposes of this requirement the types of business are as follows:(a) General insurance as defined in Paragraph AU-1.4.9; and(b) Long-term insurance (as defined in Paragraph AU-1.4.8).Amended: October 2009
Amended: July 2007GR-9.1.4A
An
appointed representative that is authorised to conduct both Islamic and conventional business by virtue of its license provided by the CBB, may have different agencies per type of business, for both Islamic and conventional insurance business.Adopted: October 2009GR-9.1.5
An
appointed representative may only undertake the types of business for which thelicensed principal is authorised to undertake by the CBB.Amended: July 2007GR-9.1.5A
An
insurance firm can only nominateappointed representatives that meet minimum qualifications and fit and proper requirements of the CBB.Adopted: October 2009GR-9.1.5B
For purposes of Paragraph GR-9.1.5A, the minimum qualifications of
appointed representatives recognised by the CBB are:(a) For general insurance, the Award in General Insurance from the Chartered Insurance Institute (CII) and the Bahrain Institute of Banking and Finance (BIBF); and(b) For long-term insurance, the Award in Financial Planning from the Chartered Insurance Institute (CII) and the Bahrain Institute of Banking and Finance (BIBF).Adopted: October 2009GR-9.1.5C
Upon written application to the CBB, equivalent or higher qualification from an internationally recognised insurance institute may be acceptable, provided it substantially covers the core syllabuses of the minimum qualifications outlined in Paragraph GR-9.1.5B.
Adopted: October 2009GR-9.1.5D
Where the
appointed representative is a retailer of goods, including motor vehicles, or a travel agent selling insurance policies or helping customers make a claim under the policy and the insurance services provided are complementary to the main activity conducted by theappointed representative , an exemption from the requirements of Paragraph GR-9.1.5B may be sought by thelicensed principal . A request for such exemption must be submitted in writing to the Director, Insurance Supervision outlining what alternative training has been provided to theappointed representative to ensure that potentialpolicyholders are treated in a fair and equitable manner and that the provision of insurance coverage complies with all the requirements outlined in Module BC, and in particular with Chapter BC-2, The Insurance Code of Practice.Adopted: October 2009GR-9.1.6
In the case where an
appointed representative acts as agent for more than onelicensed principal , it must arrange its business to achieve reasonable segregation between principals to allow eachlicensed principal to carry out monitoring of its business under its agency agreement.GR-9.1.7
An
appointed representative must maintain separate bank accounts for any monies relating to premiums and claims handled on behalf of eachlicensed principal .GR-9.1.8
An appointment by an
insurance firm of anappointed representative must be the subject of a written contract of agency. This contract must state, inter alia:(a) The name of theappointed representative ;(b) The name of thelicensed principal ;(c) That thelicensed principal is responsible for the actions and conduct of the representative concerned when acting or purporting to act under it (without prejudice to any rights to bring actions for damages by thelicensed principal against theappointed representative or vice versa);(d) The type(s) of business for which the agency is granted;(e) That theappointed representative allows full access to the CBB, thelicensed principal and thelicensed principal's externalauditors , given reasonable notice, to all records relating to the business falling within its agency;(f) The terms and conditions for the handling of and accounting for client money, including a statement that theappointed representative is acting solely as agent of thelicensed principal in the handling of such money;(g) The conditions for cancellation, which cannot alter or cancel the continuing responsibility of the licensed firm to take responsibility for the representative's action and conduct (without prejudice to any rights to bring actions for damages by the licensed firm against the representative or vice versa); and(h) That theappointed representative is prohibited from carrying on agencies with otherlicensed principals for the same type of business, in accordance with Paragraph GR-9.1.4, or may do so in accordance with Paragraph GR-9.1.4A, for conventional and Takaful insurance.Amended: October 2009
Amended: July 2007GR-9.1.9
The powers of access given to the CBB and the
licensed principal's auditors by Sub-paragraph GR-9.1.8 (e) are in order to ensure that the agency between thelicensed principal and theappointed representative does not impede the effective supervision of thelicensed principal by the CBB.Amended: July 2007GR-9.1.10
Once appointed, the
licensed principal must take full responsibility for the actions and conduct of theappointed representative , in respect of any matters of compliance with, or breach of, the requirements of the CBB Rulebook that relate to activities of theappointed representative acting within the real or implied authority of thelicensed principal . This is without prejudice to any rights of redress thelicensed principal may have at law against theappointed representative .Amended: July 2007GR-9.1.11
The
licensed principal must ensure that theappointed representative complies with the provisions of the CBB Rulebook applicable to the activities being undertaken in accordance with the agency, including, but not limited to:(a) Record-keeping;(b) Business conduct; and(c) Financial crime requirements.Amended: July 2007GR-9.1.12
The
licensed principal must ensure that periodic monitoring of theappointed representative is undertaken to ensure the adequacy of the systems and controls in place. Thelicensed principal or an appropriately qualified independent party may undertake this monitoring.GR-9.1.13
All appointments of
appointed representatives , variations in terms of appointment and cancellations of appointment must be notified in writing to the CBB no later than 5 working days after they have taken place. Such notifications must be addressed to the Director, Licensing Directorate.Amended: April 2020
Amended: October 2009
Amended: July 2007GR-9.1.14
An
appointed representative must at all times act within the limits of his authority in the conduct of activities covered by the terms of the agency agreement.GR-9.1.15
An
appointed representative must disclose to clients the relationship that he has with thelicensed principal and any other parties that could reasonably be considered material to the insurance contract.