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Location: Central Bank of Bahrain Volume 3—Insurance > Part A > High Level Standards > GR General Requirements > GR-6 Close Links
  • GR-6 Close Links

    • GR-6.1 Key Provisions

      • GR-6.1.1

        Condition 3 of the CBB's licensing conditions specifies, amongst other things, that insurance licenseesG must satisfy the CBB that their close linksG do not prevent the effective supervision of the licensee and otherwise pose no undue risks to the licensee. (See Paragraph AU-2.3.1).

        Amended: July 2007

      • GR-6.1.2

        Applicants for an insurance license must provide details of their close linksG , as provided for under Form 1 (Application for a License). (See Paragraph AU-5.1.5).

        Amended: October 2007

      • GR-6.1.3

        Insurance firmsG and insurance brokersG must submit to the CBB, attached to their annual return and within 3 months of their financial year-end, a report on their close linksG . The report must identify all undertakings closely linked to the licensee, as defined in Section GR-6.2.

        Amended: April 2012
        Amended: July 2007

      • GR-6.1.4

        Insurance licenseesG may satisfy the requirement in Paragraph GR-6.1.3 by submitting a corporate structure chart, identifying all undertakings closely linked to the licensee. In the case of insurance firmsG , the report is included as part of the Insurance Firm Return (Form IFR (C) or IFR (T)). In the case of insurance brokersG , the report is included as part of the the Insurance Broker Return (Form IBR).

        Amended: April 2012
        Amended: July 2007

      • GR-6.1.5

        Insurance licenseesG must provide information on undertakings with which they are closely linked, as requested by the CBB.

        Amended: July 2007

    • GR-6.2 Definition of Close Links

      • GR-6.2.1

        An insurance licenseeG ('A') has close links with another undertaking ('C'), if:

        (a) C is a parent undertakingG of A;
        (b) C is a subsidiaryG of A;
        (c) C is a parent undertakingG of a subsidiaryG of A;
        (d) C is a subsidiaryG of a parent undertakingG of A;
        (e) C owns or controls 20% or more of the voting rights or capital of A; or
        (f) A, any of its parentG or subsidiariesG , or any of the subsidiariesG of its parentG , owns or controls 20% or more of the voting rights or capital of C.
        Amended: July 2007
        Amended: October 2007

    • GR-6.3 Assessment Criteria

      • GR-6.3.1

        In assessing whether an insurance licensee'sG close linksG may prevent the effective supervision of the firm, or otherwise poses no undue risks to the insurance licenseeG , the CBB takes into account the following:

        (a) Whether the CBB will receive adequate information from the insurance licenseeG , and those with whom the licensee has close linksG , to enable it to determine whether the licensee is complying with CBB requirements;
        (b) The structure and geographical spread of the licensee, its group and other undertakings with which it has close linksG , and whether this might hinder the provision of adequate and reliable flows of information to the CBB, for instance because of operations in territories which restrict the free flow of information for supervisory purposes;
        (c) In the case of an overseas insurance licenseeG , whether the insurance licenseeG and its group will be subject to supervision on a consolidated basis (for example, if a financial resources requirement is determined for the group as a whole); and
        (d) Whether it is possible to assess with confidence the overall financial position of the group at any particular time, and whether there are factors that might hinder this, such as group members having different financial year ends or auditorsG , or the corporate structure being unnecessarily complex and opaque.
        Amended: July 2007

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