Starting from 1950 till today, the insurance industry in Bahrain has been growing steadily and strongly, mirroring the expansion of Bahrain’s financial sector. The Kingdom offers the ideal environment for the insurance industry, and with its forward-looking and business-friendly regulatory regime it hopes to sustain this growth in the long-term.
As of 2019, Bahrain is home to more than 150 insurance entities which includes Bahraini firms (including Takaful & Retakaful Firms), overseas firms, brokers, insurance managers, insurance consultants, actuaries, loss adjustors, insurance pools & syndicates, insurance society and Third Party Administrators (TPA).
Bahrain has achieved preeminence as the regional financial services centre, through the Government’s wise and far-sighted policy of maintaining an open and diversified economy base and by paying close attention to the legal and regulatory infrastructure.
This has provided the framework for the Bahrain insurance industry to flourish and for Bahrain to become the insurance hub of this important region. Since 2002, the Central Bank of Bahrain (CBB) acts as the regulator of the insurance sector and provides an efficient regulatory framework for financial services firms operating in Bahrain. Further, all legal, regulatory and supervisory insurance frameworks follow the essential criteria of the International Association of Insurance Supervisors (IAIS) core principles and methodology.
Based on its statutory objectives and powers, the CBB has developed its supervisory objectives, the following are the main of such objectives:
· To promote stability and soundness in the insurance system;
· To provide an appropriate degree of protection to users and the financial system;
· To promote transparency and market discipline; and
· To reduce the likelihood of licensees being used for financial crime including money laundering activities.
Regulatory Development Initiatives
As part of the CBB’s ongoing policy in enhancing transparency and raising awareness on the CBB’s regulatory development initiatives. The CBB has circulated to all Insurance Licensees a list of proposed rules under Volume 3 that the CBB would issue for consultation during 2019:
1- Introducing “Training & Competency” Module;
2- The minimum insurance cover for the unified “Motor Comprehensive Policy”;
3- Solvency Control Levels;
4- Enhancing the requirements of Appointed Representatives;
5- Enhancing the requirements of “Client Money’ Module;
6- Enhancing the requirements of “Insurance Manager” Module; and
7- Introducing new regulatory framework for “Insurance Aggregator”.
The CBB encourages Insurance Licensees to follow prudent practices in the conduct of their business and promptly communicate with it on relevant policy matters in the best interests of the financial stability and soundness of the sector.