Key Provisions
CRA-4.8.1
Licensees handlingclient asset and/orclient money must maintain a professional indemnity coverage (insurance policy) in accordance with the scope of coverage provided in Paragraph CRA-4.8.3.Amended: April 2023
Added: April 2019CRA-4.8.2
For the purposes of Paragraph CRA-4.8.1,
licensees must maintain professional indemnity coverage for an amount that is determined based on its assessment of the potential risk exposure. Such amount, however, must not be less than BD100,000.Added: April 2019CRA-4.8.3
Licensees must ensure that the Professional Indemnity Coverage, inter alia:(a) covers any legal liability in consequence of any negligent act, error or omission in the conduct of thelicensee's business by thelicensee or any person employed by it or otherwise acting for it, including consultants under a contract for service with thelicensee ;(b) covers legal defence costs which may arise in consequence of any negligent act, error or omission in the conduct of thelicensee's business by thelicensee or any person employed by it or otherwise acting for it, including consultants under a contract for service with thelicensee ;(c) Covers any legal liability in consequence of any dishonest, fraudulent, criminal or malicious act, error or omission of any person at any time employed by thelicensee , or otherwise acting for it, including consultants under a contract for service with thelicensee ; and(d) covers loss of and damage to documents and records belonging to thelicensee or which are in the care, custody or control of thelicensee or for which thelicensee is responsible; including also liability and costs and expenses incurred in replacing, restoring or reconstructing the documents or records; including also consequential loss resulting from the loss or damage to the documents or records.Amended: April 2023
Added: April 2019CRA-4.8.4
The professional indemnity coverage must be obtained from an insurance firm acceptable to the CBB and licensed in the Kingdom of Bahrain.
Licensees must submit a Professional Indemnity Insurance Return (Form PIIR) on an annual basis. Additionally, they must provide, upon request, evidence to the CBB of the coverage in force.Added: April 2019CRA-4.8.5
[This Paragraph was deleted in April 2023].
Deleted: April 2023
Added: April 2019CRA-4.8.6
The requirement to maintain professional indemnity coverage will normally be met by the
licensee obtaining an insurance policy from an insurance firm. The CBB may also accept an insurance indemnity policy issued at group level, e.g. issued with respect to the parent of thelicensee , provided the terms of the policy explicitly provide indemnity coverage with respect to thelicensee and meets the requirements of Paragraphs CRA-4.8.1, CRA-4.8.2 and CRA-4.8.3.Amended: April 2023
Added: April 2019CRA-4.8.7
Upon written application to the CBB, the requirement in Rule CRA-4.8.1 may instead be met by the
licensee depositing with a retail bank licensed to operate in the Kingdom of Bahrain, an amount, specified by the CBB, to be held in escrow against future claims. This amount will not be less than the minimum required policy limit.Added: April 2019CRA-4.8.8
The policy must contain a clause that it may not be cancelled or lapsed without the prior notification of the CBB. The policy must also contain a provision for an automatic extended reporting period in the event that the policy is cancelled or lapsed, such that claims relating to the period during which the policy was in force may subsequently still be reported.
Amended: April 2023
Added: April 2019
