BackText onlyPrint

You need the Flash plugin.

Download Macromedia Flash Player



Location: Central Bank of Bahrain Volume 3—Insurance > Part A > Business Standards > FC Financial Crime
  • FC Financial Crime

    • FC-A Introduction

      • FC-A.1 Purpose

        • Executive Summary

          • FC-A.1.1

            This Module applies, to relevant insurance licenseesG , a comprehensive framework of Rules and Guidance aimed at combating money laundering and terrorist financing. In so doing, it helps implement the FATF Recommendations on combating money laundering and financing of terrorism and proliferation, issued by the Financial Action Task Force (FATF), that are relevant to insurance licenseesG ; it also implements IAIS guidance in this area. (Further information on these can be found in Chapter FC-9.) The Module also contains measures relating to the combating of fraud in the insurance sector.

            Amended: October 2015
            Amended: January 2007

          • FC-A.1.2

            The Module requires insurance firmsG and insurance brokersG to have effective anti-money laundering ('AML') policies and procedures, in addition to measures for combating the financing of terrorism ('CFT'). The Module contains detailed requirements relating to customer due diligence, reporting and the role and duties of the Money Laundering Reporting Officer (MLRO). Furthermore, examples of suspicious activity are provided (see Part B, Supplementary Information, Appendix FC-(iv)), to assist licensees to monitor transactions and fulfil their reporting obligations under Bahrain law. Because they represent negligible money laundering/terrorism financing risk, these requirements do not apply to insurance consultantsG nor, in some circumstances, to insurance managersG .

            Amended: July 2007

          • FC-A.1.3

            This Module also covers measures in place to combat fraud: these apply to all insurance licenseesG . Chapter FC-10 sets out basic requirements regarding measures to deter, detect and report instances of fraud and attempted fraud.

        • Legal Basis

          • FC-A.1.4

            This Module contains the Central Bank of Bahrain's (the CBB) Directive (as amended from time to time) regarding the combating of financial crime, and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law'). The Directive in this Module is applicable to insurance licenseesG (including their approved personsG ).

            Amended: January 2011
            Added: January 2007

          • FC-A.1.5

            For an explanation of the CBB’s rule-making powers and different regulatory instruments, see Section UG-1.1.

            Added: January 2007

      • FC-A.2 Module History

        • FC-A.2.1

          This Module was first issued by the BMA in April 2005, together with the rest of Volume 3 (Insurance). Any material changes that have subsequently been made to this Module are annotated with the calendar quarter date in which the change was made: Chapter UG-3 provides further details on Rulebook maintenance and version control.

          Amended: January 2007

        • FC-A.2.2

          When the CBB replaced the BMA in September 2006, the provisions of this Module remained in force. Volume 3 was updated in January 2007 to reflect the switch to the CBB; however, new calendar quarter dates were only issued where the update necessitated changes to actual requirements.

          Added: January 2007

        • FC-A.2.3

          A list of recent changes made to this Module is detailed in the table below:

          Module Ref. Change Date Description of Changes
          FC-A.1;
          FC-2;
          FC-3;
          FC-5;
          FC-6.1;
          FC-6.2;
          FC-6.5
          01/07/05 Inclusion of a revised and renamed Customer Due Diligence Chapter (including a new non-face-to-face business Section). Renamed Suspicious Transaction Reporting Chapter, with minor clarifications to the text. Changes to layout of FC-5 and clarifications to the text. Correction of minor typographical and cross-referencing errors.
          FC 01/10/05 New Chapter on Non-Cooperative Countries/Territories, and UN notifications. Section on charities removed, since not applicable to insurance licensees. Extensive drafting changes to remainder of text, to improve clarity and ensure consistency across different CBB Rulebooks; but no other changes of substance.
          FC-1.2 01/01/06 Clarified in FC-1.2.11 that the verification for item (a) applies to the identity of the ultimate provider of funds.
          FC-3.1.7 01/04/06 Clarified and added guidance Paragraph dealing with residency requirements of MLRO.
          FC-4.3.1 01/07/06 Updated contact information for Compliance Directorate.
          FC-A.1.4 01/2007 New Rule introduced, categorising this Module as a Directive
          FC-1.6.3 01/2007 Clarified simplified due diligence rules for transactions under BD6,000.
          FC-3.3.5A and FC-3.3.7 01/2007 Allowed for a transition period for the external auditor's report required under SubParagraph FC-3.3.1(d) and clarified when all reports are due.
          FC-4.3.1 01/2007 Updated new e-mail address for Compliance Directorate.
          FC-1.7.2(d) 10/2007 Clarified the record retention period for introduced business in line with Article 60 of the CBB Law
          FC-2.2.3,
          FC-2.2.6,
          FC-4.2.5,
          FC-6.1.1,
          FC-6.1.2,
          FC-6.1.3
          10/2007 Clarified the record retention period for various transactions to be in line with Article 60 of the CBB Law
          FC-3.3.2 10/2007 Clarified the appointment of external auditors for the purposes of the report required under Paragraph FC-3.3.1 (d)
          FC-10.1.11 10/2007 Added reference to new Guidance paper on fraud issued by the IAIS.
          FC-3.3.7 04/2008 Clarified to whom in the CBB should the reports required under Paragraph FC-3.3.1 be submitted to.
          FC-1.7.2,
          FC-2.2.3,
          FC-2.2.6,
          FC-4.2.5,
          FC-6.1.1,
          FC-6.1.2,
          FC-6.1.3
          04/2008 Reduced retention requirements of records to five years to be consistent with AML Law and other Volumes of the CBB Rulebook
          Table of Contents 07/2008 Added Supplementary Documents to Part B.
          FC-1.1.3 07/2009 Provided guidance for insurance brokers on definition of 'customers'.
          FC-3.1.10,
          FC-3.2.1,
          FC-4.2.3,
          FC-4.3.1
          04/2010 Updated name and e-mail of relevant authority to Financial Intelligence Unit.
          FC-A.1.4 01/2011 Clarified legal basis
          FC-3.1.9 10/2011 Clarified requirements for MLRO.
          FC-3.3 10/2011 Amended Section to allow for CBB-approved consultancy firm to do required sample testing and report under Paragraph FC-3.3.1.
          FC-3.3.5 and FC-3.3.6 01/2012 Amended to reflect the addition of approved consultancy firm.
          FC-4.2.3 10/2014 Updated method of submitting STRs.
          FC-4.3 10/2014 Updated relevant authorities information.
          FC 10/2015 Updated to reflect February 2012 update to FATF Recommendations.
          FC-1.5.1 07/2016 Aligned definition of PEPs as per FATF Recommendations.
          FC-1.5.4 07/2016 Definition of PEPs is already included in Glossary so this guidance paragraph was deleted.
          FC-4.2.3 07/2016 Updated instructions for STR.
          FC-1.2.9A 01/2017 Added guidance paragraph on CR printing
          FC-7.2.1AA 04/2017 Implementing and complying with the United Nations Security Council resolutions requirement.
          FC-1.1.2B 10/2017 Amended paragraph on CDD requirements.
          FC-1.2.7 10/2017 Amended paragraph.
          FC-1.2.8A 10/2017 Added new paragraph on legal entities or legal arrangements CDD.
          FC-2.2.10 – FC-2.2.11 10/2017 Amended paragraphs on On-going CDD and Transaction Monitoring.
          FC-3.1.6A 10/2017 Added paragraph on combining the MLRO or DMLRO position with any other position within the licensee.
          FC-B.3.4 01/2018 Amended paragraph.
          FC-1.5.5 01/2018 Added new paragraph.
          FC-1.5.6 01/2018 Added new paragraph.
          FC-1.6.1 01/2018 Deleted sub-paragraph (f).
          FC-1.7.1 01/2018 Amended paragraph.
          FC-4.2.6 01/2018 Amended paragraph.
          FC-7.1.4 01/2018 Amended paragraph.
          FC-7.2.2 01/2018 Deleted paragraph.
          FC-1.1.2 07/2018 Deleted sub-paragraph (g).
          FC-1.2.1 07/2018 Amended guidance deleting the threshold.
          FC-1.6.3 07/2018 Deleted Paragraph.
          FC-1.6.9 07/2018 Deleted Paragraph.
          FC-1.6.10 07/2018 Deleted Paragraph.
          FC-1.6.1 01/2019 Amended references.
          FC-3.3.2 - FC-3.3.5 01/2019 Amended references.
          FC-3.3.5A 01/2019 Deleted paragraph.
          FC-3.3.7 01/2019 Amended references.
          FC-6.1.2 01/2019 Amended references.

        • FC-A.2.3 [Deleted]

          Deleted: January 2007

        • FC-A.2.4

          Guidance on the implementation and transition to Volume 3 (Insurance) is given in Module ES (Executive Summary).

          Amended: January 2007

    • FC-B Scope of Application

      • FC-B.1 License Categories

        • FC-B.1.1

          Chapters FC-1 to FC-9 apply to all insurance firmsG and insurance brokersG . These Chapters also apply to insurance managersG where they manage a captive insurer. Chapters FC-1 to FC-9 do not apply to insurance consultantsG .

        • FC-B.1.2

          Chapters FC-1 to FC-9 apply, as specified in Paragraph FC-B.1.1, to all insurance firmsG , insurance brokersG and, where they manage a captive insurerG , insurance managersG , irrespective of whether they are a Bahraini insurance licenseeG or an overseas insurance licenseeG . Overseas insurance licenseesG , and Bahraini insurance licenseesG that are subsidiaries of an overseas group, may apply additional AML/CFT policies and procedures, provided they satisfy the minimum requirements contained in this Module.

          Amended: January 2007
          Amended: October 2007

        • FC-B.1.3

          The Rules and Guidance in this Module are in addition to and supplement the requirements contained in Decree Law No. (4) of 2001 with respect to the prevention and prohibition of the laundering of money; this Law was subsequently updated, with the issuance of Decree Law No. 54 of 2006 with respect to amending certain provisions of Decree No. 4 of 2001 (collectively, 'the AML Law'). The AML Law imposes obligations generally in relation to the prevention of money laundering and the combating of the financing of terrorism, to all persons resident in Bahrain (including financial services firms such as insurance licenseesG ). All insurance licenseesG are under the statutory obligations of that Law, in addition to the more specific requirements contained in this Module. Nothing in this Module is intended to restrict the application of the AML Law (a copy of which is contained in Part B of Volume 3 (Insurance), under 'Supplementary Information'). Also included in Part B is a copy of Decree Law No. 58 of 2006 with respect to the protection of society from terrorism activities ('the anti-terrorism law').

          Amended: January 2007

        • FC-B.1.4

          Chapter FC-10, dealing with insurance fraud, applies to all insurance licenseesG .

      • FC-B.2 Types of Insurance Business

        • FC-B.2.1

          This Module applies to all types of insurance contracts, including general and long-term insuranceG , as well as to reinsuranceG and captive insurance business.

          Amended: January 2007
          Amended: October 2007

        • FC-B.2.2

          International experience shows that all types of insurance (including general insuranceG and reinsuranceG ) have been used as channels for illegal activities. However, the CBB also recognises that in the case of pure reinsurance transactions, these risks may exist to a lesser extent. Consequently, upon application by the licensee, the CBB will consider, on an individual basis, exemptions from specific requirements of this Module, in relation to the reinsurance activities of licensees. Normally, the CBB will consider granting such exemptions where the reinsurer concerned deals only with licensed insurance entities, that are subject to AML / CFT standards equivalent to those in this Module.

          Amended: January 2007
          Amended: October 2007

      • FC-B.3 Overseas Subsidiaries and Branches

        • FC-B.3.1

          Insurance licenseesG must apply the requirements in this Module to all their branchesG and subsidiariesG , including those operating in another jurisdiction. Where local standards differ, the higher standard must be followed. Insurance licenseesG must pay particular attention to procedures in branchesG and subsidiariesG in countries that do not or insufficiently apply the FATF Recommendations and Special Recommendations and do not have adequate AML/CFT procedures, systems and controls (see also Section FC-7.1).

          Amended: October 2015
          Amended: January 2007

        • FC-B.3.2

          Where another jurisdiction's laws or Regulations prevent an insurance licenseeG (or any of its foreign branchesG or subsidiariesG ) from applying the same standards contained in this Module or higher, the licensee must immediately inform the CBB in writing.

          Amended: January 2007

        • FC-B.3.3

          In such instances, the CBB will review alternatives with the insurance licenseeG . Should the CBB and the licensee be unable to reach agreement on the satisfactory implementation of this Module in a foreign subsidiaryG or branchG , the insurance licenseeG may be required by the CBB to cease the operations of the subsidiaryG or branchG in the foreign jurisdiction in question.

          Amended: January 2007

        • FC-B.3.4

          Financial groups (e.g. an insurance firm with its subsidiaries) must implement groupwide programmes against money laundering and terrorist financing, including policies and procedures for sharing information within the group for AML/CFT purposes, which must also be applicable, and appropriate to, all branches and subsidiaries of the financial group. These must include:

          (a) The development of internal policies, procedures and controls, including appropriate compliance management arrangements, and adequate screening procedures to ensure high standards when hiring employees;
          (b) An ongoing employee training programme;
          (c) An independent audit function to test the system;
          (d) Policies and procedures for sharing information required for the purposes of CDD and money laundering and terrorist financing risk management;
          (e) The provision at group-level compliance, audit, and/or AML/CFT functions of customer, account and transaction information from branches and subsidiaries when necessary for AML/CFT purposes; and
          (f) Adequate safeguards on the confidentiality and use of information exchanged.
          Amended: January 2018
          Added: October 2015

    • FC-1 Customer Due Diligence

      • FC-1.1 General Requirements

        • Verification of Identity and Source of Funds

          • FC-1.1.1

            Insurance licenseesG must establish effective systematic internal procedures for establishing and verifying the identity of their customersG and the source of their funds. Such procedures must be set out in writing and approved by the licensee's Board of Directors and senior management (as applicable) and must be strictly adhered to.

            Amended: October 2015
            Amended: January 2007

          • FC-1.1.2

            Insurance licenseesG must implement the customer due diligence measures outlined in this Chapter when:

            (a) Establishing business relations with a new or existing customer;
            (b) A change to the signatory or policyholder beneficiary is made;
            (c) A significant transaction takes place;
            (d) There is a material change in the terms of an insurance policy or in the manner in which the business relationship is conducted;
            (e) CustomerG documentation standards change substantially;
            (f) The insurance licenseeG has doubts about the veracity or adequacy of previously obtained customer due diligence information;
            (g) [This Sub-paragraph was deleted in July 2018]; or
            (h) There is a suspicion of money laundering or terrorist financing.
            Amended: July 2018
            Amended: January 2007

          • FC-1.1.2A

            Insurance licenseesG must understand, and as appropriate, obtain information on the purpose and intended nature of the business relationship.

            Added: October 2015

          • FC-1.1.2B

            Insurance licenseesG must conduct ongoing due diligence on the business relationship, including:

            (a) Scrutinizing of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the institution's knowledge of the customer, their business and risk profile, including, where necessary, the source of funds; and
            (b) Ensuring that documents, data or information collected under the CDD process is kept up-to-date and relevant, by undertaking reviews of existing records, particularly for higher risk categories of customers.
            Amended: October 2017
            Added: October 2015

          • FC-1.1.3

            For the purposes of this Module, 'customer' includes counterparties such as reinsurers and financial markets counterparties, as well as persons insured by the licensee. However, in the case of group insurance policies (such as group life or medical), the requirements in this Module need not be applied to all policyholdersG : see Paragraph FC-1.2.13. For insurance brokersG , 'customer' refers to policyholdersG .

            Amended: July 2009
            Amended: January 2007

          • FC-1.1.4

            The CBB's specific minimum standards to be followed with respect to verifying customer identity and source of funds are contained in Section FC-1.2. Enhanced requirements apply under certain high-risk situations: these requirements are contained in Sections FC-1.3 to FC-1.5 inclusive. Simplified customer due diligence measures may apply in defined circumstances: these are set out in Section FC-1.6.

            Amended: January 2007

          • FC-1.1.5

            Where an insurance licenseeG is dealing with an intermediary such as a broker, reliance may be placed on customer identification undertaken by the intermediary, if certain conditions are satisfied: please refer to Chapter FC-1.7.

        • Verification of Third Parties

          • FC-1.1.6

            Insurance licenseesG must obtain a signed statement from all new customersG confirming whether or not the customerG is acting on their own behalf or not. This undertaking must be obtained prior to conducting any transactions with the customerG concerned.

            Amended: January 2007

          • FC-1.1.7

            Where a customerG is acting on behalf of a third party, the insurance licenseeG must also obtain a signed statement from the third party, confirming they have given authority to the customerG to act on their behalf. Where the third party is a legal person, the insurance licenseeG must have sight of the original Board resolution (or other applicable document) authorising the customerG to act on the third party's behalf, and retain a certified copy.

            Amended: January 2007

          • FC-1.1.8

            Insurance licenseesG must establish and verify the identity of the customerG and (where applicable) the party/parties on whose behalf the customerG is acting. In the case of insurance policies, the identity of the beneficiaries must also be separately identified and verified, and the relationship between the insured party and the beneficiaries must be ascertained. Verification must take place in accordance with the requirements specified in this Chapter.

            Amended: January 2007

          • FC-1.1.9

            If claims, commissions, and other monies are to be paid to persons (including partnerships, companies, etc.) other than the policyholderG , then the identity of the proposed recipient of these monies must also be verified in accordance with the requirements specified in this Chapter.

            Amended: January 2007

          • FC-1.1.10

            Where a policy is provided to a minor or other person lacking full legal capacity, the normal identification procedures as set out in this Chapter must be followed. In the case of minors, licensees must additionally verify the identity of the parent(s) or legal guardian(s). Where a third party on behalf of a person lacking full legal capacity subscribes to a policy, the licensee must establish the identity of that third party as well as the intended policyholderG .

            Amended: January 2007

        • Anonymous and Nominee Accounts

          • FC-1.1.11

            Insurance licenseesG must not establish or keep anonymous policies or policies in fictitious names. Where insurance licenseesG maintain a nominee account, which is controlled by or held for the benefit of another person, the identity of that person must be disclosed to the insurance licenseeG and verified by it in accordance with the requirements specified in this Chapter.

        • Timing of Verification

          • FC-1.1.12

            Insurance licenseesG must not commence a business relationship or undertake a transaction with a customerG before completion of the relevant customer due diligence ('CDD') measures specified in this Chapter. However, verification may be completed after receipt of funds in the case of non face-to-face business, or the subsequent submission of CDD documents by the customerG after initial face-to face contact, providing that no disbursement of funds takes place until after the requirements of this Chapter have been fully met.

            Amended: January 2007

        • Incomplete Customer Due Diligence

          • FC-1.1.13

            Where an insurance licenseeG is unable to comply with the requirements specified in this Chapter, it must consider whether to terminate the relationship or not proceed with the transaction. If funds have been received, these must be returned to the counterparty in the same method as originally received. If it proceeds with the transaction (to avoid tipping off the customerG ), it should additionally consider whether it should file a suspicious transaction report.

            Amended: October 2015
            Amended: January 2007

          • FC-1.1.14

            See also Chapter FC-4, which covers the filing of suspicious transaction reports. Regarding the return of funds to the counterparty, if funds are received in cash, funds should be returned in cash. If funds are received by wire transfer, they should be returned by wire transfer.

            Amended: October 2015

        • Existing Customers

          • FC-1.1.15

            [This Paragraph was deleted in October 2015.]

            Deleted: October 2015

          • FC-1.1.16

            [This Paragraph was deleted in October 2015.]

            Deleted: October 2015
            Amended: January 2007

      • FC-1.2 Face-to-face Business

        • Natural Persons

          • FC-1.2.1

            If the customer is a natural person, the insurance licenseeG must obtain and record the following information (in hard copy or electronic form), before providing financial services of any kind:

            (a) Full legal name and any other names used;
            (b) Full permanent address (i.e. the residential address of the customer; a post office box is insufficient);
            (c) Date and place of birth;
            (d) Nationality;
            (e) Passport number (if the customer is a passport holder);
            (f) CPR or Iqama number (for Bahraini or GCC residents only);
            (g) Telephone/fax number and email address (where applicable);
            (h) Occupation or public position held (where applicable);
            (i) Employer's name and address (if self-employed, the nature of the self-employment);
            (j) Type of policy, and nature and volume of anticipated business dealings with the insurance licenseeG ;
            (k) Signature of the customer(s)G ; and
            (l) Source of funds for payment of premium.
            Amended: July 2018
            Amended: January 2007

          • FC-1.2.2

            See Part B, Volume 3 (Insurance), for a Guidance Note on source of funds.

          • FC-1.2.3

            The insurance licenseeG must verify the information in Paragraph FC-1.2.1 (a) to (f), by the following methods below; at least one of the copies of the identification documents mentioned in (a) and (b) below must include a clear photograph of the customer:

            (a) Confirmation of the date of birth and legal name, by taking a copy of a current valid official original identification document (e.g. birth certificate, passport, CPR or Iqama);
            (b) Confirmation of the permanent address by taking a copy of a recent utility bill, bank statement or similar statement from another licensee or financial institution, or some form of official correspondence or official documentation card, such as CPR, from a public/governmental authority, or a tenancy agreement or record of home visit by an official of the insurance licenseeG ; and
            (c) Where appropriate, direct contact with the customer by phone, letter or email to confirm relevant information, such as residential address information.
            Amended: January 2007

          • FC-1.2.4

            Any document copied for the purpose of identification verification must be an original. An authorised official of the licensee must certify the copy, by writing on it the words 'original sighted', together with the date and his signature. Equivalent measures must be taken for electronic copies.

          • FC-1.2.5

            Identity documents which are not obtained by an authorised official of the licensee in original form (e.g. due to a customerG sending a copy by post following an initial meeting) must instead be certified (as per FC-1.2.4) by one of the following from a GCC or FATF member state:

            (a) A lawyer;
            (b) A notary;
            (c) A chartered/certified accountant;
            (d) An official of a government ministry;
            (e) An official of an embassy or consulate; or
            (f) An official of another licensed financial institution or of an associate company of the licensee.
            Amended: January 2007

          • FC-1.2.6

            The individual making the certification under FC-1.2.5 must give clear contact details (e.g. by attaching a business card or company stamp). The insurance licenseeG must verify the identity of the person providing the certification through checking membership of a professional organisation (for lawyers or accountants), or through checking against databases/websites, or by direct phone or email contact.

            Amended: January 2007

        • Legal Entities or Legal Arrangements (such as trusts)

          • FC-1.2.7

            If the customerG is a legal entity or a legal arrangement such as a trust, the insurance licenseeG must obtain and record the following information from original identification documents, databases or websites, in hard copy or electronic form, to identify the customerG and to take reasonable measures to verify its identity, legal existence and structure:

            (a) The entity's full name and other trading names used;
            (b) Registration number (or equivalent);
            (c) Legal form and proof of existence;
            (d) Registered address and trading address (where applicable);
            (e) Type of business activity;
            (f) Date and place of incorporation or establishment;
            (g) Telephone, fax number and email address;
            (h) Regulatory body or listing body (for regulated activities such as financial services and listed companies);
            (hh) The names of the relevant persons having a senior management position in the legal entity or legal arrangement;
            (i) Name of external auditorG (where applicable);
            (j) Type of policy, and nature and volume of anticipated business dealings with the insurance licenseeG ; and
            (k) Source of funds for payment of premium.
            Amended: October 2017
            Amended: January 2007

          • FC-1.2.8

            The information provided under FC-1.2.7 must be verified by obtaining certified copies of the following documents, as applicable (depending on the legal form of the entity):

            (a) Certificate of incorporation and/or certificate of commercial registration or trust deed;
            (b) Memorandum of association;
            (c) Articles of association;
            (d) Partnership agreement;
            (e) Board resolution seeking the insurance services (only necessary in the case of private or unlisted companies);
            (f) Identification documentation of the authorised signatories of the insurance contract;
            (g) Copy of the latest financial report and accounts, audited where possible (audited copies do not need to be certified); and
            (h) List of authorised signatories of the company for the insurance contract and a Board resolution (or other applicable document) authorising the named signatories or their agent to receive any proceeds from the insurance contract or to modify the terms of the contract (resolution only necessary for private or unlisted companies).
            Amended: January 2007

          • FC-1.2.8A

            For customers that are legal persons, Insurance licenseesG must identify and take reasonable measures to verify the identity of beneficial owners through the following information:

            (a) The identity of the natural person(s) who ultimately have a controlling ownership interest in a legal person, and
            (b) To the extent that there is doubt under (a) as to whether the person(s) with the controlling ownership interest is the beneficial owner(s), or where no natural person exerts control of the legal person or arrangement through other means; and
            (c) Where no natural person is identified under (a) or (b) above, the identity of the relevant natural person who holds the position of senior managing official.
            Amended: October 2017
            Amended: January 2007

          • FC-1.2.9

            Documents obtained to satisfy the requirements in FC-1.2.8 above must be certified in the manner specified in FC-1.2.4 to FC-1.2.6.

          • FC-1.2.9A

            For the purpose of Paragraph FC-1.2.8(a), the requirement to obtain a certified copy of the commercial registration, may be satisfied by obtaining a commercial registration abstract printed directly from the Ministry of Industry, Commerce and Tourism's website, through "SIJILAT Commercial Registration Portal".

            Added: January 2017

          • FC-1.2.10

            The documentary requirements in FC-1.2.8 above do not apply in the case of FATF/GCC listed companies: see Section FC-1.6 below. Also, the documents listed in FC-1.2.8 above are not exhaustive: for customersG from overseas jurisdictions, documents of an equivalent nature may be produced as satisfactory evidence of a customer'sG identity.

            Amended: January 2007

          • FC-1.2.11

            Insurance licenseesG must also obtain and document the following due diligence information. These due diligence requirements must be incorporated in the licensee's new business procedures:

            (a) Enquire as to the structure of the legal entity or trust sufficient to determine and verify the identity of the ultimate provider of funds and ultimate controller of the funds (if different);
            (b) Ascertain whether the legal entity has been or is in the process of being wound up, dissolved, struck off or terminated;
            (c) Obtain the names, country of residence and nationality of Directors or partners (only necessary for private or unlisted companies, and for trustees in the case of trusts);
            (d) Require, through new customer documentation or other transparent means, updates on significant changes to corporate ownership and/or legal structure;
            (e) Obtain and verify the identity of shareholdersG holding 20% or more of the issued capital (where applicable). The requirement to verify the identity of these shareholdersG does not apply in the case of FATF/GCC listed companies;
            (f) In the case of trusts or similar arrangements, establish the identity of the settlor(s), trustee(s), and beneficiaries (including making such reasonable enquiries as to ascertain the identity of any other potential beneficiary, in addition to the named beneficiaries of the trust); and
            (g) Where a licensee has reasonable grounds for questioning the authenticity of the information supplied by a customerG , conduct additional due diligence to confirm the above information.
            Amended: January 2007

          • FC-1.2.12

            For the purposes of Paragraph FC-1.2.11, acceptable means of undertaking such due diligence might include taking bank references; visiting or contacting the company by telephone; undertaking a company search or other commercial enquiries; accessing public and private databases (such as stock exchange lists); making enquiries through a business information service or credit bureau; confirming a company's status with an appropriate legal or accounting firm; or undertaking other enquiries that are commercially reasonable.

          • FC-1.2.13

            In the case of group insurance policies (such as group life or medical insurance), customer identification may be limited to the principal shareholdersG and Directors of the contracting company.

            Amended: January 2007

      • FC-1.3 Enhanced Customer Due Diligence: General Requirements

        • FC-1.3.1

          Enhanced customer due diligence must be performed on those customersG identified as having a higher risk profile, and additional inquiries made or information obtained in respect of those customersG .

          Amended: January 2007

        • FC-1.3.2

          The additional information referred to in Paragraph FC-1.3.1 might include documents (either in hard copy or electronic format) relating to the following:

          (a) Evidence of a person's permanent address through the use of a credit reference agency search or through independent verification by home visit;
          (b) A personal reference (e.g. by an existing customerG of the insurance licenseeG );
          (c) Another licensed entity's reference and contact with the concerned licensee regarding the customerG ;
          (d) Documentation outlining the customer'sG source of wealth;
          (e) Documentation outlining the customer'sG source of income; and
          (f) Independent verification of employment, or public position held.
          Amended: January 2007

        • FC-1.3.3

          In addition to the general Rule contained in Paragraph FC-1.3.1 above, special care is required in the circumstances specified in Sections FC-1.4 to FC-1.5 inclusive.

          Amended: January 2007

      • FC-1.4 Enhanced Customer Due Diligence: Non face-to-face Business and New Technologies

        • FC-1.4.1

          Insurance licenseesG must establish specific procedures for verifying customerG identity where no face-to-face contact takes place.

          Amended: January 2007

        • FC-1.4.2

          Where no face-to-face contact takes place, insurance licenseesG must take additional measures (to those specified in Section FC-1.2), in order to mitigate the potentially higher risk associated with such business. In particular, insurance licenseesG must take measures:

          (a) To ensure that the customerG is the person they claim to be; and
          (b) To ensure that the address provided is genuinely the customer'sG .
          Amended: January 2007

        • FC-1.4.3

          There are a number of checks that can provide an insurance licenseeG with a reasonable degree of assurance as to the authenticity of the applicant. They include:

          (a) Telephone contact with the applicant on an independently verified home or business number;
          (b) With the customer'sG consent, contacting an employer to confirm employment, via phone through a listed number or in writing; and
          (c) Requiring a premium payment to be made from an account in the customer'sG name at a bank having equivalent CDD standards.
          Amended: January 2007

        • FC-1.4.4

          Financial services provided via post, telephone or internet pose greater challenges for customerG identification and AML/CFTG purposes. Insurance licenseesG must establish procedures to prevent the misuse of technological developments in money laundering or terrorist financing schemes. Insurance licenseesG must also ensure that they comply with any e-commerce laws and/or CBB Modules issued from time to time.

          Amended: January 2007

        • FC-1.4.5

          Insurance licenseesG must identify and assess the money laundering or terrorist financing risks that may arise in relation to:

          (a) The development of new products and new business practices, including new delivery mechanisms; and
          (b) The use of new or developing technologies for both new and pre-existing products.
          Added: October 2015

        • FC-1.4.6

          For purposes of Paragraph FC-1.4.5, such a risk assessment must take place prior to the launch of the new products, business practices or the use of new or developing technologies. Insurance licenseesG must take appropriate measures to manage and mitigate those risks.

          Added: October 2015

      • FC-1.5 Enhanced Customer Due Diligence: Politically Exposed Persons ('PEPs')

        • FC-1.5.1

          Insurance licenseesG must have appropriate risk management systems to determine whether a customerG or beneficial owner is a Politically Exposed Person ('PEP')G , both at the time of establishing business relations and thereafter on a periodic basis. Licensees must utilise publicly available databases and information to establish whether a customer is a PEPG .

          Amended: July 2016
          Amended: October 2015
          Amended: January 2007
          Amended: October 2007

        • FC-1.5.2

          Insurance licenseesG must establish a client acceptance policy with regard to PEPs, taking into account the reputational and other risks involved. Senior management approval must be obtained before a PEP is accepted as a customerG .

          Amended: January 2007

        • FC-1.5.3

          Where an existing customerG is a PEPG , or subsequently becomes a PEP, enhanced monitoring and customer due diligence measures must include:

          (a) Analysis of complex financial structures, including trusts, foundations or international business corporations;
          (b) A written record in the customerG file to establish that reasonable measures have been taken to establish both the source of wealth and the source of funds;
          (c) Development of a profile of anticipated customerG activity, to be used in on-going monitoring;
          (d) Approval of senior management for allowing the customerG relationship to continue; and
          (e) On-going account monitoring of the PEP'sG account by senior management (such as the MLRO).
          Amended: January 2007

        • FC-1.5.3A

          In cases of higher risk business relationships with such persons, mentioned in Paragraph FC-1.5.1, insurance licenseesG must apply the measures referred to in Subparagraphs FC-1.5.3 (b), (d) and (e).

          Added: October 2015

        • FC-1.5.3B

          The requirements for all types of PEPG must also apply to family or close associates of such PEPsG .

          Added: October 2015

        • FC-1.5.3C

          For the purpose of Paragraph FC-1.5.3B, 'family' means spouse, father, mother, sons, daughters, sisters and brothers. 'Associates' are persons associated with a PEPG whether such association is due to the person being an employee or partner of the PEPG or of a firm represented or owned by the PEPG , or family links or otherwise.

          Added: October 2015

        • FC-1.5.4

          [This Paragraph was deleted in July 2016 as definition is included under Part B in the Glossary.]

          Deleted: July 2016
          Amended: October 2015
          Amended: January 2007

        • FC-1.5.5

          In relation to life insurance policies, insurance licenseesG must take reasonable measures to determine whether the beneficiaries and/or, where required, the beneficial owner of the beneficiaryG , are PEPs. This must occur, at the latest, at the time of the payout.

          Added: January 2018

        • FC-1.5.6

          Where higher risks are identified, senior managementG must be informed before the payout of the policy proceeds, in order to conduct enhanced scrutiny on the whole business relationship with the policyholder, and to consider making a suspicious transaction report.

          Added: January 2018

      • FC-1.6 Simplified Customer Due Diligence

        • FC-1.6.1

          Insurance licenseesG may apply simplified customer due diligence measures, as described in Paragraphs FC-1.6.2 to FC-1.6.8, if:

          (a) The customerG is the Central Bank of Bahrain ('CBB'), the Bahrain Bourse ('BHB') or a licensee of the CBB;
          (b) The customerG is a Ministry of a Gulf Cooperation Council ('GCC') or Financial Action Task Force ('FATF') member state government, a company in which a GCC government is a majority shareholderG , or a company established by decree in the GCC;
          (c) The customerG is a company listed on a GCC or FATF member state stock exchange with equivalent disclosure standards to those of the BHB;
          (d) The customerG is a financial institution whose entire operations are subject to AML/CFTG requirements consistent with the FATF Recommendations and it is supervised by a financial services supervisor in a FATF or GCC member state for compliance with those requirements;
          (e) The customerG is a financial institution that is a subsidiaryG of a financial institution located in a FATF or GCC member state, and the AML/CFTG requirements applied to its parent also apply to the subsidiary; or
          (f) [This Subparagraph was deleted in January 2018].
          (g) The transaction is a long-term insurance contract, either taken out in connection with a pension scheme relating to the customer'sG employment or occupation, or contains a no surrender clause and cannot be used as security for a loan.
          Amended: January 2019
          Amended: January 2018
          Amended: October 2015
          Amended: January 2007

        • FC-1.6.2

          For customersG falling under the categories (a) to (e) specified in Paragraph FC-1.6.1, the information required under Paragraph FC-1.2.1 (for natural persons) or FC-1.2.7 (for legal entities or legal arrangements such as trusts) must be obtained. However, the verification and certification requirements in Paragraphs FC-1.2.3 and FC-1.2.8, and the due diligence requirements in Paragraph FC-1.2.11, may be dispensed with.

          Amended: January 2007

        • FC-1.6.3

          [This Paragraph was deleted in July 2018].

          Deleted: July 2018
          Amended: January 2007

        • FC-1.6.4

          Insurance licenseesG wishing to apply simplified due diligence measures as allowed for under Paragraph FC-1.6.1 must retain documentary evidence supporting their categorisation of the customerG .

          Amended: January 2007

        • FC-1.6.5

          Examples of such documentary evidence may include a printout from a regulator's website, confirming the licensed status of an institution, and internal papers attesting to a review of the AML/CFTG measures applied in a jurisdiction.

        • FC-1.6.6

          For customersG coming under Paragraph FC-1.6.1 (e), licensees must also obtain and retain a written statement from the parent institution of the subsidiaryG concerned, confirming that the subsidiaryG is subject to the same AML/CFTG measures as its parentG .

          Amended: January 2007

        • FC-1.6.7

          [This Paragraph was deleted in January 2007]

          Deleted: January 2007

        • FC-1.6.8

          Simplified customer due diligence measures must not be applied where a licensee knows, suspects, or has reason to suspect, that the applicant is engaged in money laundering or terrorism financing or that the transaction is carried out on behalf of another person engaged in money laundering or terrorism financing.

        • FC-1.6.9

          [This Paragraph was deleted in July 2018].

          Deleted: July 2018

        • FC-1.6.10

          [This Paragraph was deleted in July 2018].

          Deleted: July 2018
          Amended: January 2007

      • FC-1.7 Introduced Business from Professional Intermediaries

        • FC-1.7.1

          Insurance licenseesG may only accept customersG introduced to them by other financial institutions or intermediaries, if they have satisfied themselves that the financial institution or intermediary concerned is subject to FATF-equivalent measures and customer due diligence measures. Where an insurance licenseeG delegates part of the customer due diligence measures to another financial institution or intermediary, the responsibility for meeting the requirements of this Chapter remains with the insurance licenseeG , not the third party.

          Amended: January 2018
          Amended: January 2007

        • FC-1.7.2

          Insurance licenseesG may only accept introduced business if all of the following conditions are satisfied:

          (a) The customer due diligence measures applied by the introducer are consistent with those required by the FATF Recommendations;
          (b) A formal agreement is in place defining the respective roles of the licensee and the introducer in relation to customer due diligence measures. The agreement must specify that the customer due diligence measures of the introducer will comply with the FATF Recommendations;
          (c) The introducer is able to provide all relevant data pertaining to the customer'sG identity, the identity of the policyholderG and beneficiary of the policy and, where applicable, the party/parties on whose behalf the customerG is acting; also, the introducer has confirmed that the licensee will be allowed to verify the customer due diligence measures undertaken by the introducer at any stage; and
          (d) Written confirmation is provided by the introducer confirming that all customer due diligence measures required by the FATF Recommendations have been followed and the customer'sG identity established and verified. In addition, the confirmation must state that any identification documents or other customer due diligence material can be accessed by the insurance licenseeG and that these documents will be kept for at least five years after the policy relationship has ended.
          Amended: October 2015
          Amended: January 2007
          Amended: October 2007
          Amended: April 2008

        • FC-1.7.3

          The insurance licenseeG must perform periodic reviews ensuring that any introducer on which it relies is in compliance with the FATF Recommendations. Where the introducer is resident in another jurisdiction, the insurance licenseeG must also require the introducer to perform periodic reviews to verify whether the jurisdiction is in compliance with the FATF Recommendations.

          Amended: October 2015

        • FC-1.7.4

          Should the insurance licenseeG not be satisfied that the introducer is in compliance with the requirements of the FATF Recommendations, the licensee must conduct its own customer due diligence or not accept or continue the business relationship.

          Amended: October 2015

    • FC-2 AML / CFT Systems and Controls

      • FC-2.1 General Requirements

        • FC-2.1.1

          Insurance licenseesG must implement programmes against money laundering and terrorist financing which establish and maintain appropriate systems and controls for compliance with the requirements of this Module and which limit their vulnerability to financial crime. These systems and controls must be documented, and approved and reviewed annually by the Board of the licensee. The documentation, and the Board's review and approval, must be made available upon request to the CBB.

          Amended: October 2015
          Amended: January 2007

        • FC-2.1.2

          Where the insurance licenseeG is an unincorporated entity, the annual review and approval should be undertaken by the most senior person with oversight responsibilities for the licensee, such as its General ManagerG or managing partner.

          Amended: October 2007

        • FC-2.1.3

          The above systems and controls, and associated documented policies and procedures, should cover standards for customer acceptance, on-going monitoring of high-risk accounts, staff training and adequate screening procedures to ensure high standards when hiring employees.

          Amended: October 2007

      • FC-2.2 On-going Customer Due Diligence and Transaction Monitoring

        • Risk-Based Monitoring

          • FC-2.2.1

            Insurance licenseesG must develop risk-based monitoring systems appropriate to the complexity of their business, their number of clients and types of transactions. These systems must be configured to identify significant or abnormal transactions or patterns of activity. Such systems must include limits on the number, types or size of transactions undertaken outside expected norms; and must include limits for cash and non-cash transactions.

          • FC-2.2.2

            Insurance licensees'G risk-based monitoring systems should therefore be configured to help identify:

            (a) Transactions which do not appear to have a clear purpose or which make no obvious economic sense;
            (b) Significant or large transactions not consistent with the normal or expected behaviour of a customerG ; and
            (c) Unusual patterns of activity (relative to other customersG of the same profile or of similar types of transactions, for instance because of differences in terms of volumes, transaction type, or flows to or from certain countries), or activity outside the expected or regular patter of a customer'sG account activity.
            Amended: January 2007

        • Automated Transaction Monitoring

          • FC-2.2.3

            Insurance licenseesG must consider the need to include automated transaction monitoring as part of their risk-based monitoring systems. In the absence of automated transaction monitoring systems, all transactions above BD 6,000 must be viewed as 'significant' and be captured in a daily transactions report for monitoring by the MLRO or a relevant delegated official, and records retained by the insurance licenseeG for five years after the date of the transaction.

            Amended: January 2007
            Amended: October 2007
            Amended: April 2008

          • FC-2.2.4

            The CBB would expect larger insurance licenseesG to include automated transaction monitoring as part of their risk-based monitoring systems. See also Chapters FC-3 and FC-6, regarding the responsibilities of the MLRO and record-keeping requirements.

            Amended: January 2007

        • Unusual Transactions or Customer Behaviour

          • FC-2.2.5

            In instances where an insurance licensee'sG risk-based monitoring systems identify significant or abnormal transactions (as defined in FC-2.2.2 and FC-2.2.3), it must verify the source of funds for those transactions, particularly where the transactions are above the occasional transactions threshold of BD 6,000. Furthermore, insurance licenseesG must examine the background and purpose to those transactions and document their findings.

          • FC-2.2.6

            The investigations required under FC-2.2.5 must be carried out by the MLRO (or relevant delegated official). The documents relating to these findings must be maintained for five years from the date when the transaction was completed (see also FC-6.1.1(b)).

            Amended: October 2007
            Amended: April 2008

          • FC-2.2.7

            Insurance licenseesG must consider instances where there is a significant, unexpected or unexplained change in the behaviour of policyholders'G account (e.g., early surrenders). Insurance licenseesG must be extra vigilant to the particular risks involved in the buying and selling of second hand endowment policies, as well as the use of single premium unit-linked policies. Insurance licenseesG must check any reinsurance or retrocession to ensure that monies are paid to bona fide reinsurance entities at rates commensurate with the risks underwritten.

            Amended: January 2007

          • FC-2.2.8

            When an existing customerG cancels a policy and applies for another, the insurance licenseeG must review its customer identity information and update its records accordingly. Where the information available falls short of the requirements contained in Chapter FC-1, the missing or out of date information must be obtained and re-verified with the customerG .

            Amended: January 2007

          • FC-2.2.9

            Once identification procedures have been satisfactorily completed and, as long as records concerning the customerG are maintained in line with Chapters FC-1 and FC-6, no further evidence of identity is needed when transactions are subsequently undertaken within the expected level and type of activity for that customerG , provided reasonably regular contact has been maintained between the parties and no doubts have arisen as to the customer'sG identity.

            Amended: January 2007

        • On-going Monitoring

          • FC-2.2.10

            Insurance licenseesG must take reasonable steps to:

            (a) Scrutinize transactions undertaken throughout the course of that relationship to ensure that transactions being conducted are consistent with the Insurance licensee'sG knowledge of the customer, their business risk and risk profile; and
            (b) Ensure that they receive and maintain up-to-date and relevant copies of the identification documents specified in Chapter FC-1, by undertaking reviews of existing records, particularly for higher risk categories of customers. Insurance licenseesG must require all customersG to provide up-to-date identification documents in their standard terms and conditions of business.
            Amended: October 2017
            Amended: January 2007

          • FC-2.2.11

            Insurance licenseesG must review and update their customer due diligence information at least every three years, particularly for higher risk categories of customers. If, upon performing such a review, copies of identification documents are more than 12 months out of date, the insurance licenseeG must take steps to obtain updated copies as soon as possible.

            Amended: October 2017

    • FC-3 Money Laundering Reporting Officer

      • FC-3.1 Appointment of MLRO

        • FC-3.1.1

          Insurance firmsG (except captive insurance firmsG managed by an insurance managerG ), insurance brokersG and insurance managersG (that manage a captive insurance firmG ) must appoint a Money Laundering Reporting Officer ('MLRO'). In the case of insurance managersG that manage captive insurance firmsG , the insurance managerG must appoint a MLRO for each of the captive insurance firmsG under its management.

          Amended: January 2007
          Amended: October 2007

        • FC-3.1.2

          Insurance managersG may nominate the same individual to act as MLRO for more than one captive insurance firmG , providing this person can meet in full the responsibilities of MLRO for each captive insurance firmG in question.

          Amended: January 2007

        • FC-3.1.3

          The position of MLRO is a controlled functionG and the MLRO is an approved personG .

        • FC-3.1.4

          For details of the CBB's requirements regarding controlled functionsG and approved personsG , see Section AU-1.2. Amongst other things, approved personsG require CBB approval before being appointed, which is granted only if they are assessed as 'fit and proper' for the function in question. A completed Form 3 must accompany any request for CBB approval.

          Amended: January 2007

        • FC-3.1.5

          The position of MLRO must not be combined with functions that create potential conflicts of interest, such as an internal auditor or business line head. The position of MLRO may not be outsourced.

        • FC-3.1.6

          Subject to Paragraph FC-3.1.5, however, the position of MLRO may otherwise be combined with other functions in the insurance licenseeG , such as that of Compliance Officer, in cases where the volume and geographical spread of the business is limited and, therefore, the demands of the function are not likely to require a full time resource. Paragraph FC-3.1.9 requires that the MLRO is a DirectorG or employeeG of the licensee, so the function may not be outsourced to a third party employee.

          Amended: January 2007
          Amended: October 2007

        • FC-3.1.6A

          For purposes of Paragraphs FC-3.1.5 and FC-3.1.6 above, insurance licenseesG must clearly state in the Application for Approved Person Status — Form 3 — when combining the MLRO or DMLRO position with any other position within the insurance licenseeG .

          Added: October 2017

        • FC-3.1.7

          Insurance licenseesG must appoint at least one deputy MLRO (or more depending on the scale and complexity of the licensee's operations). The deputy MLRO(s) must be resident in Bahrain unless otherwise agreed with the CBB.

          Amended: January 2007

        • FC-3.1.7A

          The deputy MLRO should be able to support the MLRO discharge his responsibilities and to deputise for him in his absence. In the case of insurance licenseesG undertaking significant overseas business, the CBB would normally expect to see one or more deputy MLRO(s) residing in the jurisdiction(s) where the bulk of the customer business is processed. In such cases, the CBB would normally agree to an application for an exemption from the residency requirement in Rule FC-3.1.7.

          Amended: January 2007

        • FC-3.1.8

          Insurance licenseesG should note that although the MLRO may delegate some of his functions, either to other employees of the licensee or even (in the case of larger groups) to individuals performing similar functions for other group entities, that the responsibility for compliance with the requirements of this Module remains with the licensee and the designated MLRO.

          Amended: January 2007

        • FC-3.1.9

          So that he can carry out his controlled functionG effectively, insurance licenseesG must ensure that their MLRO:

          (a) Is a member of senior management of the licensee;
          (b) Has a sufficient level of seniority within the insurance licenseeG , has the authority to act without interference from business line management and has direct access to the Board and senior management (where necessary);
          (c) Has sufficient resources, including sufficient time and (if necessary) support staff, and has designated a replacement to carry out the function should the MLRO be unable to perform his duties;
          (d) Has unrestricted access to all transactional information relating to any financial services provided by the insurance licenseeG to a customerG , or any transactions conducted by the insurance licenseeG on behalf of that customerG ;
          (e) Is provided with timely information needed to identify, analyse and effectively monitor customerG accounts;
          (f) Has access to all customerG due diligence information obtained by the insurance licenseeG ; and
          (g) Is resident in Bahrain.
          Amended: October 2011
          Amended: January 2007
          Amended: October 2007

        • FC-3.1.10

          In addition, insurance licenseesG must ensure that their MLRO is able to:

          (a) Monitor the day-to-day operation of their policies and procedures relevant to this Module; and
          (b) Respond promptly to any reasonable request for information made by the Financial Intelligence Unit or the CBB.
          Amended: April 2010
          Amended: October 2007
          Amended: January 2007

        • FC-3.1.11

          If the position of MLRO falls vacant, the insurance licenseeG must appoint a permanent replacement (after obtaining CBB approval), within 120 calendar days of the vacancy occurring. Pending the appointment of a permanent replacement, the licensee must make immediate interim arrangements (including the appointment of an acting MLRO) to ensure continuity in the MLRO function's performance. These interim arrangements must be approved by the CBB.

          Amended: January 2007

      • FC-3.2 Responsibilities of the MLRO

        • FC-3.2.1

          The MLRO is responsible for:

          (a) Establishing and maintaining the insurance licensee'sG AML/CFTG policies and procedures;
          (b) Ensuring that the licensee complies with the AML Law and any other applicable AML/CFTG legislation and this Module;
          (c) Ensuring day-to-day compliance with the licensee's own internal AML/CFTG policies and procedures;
          (d) Acting as the insurance licensee'sG main point of contact in respect of handling internal suspicious transactions reports from the licensee's staff (refer to Section FC-4.1) and as the main contact for the Financial Intelligence Unit, the CBB and other concerned bodies regarding AML/CFTG ;
          (e) Making external suspicious transactions reports to the Financial Intelligence Unit and Compliance Directorate (refer to Section FC-4.2);
          (f) Taking reasonable steps to establish and maintain adequate arrangements for staff awareness and training on AML/CFTG matters (whether internal or external), as per Chapter FC-5;
          (g) Producing annual reports on the effectiveness of the licensee's AML/CFTG controls, for consideration by senior management, as per Paragraph FC-3.3.3;
          (h) On-going monitoring of what may, in his opinion, constitute high-risk customerG accounts; and
          (i) Ensuring that the insurance licenseeG maintains all necessary CDD, transactions, STR and staff training records for the required periods (refer to Section FC-6.1).
          Amended: October 2015
          Amended: April 2010
          Amended: January 2007

      • FC-3.3 Compliance Monitoring

        • Annual Compliance Review

          • FC-3.3.1

            Insurance licenseesG must take appropriate steps to identify and assess their money laundering and terrorist financing risks (for customers, countries or geographic areas; and products, services, transactions or delivery channels). They must document those assessments in order to be able to demonstrate their basis, keep these assessments up to date, and have appropriate mechanisms to provide risk assessment information to the CBB. The nature and extent of any assessment of money laundering and terrorist financing risks must be appropriate to the nature and size of the business.

            Added: October 2015

          • FC-3.3.1A

            Insurance licenseesG should always understand their money laundering and terrorist financing risks, but the CBB may determine that individual documented risk assessments are not required, if the specific risks inherent to the sector are clearly identified and understood.

            Added: October 2015

          • FC-3.3.1B

            An insurance licenseeG must review the effectiveness of its AML/CFTG procedures, systems and controls at least once each calendar year. The review must cover the licensee and its branchesG and subsidiariesG both inside and outside the Kingdom of Bahrain. The scope of the review must include:

            (a) A report, containing the number of internal reports made in accordance with Section FC-4.1, a breakdown of all the results of those internal reports and their outcomes for each segment of the licensee's business, and an analysis of whether controls or training need to be enhanced;
            (b) A report, indicating the number of external reports made in accordance with Section FC-4.2 and, where an insurance licenseeG has made an internal report but not made an external report, noting why no external report was made;
            (c) A sample test of compliance with this Module's customer due diligence requirements; and
            (d) A report as to the quality of the licensee's anti-money laundering procedures, systems and controls, and compliance with the AML Law and this Module.
            Amended: October 2015
            Amended: January 2007
            Amended: October 2007

          • FC-3.3.2

            The reports listed under Paragraph FC-3.3.1B (a) and (b) must be made by the MLRO. The sample testing required under Paragraph FC-3.3.1B (c) must be undertaken either by the licensee's internal auditor, its external auditorG or a consultancy firm approved by the CBB. The report required under Paragraph FC-3.3.1B (d) must be made by the licensee's external auditorG or a consultancy firm approved by the CBB.

            Amended: January 2019
            Amended: October 2011
            Amended: January 2007
            Amended: October 2007

          • FC-3.3.2A

            In order for a consultancy firm to be approved by the CBB for the purposes of Paragraph FC-3.3.2, such firm should provide the CBB's Compliance Directorate with:

            (a) A sample AML/CFT report prepared for a financial institution;
            (b) A list of other AML/CFT related work undertaken by the firm;
            (c) A list of other audit/review assignments undertaken, specifying the nature of the work done, date and name of the licensee; and
            (d) An outline of any assignment conducted for or in cooperation with an international audit firm.
            Added: October 2011

          • FC-3.3.2B

            The firm should indicate which personnel (by name) will work on the report (including, where appropriate, which individual will be the team leader) and demonstrate that all such persons have appropriate qualifications in one of the following areas:

            (a) Audit;
            (b) Accounting;
            (c) Law; or
            (d) Banking/Finance.
            Added: October 2011

          • FC-3.3.2C

            At least two persons working on the report (one of whom would normally expected to be the team leader) should have:

            (a) A minimum of 5 years professional experience dealing with AML/CFT issues; and
            (b) Formal AML/CFT training.
            Added: October 2011

          • FC-3.3.2D

            Submission of a curriculum vitae for all personnel to be engaged on the report is encouraged for the purposes of evidencing the above requirements.

            Added: October 2011

          • FC-3.3.2E

            Upon receipt of the above required information, the CBB Compliance Directorate will assess the firm and communicate to it whether it meets the criteria required to be approved by the CBB for this purpose. The CBB may also request any other information it considers necessary in order to conduct the assessment.

            Added: October 2011

          • FC-3.3.3

            The items listed under Paragraph FC-3.3.1B must be submitted to the licensee's Board, for it to review and commission any required remedial measures, and copied to the licensee's senior management.

            Amended: January 2019

          • FC-3.3.4

            The purpose of the annual compliance review is to assist a licensee's Board and senior management to assess, amongst other things, whether internal and external reports are being made (as required under Chapter FC-4), and whether the overall number of such reports (which may otherwise appear satisfactory) does not conceal inadequate reporting in a particular segment of the licensee's business (or, where relevant, in particular branchesG or subsidiariesG ). Licensees should use their judgement as to how the reports listed under Paragraph FC-3.3.1B (a) and (b) should be broken down in order to achieve this aim (e.g. by branches, departments and product lines).

            Amended: January 2019
            Amended: January 2007

          • FC-3.3.5

            Insurance licenseesG must instruct their appointed firm to produce the report referred to in Paragraph FC-3.3.1B (d). Except as noted under Paragraph FC-3.3.5A, the report must be submitted to the CBB by the 30th of April of the following year. The findings of this review must be received and acted upon by the licensee.

            Amended: January 2019
            Amended: January 2012
            Amended: October 2007
            Amended: January 2007

          • FC-3.3.5A

            [This Paragraph was deleted in January 2019].

            Deleted: January 2019
            Added: January 2007

          • FC-3.3.6

            The appointed firm may rely upon work performed by the licensee's internal audit function, as part of their procedures for producing the statement referred to in Paragraph FC-3.3.5.

            Amended: January 2012
            Amended: October 2007

          • FC-3.3.7

            The four reports referred to in Paragraph FC-3.3.1B must be submitted to the Director, Compliance Directorate of the CBB by the 30th of April of the following year.

            Added: January 2007
            Amended: April 2008
            Amended: January 2019

    • FC-4 Suspicious Transaction Reporting

      • FC-4.1 Internal Reporting

        • FC-4.1.1

          Insurance licenseesG must implement procedures to ensure that staff who handle customerG business (or are managerially responsible for such staff) make a report promptly to the MLRO if they know or suspect that a customerG (or a person on whose behalf a customerG may be acting) is engaged in money laundering or terrorism financing, or if the transaction or customer'sG conduct otherwise appears unusual or suspicious. These procedures must include arrangements for disciplining any member of staff who fails, without reasonable excuse, to make such a report.

          Amended: January 2007

        • FC-4.1.2

          Suspicious transaction or conduct may include a claim made in suspicious circumstances, a policy surrendered soon after inception or in circumstances that would otherwise appear contrary to the interests of a reasonable policyholderG . If a prospective policyholderG does not pursue an application, this may be considered suspicious in itself. Item FC (iv) in Part B of Volume 3 (Insurance) provides further examples of transactions that may be suspicious or unusual.

          Amended: January 2007

        • FC-4.1.3

          Where insurance licensees'G internal processes provide for staff to consult with their line managers before sending a report to the MLRO, such processes must not be used to prevent reports reaching the MLRO, where staff have stated that they have knowledge or suspicion that a transaction may involve money laundering or terrorist financing.

      • FC-4.2 External Reporting

        • FC-4.2.1

          Insurance licenseesG must take reasonable steps to ensure that all reports made under Section FC-4.1 are considered by the MLRO (or his duly authorised delegate). Having considered the report and any other relevant information, if the MLRO (or his duly authorised delegate) still suspects that a person has been engaged in money laundering or terrorism financing, or the activity concerned is otherwise still regarded as suspicious, he must report the fact promptly to the relevant authoritiesG . Where no report is made, the MLRO must document the reasons why.

          Amended: January 2007

        • FC-4.2.2

          To take reasonable steps, as required under Paragraph FC-4.2.1, insurance licenseesG must:

          (a) Require the MLRO to consider reports made under Section FC-4.1 in the light of all relevant information accessible to or reasonably obtainable by the MLRO;
          (b) Permit the MLRO to have access to any information, including know your customer information, in the insurance licensee'sG possession which could be relevant; and
          (c) Ensure that where the MLRO, or his duly authorised delegate, suspects that a person has been engaged in money laundering or terrorist financing, a report is made by the MLRO which is not subject to the consent or approval of any other person.
          Amended: January 2007

        • FC-4.2.3

          Reports to the relevant authoritiesG made under Paragraph FC-4.2.1 must be sent to the Financial Intelligence Unit at the Ministry of Interior and the CBB's Compliance Directorate using the Suspicious Transaction Reporting Online System (Online STR system). STRs in paper format will not be accepted.

          Amended: July 2016
          Amended: October 2014
          Amended: April 2010
          Amended: January 2007

        • FC-4.2.4

          Insurance licenseesG must report all suspicious transactions or attempted transactions. This reporting requirement applies regardless of whether the transaction involves tax matters.

        • FC-4.2.5

          Insurance licenseesG must retain all relevant details of STRs submitted to the relevant authoritiesG , for at least five years.

          Amended: October 2014
          Amended: October 2007
          Amended: April 2008

        • FC-4.2.6

          In accordance with the AML Law, insurance licenseesG , their DirectorsG , officers and employeesG :

          (a) Must not warn or inform ('tipping off') the policyholderG , beneficiary or other subjects of the STR when information relating to them is being reported to the relevant authoritiesG ; and
          (b) In cases where insurance licenseesG form a suspicion that transactions relate to money laundering or terrorist financing, they must take into account the risk of tipping-off when performing the CDD process. If the insurance licenseeG reasonably believes that performing the CDD process will tip-off the customer or potential customer, it may choose not to pursue that process, and must file an STR.
          Amended: January 2018
          Amended: January 2007
          Amended: October 2007

      • FC-4.3 Contacting the Relevant Authorities

        • FC-4.3.1

          Reports made by the MLRO or his duly authorised delegate under Section FC-4.2 must be sent electronically using the Suspicious Transaction Reporting Online System (Online STR system).

          Amended: October 2014
          Amended: April 2010
          Amended: January 2007

        • FC-4.3.2

          The relevant authoritiesG are:

          Financial Intelligence Directorate (FID)
          General Directorate of Anti Corruption and Economic and Electronic Security
          Ministry of Interior
          P.O. Box 26698
          Manama, Kingdom of Bahrain
          Telephone: + 973 17 749397
          Fax: + 973 17 715502
          E-mail: bahrainfid@moipolice.bh

          Director of the Compliance Directorate
          Central Bank of Bahrain
          P.O. Box 27
          Manama, Kingdom of Bahrain
          Telephone: 17 547107
          Fax: 17 535673
          E-mail: Compliance@cbb.gov.bh

          Added: October 2014

    • FC-5 Staff Training and Recruitment

      • FC-5.1 General Requirements

        • FC-5.1.1

          An insurance licenseeG must take reasonable steps to provide periodic training and information to ensure that staff who handle customerG transactions, or are managerially responsible for such transactions, are made aware of:

          (a) Their responsibilities under the AML Law, this Module, and any other relevant AML/CFTG laws and Regulations;
          (b) The identity and responsibilities of the MLRO and his deputy;
          (c) The potential consequences, both individual and corporate, of any breach of the AML Law, this Module and any other relevant AML/CFTG laws or Regulations;
          (d) The insurance licensee'sG current AML/CFTG policies and procedures;
          (e) Money laundering and terrorist financing typologies and trends;
          (f) The type of customerG activity or transaction that may justify an internal STR;
          (g) The insurance licensee'sG procedures for making internal STRs; and
          (h) Customer due diligence measures with respect to establishing business relations with customersG .
          Amended: January 2007

        • FC-5.1.2

          The information referred to in Paragraph FC-5.1.1 must be brought to the attention of relevant new employeesG of insurance licenseesG , and must remain available for reference by staff during their period of employment and by the CBB.

          Amended: January 2007

        • FC-5.1.3

          Relevant new employeesG must be given AML/CFTG training within three months of joining an insurance licenseeG .

          Amended: January 2007

        • FC-5.1.4

          Insurance licenseesG must ensure that their AML/CFTG training for relevant staff remains up-to-date, and is appropriate given the licensee's activities and customerG base.

          Amended: January 2007

        • FC-5.1.5

          The CBB would normally expect AML/CFTG training to be provided to relevant staff at least once a year.

          Amended: January 2007

        • FC-5.1.6

          Insurance licenseesG must develop adequate screening procedures to ensure high standards when hiring employeesG . These procedures must include controls to prevent criminals or their associates from being employed by licensees.

          Amended: January 2007

    • FC-6 Record-keeping Arrangements

      • FC-6.1 General Requirements

        • Policyholder/Transaction Records

          • FC-6.1.1

            Insurance licenseesG must comply with the record-keeping requirements contained in the AML Law and the CBB Law. Insurance licenseesG must therefore retain adequate records (including accounting and identification records), for the following minimum periods:

            (a) For customersG , in relation to evidence of identity and business relationship records (such as application forms, account files and business correspondence, including the results of any analysis undertaken (e.g. enquiries to establish background and purpose of complex, unusual large transactions)), for at least five years after the customerG relationship has ceased; and
            (b) For transactions, in relation to documents enabling a reconstitution of the transaction concerned, for at least ten years after the transaction was completed.
            Amended: October 2015
            Amended: January 2007
            Amended: October 2007
            Amended: April 2008

        • Compliance Records

          • FC-6.1.2

            Insurance licenseesG must retain copies of the reports produced for their annual compliance review, as specified in Paragraph FC-3.3.1B, for at least five years. Licensees must also maintain for five years reports made to, or by, the MLRO made in accordance with Sections FC-4.1 and FC-4.2, and records showing how these reports were dealt with and what action, if any, was taken as a consequence of those reports.

            Amended: January 2007
            Amended: October 2007
            Amended: April 2008
            Amended: January 2019

        • Training Records

          • FC-6.1.3

            Insurance licenseesG must maintain for at least five years, records showing the dates when AML/CFTG training was given, the nature of the training, and the names of the staff that received the training.

            Amended: January 2007
            Amended: October 2007
            Amended: April 2008

        • Access

          • FC-6.1.4

            All records required to be kept under this Section must be made available for prompt and swift access by the relevant authoritiesG or other authorised persons.

          • FC-6.1.5

            Insurance licenseesG are also reminded of the requirements contained in Chapter GR-1 (Books and Records).

    • FC-7 NCCT Measures and Terrorist Financing

      • FC-7.1 Special Measures for Non-Cooperative Countries or Territories ('NCCTs')

        • FC-7.1.1

          Insurance licenseesG must give special attention to any dealings they may have with entities or persons domiciled in countries or territories which are:

          (a) Identified by the FATF as being 'non-cooperative'; or
          (b) Notified to insurance licenseesG from time to time by the CBB.
          Amended: January 2007

        • FC-7.1.2

          Whenever transactions with such parties have no apparent economic or visible lawful purpose, their background and purpose must be re-examined and the findings documented. If suspicions remain about the transaction, these must be reported to the relevant authoritiesG in accordance with Section FC-4.2.

        • FC-7.1.3

          Insurance licenseesG must apply enhanced due diligence measures to business relationships and transactions with natural and legal persons, and financial institutions, from countries where such measures are called for by the FATF. The type of enhanced due diligence measures applied must be effective and proportionate to the risks.

          Added: October 2015

        • FC-7.1.4

          With regard to jurisdictions identified as NCCTs or those which in the opinion of the CBB, do not have adequate AML/CFT systems, the CBB reserves the right to:

          (a) Refuse the establishment of subsidiaries or branches or representative offices of financial institutions from such jurisdictions;
          (b) Limit business relationships or financial transactions with such jurisdictions or persons in those jurisdictions;
          (c) Prohibit financial institutions from relying on third parties located in such jurisdictions to conduct elements of the CDD process;
          (d) Require financial institutions to review and amend, or if necessary terminate, correspondent relationships with financial institutions in such jurisdictions;
          (e) Require increased supervisory examination and/or external audit requirements for branches and subsidiaries of financial institutions based in such jurisdictions; or
          (f) Require increased external audit requirements for financial groups with respect to any of their branches and subsidiaries located in such jurisdictions.
          Amended: January 2018
          Added: October 2015

      • FC-7.2 Terrorist Financing

        • FC-7.2.1AA

          Insurance licenseesG must implement and comply with United Nations Security Council resolutions relating to the prevention and suppression of terrorism and terrorist financing. Insurance licenseesG must freeze, without delay, the funds or other assets of, and to ensure that no funds or other assets are made available, directly or indirectly, to or for the benefit of, any person or entity either (i) designated by, or under the authority of, the United Nations Security Council under Chapter VII of the Charter of the United Nations, including in accordance with resolution 1267(1999) and its successor resolutions as well as Resolution 2178(2014) or (ii) designated as pursuant to Resolution 1373(2001).

          Added: April 2017

        • FC-7.2.1

          Insurance licenseesG must comply in full with the provisions of the UN Security Council Anti-terrorism Resolution No. 1373 of 2001 ('UNSCR 1373').

        • FC-7.2.2

          [This Paragraph was deleted in January 2018].

          Deleted: January 2018
          Amended: January 2007

        • FC-7.2.3

          A copy of UNSCR 1373 is included in Part B of Volume 3 (Insurance), under 'Supplementary Information'.

        • FC-7.2.4

          Insurance licenseesG must report to the CBB details of:

          (a) Funds or other financial assets or economic resources held with them which may be the subject of Article 1, Paragraphs (c) and (d) of UNSCR 1373; and
          (b) All claims, whether actual or contingent, which the insurance licenseeG has on persons and entities which may be the subject of Article 1, Paragraphs (c) and (d) of UNSCR 1373.
          Amended: January 2007

        • FC-7.2.5

          For the purposes of Paragraph FC-7.2.4, 'funds or other financial resources' includes (but is not limited to) shares in any undertaking owned or controlled by the persons and entities referred to in Article 1, Paragraph (c) and (d) of UNSCR 1373, and any associated dividends received by the licensee.

          Amended: January 2007

        • FC-7.2.6

          All reports or notifications under this Section must be made to the CBB's Compliance Directorate.

          Amended: January 2007

        • FC-7.2.7

          See Section FC-4.3 for the Compliance Directorate's contact details.

          Amended: January 2007

      • FC-7.3 Designated Persons and Entities

        • FC-7.3.1

          Without prejudice to the general duty of all insurance licenseesG to exercise the utmost care when dealing with persons or entities who might come under Article 1, Paragraphs (c) and (d) of UNSCR 1373, insurance licenseesG must not deal with any persons or entities designated by the CBB as potentially linked to terrorist activity.

          Amended: January 2007

        • FC-7.3.2

          The CBB from time to time issues to licensees lists of designated persons and entities believed linked to terrorism. Licensees are required to verify that they have no dealings with these designated persons and entities, and report back their findings to the CBB. Names designated by the CBB include persons and entities designated by the United Nations, under UN Security Council Resolution 1267 ("UNSCR 1267").

          Amended: January 2007

        • FC-7.3.3

          Insurance licenseesG must report to the relevant authoritiesG , using the procedures contained in Section FC-4.2, details of any accounts or other dealings with designated persons and entities, and comply with any subsequent directions issued by the relevant authoritiesG .

    • FC-8 Enforcement Measures

      • FC-8.1 Regulatory Penalties

        • FC-8.1.1

          The requirements in this Module are legally binding. Without prejudice to any other penalty imposed by the CBB Law, the Decree Law No. 4 or the Penal Code of the Kingdom of Bahrain, failure by a licensee to comply with this Module or any direction given hereunder shall result in the levying by the CBB, without need of a court order and at the CBB's discretion, of a fine of up to BD 20,000.

          Amended: January 2007

        • FC-8.1.2

          Module EN provides further information on the assessment of financial penalties and the criteria taken into account prior to imposing such fines (reference to Paragraph EN-5.2.3). Other enforcement measures may also be applied by the CBB in response to a failure by a licensee to comply with this Module; these other measures are also set out in Module EN.

          Amended: January 2007
          Amended: October 2007

        • FC-8.1.3

          The CBB will endeavour to assist insurance licenseesG to interpret and apply the requirements of this Module. Insurance licenseesG may seek clarification on any issue by contacting the Compliance Directorate (see Section FC-4.3 for contact details).

          Amended: January 2007

        • FC-8.1.4

          Without prejudice to the CBB's general powers under the law, the CBB may amend, clarify or issue further directions on any provision of this Module from time to time, by notice to its licensees.

          Amended: January 2007

    • FC-9 AML / CFT Guidance and Best Practice

      • FC-9.1 Guidance Provided by International Bodies

        • FATF Recommendations

          • FC-9.1.1

            The Financial Action Task Force (FATF) Recommendations (see www.fatf-gafi.org) (together with their associated interpretative notes and best practices papers) provide the basic framework for combating money laundering activities and the financing of terrorism. FATF Recommendations 9-12, 15-17, 18-21, 26-27, 33-35, 37 and 40 and the AML/CFTG Methodology are specifically relevant to the insurance sector.

            Amended: October 2015
            Amended: January 2007

          • FC-9.1.2

            The relevant authoritiesG in Bahrain believe that the principles established by these Recommendations should be followed by licensees in all material respects, as representing best practice and prudence in this area.

            Amended: October 2015

        • IAIS: Guidance Paper on Anti-Money Laundering and Combating the Financing of Terrorism

          • FC-9.1.3

            In January 2002, the International Association of Insurance Supervisors (IAIS) issued Anti-Money Laundering Guidance Notes for Insurance Supervisors and Insurance Entities. This document was updated in October 2004 and was reissued as Guidance Paper No. 5: Guidance Paper on Anti-Money Laundering and Combating the Financing of Terrorism (see www.iaisweb.org/publication). The Guidance Paper includes a set of measures and procedures, including elements of customer due diligence (CDD), reporting of suspicious transactions and measures affecting the organisation and staff of insurance licenseesG .

          • FC-9.1.4

            The CBB supports the above papers and the desirability of all insurance licenseesG adhering to their requirements and guidance.

            Amended: January 2007

        • Other Website References Relevant to AML/CFT

    • FC-10 Fraud

      • FC-10.1 General Requirements

        • FC-10.1.1

          Insurance licenseesG must ensure that they allocate appropriate resources and have in place systems and controls to deter, detect, and record instances of fraud or attempted fraud.

        • FC-10.1.2

          Fraud may arise from internal sources originating from changes or weaknesses to processes, products and internal systems and controls. Fraud can also arise from external sources, such as claims fraud.

        • FC-10.1.3

          Any actual or attempted fraud incident (however small) must be reported to the appropriate authorities (including the CBB) and followed up. Monitoring systems must be designed to measure fraud patterns that might reveal a series of related fraud incidents.

          Amended: January 2007

        • FC-10.1.4

          Insurance licenseesG must ensure that a person is given overall responsibility for the prevention, detection and remedy of fraud, at a senior level of the organisation.

        • FC-10.1.5

          Insurance licenseesG must ensure the effective segregation of functions and responsibilities, between different individuals and departments, such that the possibility of financial crime is reduced and that no single individual is able to initiate, process and control a transaction.

        • FC-10.1.6

          Insurance licenseesG must provide regular training to their management and staff, to make them aware of potential fraud risks.

        • Advance Fee Fraud

          • FC-10.1.7

            In a number of jurisdictions, there have been a number of recent incidents whereby insurance entities have either been the victims of, or have inadvertently provided assistance to, advance fee frauds. Advance fee fraud consists of setting up a fraudulent and almost certainly non-existent financial or banking transaction, the aim of which is to defraud an innocent third party of an up front payment or deposit which is intended by the third party to be consideration for their involvement in that financial transaction, the receipt of a low interest or interest fee loan or the receipt of some other financial benefit. The types of transactions used as the façade for the frauds vary in detail, some of the most common are investment in financial instruments, self liquidating loans and loans or other financial benefits. Although these transactions are generally based around banking or securities transactions, it is occasionally the case that the transaction will purport to be guaranteed by insurers.

          • FC-10.1.8

            The most common type of advance fee fraud is for a fraudster to approach a company or sovereign state which has a poor credit rating or which is in some financial difficulty and offer to obtain funding at beneficial rates. Likewise, a potential investor may be approached and offered the opportunity to invest in a transaction with a very high rate of return. In each instance, the borrower or investor will be asked to provide some funds up front to cover the costs of setting up the transaction or by way of a deposit or down payment on fees. Once the fee has been paid, the fraudster will disappear and the transaction will, on further investigation, prove to be fictitious.

          • FC-10.1.9

            Insurance licenseesG are encouraged to promote the exchange of information amongst themselves with respect to fraud and those committing fraud including, as appropriate, through the use of databases. Licensees should also consider the need to exchange information with the police and other external bodies.

          • FC-10.1.10

            Insurance claims fraud is an offence punishable under the provision of Section 391 of the Penal Code, Decree Act No. (15), of 1976 of the Kingdom of Bahrain.

        • Guidance Provided by the IAIS

          • FC-10.1.11

            In October 2006, the International Association of Insurance Supervisors (IAIS) issued Guidance Paper on Preventing, Detecting and Remedying Fraud in Insurance (see www.iaisweb.org/publication). The Guidance Paper has been developed to help the insurance sector prevent and detect cases of fraud. Insurance licensees should assess their own vulnerability and implement effective and efficient policies, procedures and controls to address the risk of fraud.

            Adopted: October 2007

Back to top