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Location: Central Bank of Bahrain Volume 3—Insurance > Part A > High Level Standards > GR General Requirements > GR-9 Appointed Representatives
  • GR-9 Appointed Representatives

    • GR-9.1 Key Provisions

      • GR-9.1.1

        An insurance firmG may appoint as its representative for its Bahrain business a person who is not licensed by the CBB, known as an appointed representativeG . However, appointed representativesG must be registered with the CBB. Insurance firmsG that appoint appointed representativesG are called licensed principalsG .

        Amended: October 2009
        Amended: July 2007

      • GR-9.1.1A

        This Chapter does not apply to insurance firmsG whose business is limited to reinsurance.

        Adopted: October 2009

      • GR-9.1.1B

        Insurance licenseesG , other than insurance firmsG , may not appoint appointed representativesG . More specifically, insurance brokersG may not appoint representatives acting on their behalf.

        Adopted: October 2009

      • GR-9.1.1C

        The requirements for registration and minimum qualifications of appointed representativesG are effective 1st January 2010 (refer to ES-2.5.4).

        Adopted: October 2009

      • GR-9.1.2

        Appointed representativesG are persons acting on behalf, and under the overall control of a licensed principalG . They are effectively an extension of the licensed principalG . The licensed principalG takes full responsibility for the actions of their appointed representativesG vis-à-vis the CBB. Note that only insurance firmsG may act as licensed principalsG .

        Amended: July 2007

      • GR-9.1.3

        An appointed representativeG 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 of insurance firmG , insurance brokerG , or insurance consultantG . Where the appointed representativeG is a corporate entity, its memorandum and articles of association must include the activities of the appointed representativeG of the CBB licensed insurance firmG , as required under Resolution 11 issued as per Article 74 of the CBB Law.

        Amended: October 2009
        Amended: July 2007

      • GR-9.1.3A

        An appointed representativeG must be registered with the CBB in accordance with Paragraph AU-1.3A.

        Adopted: October 2009

      • GR-9.1.4

        An appointed representativeG may have agencies with no more than one licensed principalG 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 2007

      • GR-9.1.4A

        An appointed representativeG 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 2009

      • GR-9.1.5

        An appointed representativeG may only undertake the types of business for which the licensed principalG is authorised to undertake by the CBB.

        Amended: July 2007

      • GR-9.1.5A

        An insurance firmG can only nominate appointed representativesG that meet minimum qualifications and fit and proper requirements of the CBB.

        Adopted: October 2009

      • GR-9.1.5B

        For purposes of Paragraph GR-9.1.5A, the minimum qualifications of appointed representativesG 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 2009

      • GR-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 2009

      • GR-9.1.5D

        Where the appointed representativeG 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 the appointed representativeG , an exemption from the requirements of Paragraph GR-9.1.5B may be sought by the licensed principalG . A request for such exemption must be submitted in writing to the Director, Insurance Supervision outlining what alternative training has been provided to the appointed representativeG to ensure that potential policyholdersG 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 2009

      • GR-9.1.6

        In the case where an appointed representativeG acts as agent for more than one licensed principalG , it must arrange its business to achieve reasonable segregation between principals to allow each licensed principalG to carry out monitoring of its business under its agency agreement.

      • GR-9.1.7

        An appointed representativeG must maintain separate bank accounts for any monies relating to premiums and claims handled on behalf of each licensed principalG .

      • GR-9.1.8

        An appointment by an insurance firmG of an appointed representativeG must be the subject of a written contract of agency. This contract must state, inter alia:

        (a) The name of the appointed representativeG ;
        (b) The name of the licensed principalG ;
        (c) That the licensed principalG 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 the licensed principalG against the appointed representativeG or vice versa);
        (d) The type(s) of business for which the agency is granted;
        (e) That the appointed representativeG allows full access to the CBB, the licensed principalG and the licensed principal'sG external auditorsG , 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 the appointed representativeG is acting solely as agent of the licensed principalG 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 the appointed representativeG is prohibited from carrying on agencies with other licensed principalsG 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 2007

      • GR-9.1.9

        The powers of access given to the CBB and the licensed principal'sG auditorsG by Sub-paragraph GR-9.1.8 (e) are in order to ensure that the agency between the licensed principalG and the appointed representativeG does not impede the effective supervision of the licensed principalG by the CBB.

        Amended: July 2007

      • GR-9.1.10

        Once appointed, the licensed principalG must take full responsibility for the actions and conduct of the appointed representativeG , in respect of any matters of compliance with, or breach of, the requirements of the CBB Rulebook that relate to activities of the appointed representativeG acting within the real or implied authority of the licensed principalG . This is without prejudice to any rights of redress the licensed principalG may have at law against the appointed representativeG .

        Amended: July 2007

      • GR-9.1.11

        The licensed principalG must ensure that the appointed representativeG 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 2007

      • GR-9.1.12

        The licensed principalG must ensure that periodic monitoring of the appointed representativeG is undertaken to ensure the adequacy of the systems and controls in place. The licensed principalG or an appropriately qualified independent party may undertake this monitoring.

      • GR-9.1.13

        All appointments of appointed representativesG , 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 & Policy Directorate.

        Amended: October 2009
        Amended: July 2007

      • GR-9.1.14

        An appointed representativeG 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 representativeG must disclose to clients the relationship that he has with the licensed principalG and any other parties that could reasonably be considered material to the insurance contract.

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