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Location: Central Bank of Bahrain Volume 3—Insurance > Part A > Reporting Requirements > PD Public Disclosure
  • PD Public Disclosure

    • PD-A Introduction

      • PD-A.1 Purpose

        • Executive Summary

          • PD-A.1.1

            The purpose of this Module is to set out the minimum requirements applied by the Central Bank of Bahrain (‘CBB’) to insurance firmsG , with respect to corporate and financial transparency through meaningful public disclosures. Such disclosures help protect customersG of insurance firmsG and facilitate market discipline.

            Amended: January 2007

          • PD-A.1.2

            The CBB's disclosure requirements vary according to the Category of insurance licenseeG . Certain categories are exempt from these requirements, because of the limited nature of their business. The scope of application of these requirements is given in Section PD-B.1.

            Amended: January 2007

          • PD-A.1.3

            The CBB encourages insurance firmsG to go beyond the minimum requirements specified in this Module. Further guidance on international best practice in this regard is provided in Chapter PD-3.

            Amended: January 2007

          • PD-A.1.4

            In setting out certain detailed disclosure requirements, this Module supports various other parts of the Rulebook, namely:

            (a) Principles of Business (Module PB);
            (b) Authorisation (Module AU);
            (c) Auditors and Actuaries (Module AA);
            (d) CBB Reporting (Module BR);
            (e) Capital Adequacy (Module CA); and
            (f) Business Conduct (Module BC).
            Amended: January 2007

        • Legal Basis

          • PD-A.1.5

            This Module contains the CBB's Directive (as amended from time to time) relating to public disclosure 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 .

            Amended: January 2011
            Amended: July 2009
            Amended: October 2007
            Added: January 2007

          • PD-A.1.6

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

            Added: January 2007

      • PD-A.2 Module History

        • PD-A.2.1

          This Module was first issued in April 2005 by the BMA, 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

        • PD-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

        • PD-A.2.3

          A list of recent changes made to this Module is provided below:

          Module Ref. Change Date Description of Changes
          PD-1.1 01/10/05 Amended the requirement that the Annual Report be available only in printed form (electronic format is optional).
          PD-2.1 01/10/05 Reference added to IAS 34; clarified the semi-annual financial statements are subject to "review" and not "audit".
          PD-1.1.6 01/04/06 Clarified local disclosure requirements.
          PD-2.1.5 01/07/06 Added a transition period for semi-annual disclosure requirements.
          PD-A1.5 01/2007 New Rule introduced referring to the CBB Law and categorising this Module as a Directive.
          PD-2.1.2 01/2007 Clarified that insurance firms are to disclose prior year comparative figures as part of the requirements for semi-annual disclosure requirements.
          PD-1.1.6A, 1.2.5A and 2.1.4A 10/2007 Clarified that insurance firmsG must submit the newspaper copy of the required published financial statements.
          PD-2.1.4B 01/2007 Clarified that pure reinsurers need not published in local newspapers their semi-annual results. Publication of these results on their website will meet CBB requirements.
          PD-A.1.5 07/2009 Corrected application of legal basis.
          PD-1.1.12 07/2009 Clarified format of auditor's opinion for audited financial statements to be submitted
          PD-A.1.5 01/2011 Clarified legal basis.
          PD-2.2 01/2011 Added a new Section for newly-established insurance firms.
          PD-1.1.12A, PD-1.1.13A, and PD-2.1.2A 04/2014 Added public disclosure requirements for Takaful firms.
          PD-1.1.21 10/2019 Amended Paragraph on disclosure of financial penalties of insurance firms.
          PD-1.2.4 10/2019 Amended Paragraph on disclosure of financial penalties of overseas insurance firms.

        • PD-A.2.3 [Deleted]

          Deleted: January 2007

        • PD-A.2.4

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

    • PD-B Scope of Application

      • PD-B.1 Scope

        • PD-B.1.1

          The contents of this Module apply to both Bahraini insurance firmsG and overseas insurance firmsG .

          Amended: July 2007
          Amended: October 2007

        • PD-B.1.2

          The disclosures required generally relate to all the corporate activities of the licensee concerned, including activities undertaken outside Bahrain through overseas branches or an overseas head office. Specific rules and guidance in this respect are included in Chapter PD-1.

        • PD-B.1.3

          Where licensees are part of a group, then certain disclosures also require information relating to the licensee's subsidiariesG , parentsG and affiliates. Specific requirements in this respect are also included in Chapter PD-1.

          Amended: January 2007

        • PD-B.1.4

          This Module does not apply to captive insurersG ; insurance brokersG ; insurance consultantsG ; insurance managersG ; and appointed representativesG .

          Amended: July 2007

        • PD-B.1.5

          Captive insurersG for the most part expose only connected counterparties to financial risks. The remaining categories listed in Paragraph PD-B.1.4 pose limited financial risk to policyholdersG because of the limited nature of their activities.

          Amended: January 2007

    • PD-1 Annual Disclosure Requirements

      • PD-1.1 Disclosure by Bahraini Insurance Firms

        • Publication of Annual Reports

          • PD-1.1.1

            Bahraini insurance firmsG must publish an Annual Report, in the manner prescribed in this Section, within 3 months of the end of the firm's financial year.

          • PD-1.1.2

            In addition to the requirements specified in this Module, Bahraini insurance firmsG are also required to comply with the requirements regarding the publication of audited financial accounts, as specified in Article 62 of the CBB Law, the Bahrain Commercial Companies Law 2001 (as amended) and the Bahrain Stock Exchange Regulations (where applicable).

            Amended: January 2007

          • PD-1.1.3

            Bahraini insurance firmsG must apply financial years that end on 31 December, unless prior written approval has been obtained from the CBB for a different year-end.

            Amended: January 2007

          • PD-1.1.4

            The Annual Report must be made available in printed form.

          • PD-1.1.5

            The Annual Report must be published in both Arabic and English.

          • PD-1.1.6

            The requirement to publish an Annual Report will be met where firms publish financial information (balance sheet and income statement) and any financial penalties paid to the CBB, in two local (Bahrain) daily newspapers (one in Arabic, one in English), containing details of where interested parties may obtain a copy of the full Annual Report in either electronic or paper form.

            Amended: October 2007

          • PD-1.1.6A

            Bahraini insurance firmsG must submit a newspaper copy of the published financial statements (referred to under Paragraph PD-1.1.1) to the CBB within three months from the statements’ date. The copy should be accompanied by a letter clearly showing on which date and in which publication(s) the statements were published.

            Added: October 2007

          • PD-1.1.7

            The Annual Report must include the information that insurance firmsG are required to disclose on an annual basis as set out in this Module, together with additional information that may facilitate the understanding by prospective and existing policyholdersG and other market participants of the financial position of the firm and the risks to which it is subject.

            Amended: January 2007

          • PD-1.1.8

            Bahraini insurance firmsG whose business is limited to reinsurance activities, are exempt from publishing summary financial information in local newspapers. However, their Annual Report must be made available in electronic format via the firm's web site.

          • PD-1.1.9

            Bahraini insurance firmsG must provide printed copies of their Annual Report on request, but may charge a fee for providing a printed copy to persons who are neither policyholdersG nor shareholdersG of the firm.

            Amended: January 2007

        • Categories of Information to be Disclosed

          • PD-1.1.10

            Bahraini insurance firmsG must, in their Annual Report, provide timely information that facilitates market participants' assessment of the firm. There are five broad categories of information, each of which must be addressed in clear terms and with appropriate details to help achieve a satisfactory level of transparency. The five categories are:

            (a) Financial position;
            (b) Financial performance;
            (c) Corporate governance;
            (d) Compliance; and
            (e) Risk management strategies and practices.
            Amended: January 2007

          • PD-1.1.11

            The disclosure requirements listed in this Module are in addition to or serve to clarify the disclosure requirements under International Financial Reporting Standards ('IFRS'). These requirements may either be integrated into the Notes to the Accounts, or addressed in the Directors' Report.

            Amended: October 2007

        • Financial Position

          • PD-1.1.12

            The Annual Report must contain a copy of the firm's annual, audited financial statements in accordance with the requirements contained in the CBB Law, the Bahrain Commercial Companies Law 2001 (as amended) and the Bahrain Stock Exchange regulations (where applicable). The financial statements must contain the auditor's opinion which must be made in accordance with the International Standards on Auditing, established by the International Federation of Accountants. The Annual Report must also contain a solvency statement and the auditor's report.

            Amended: July 2009
            Amended: January 2007

          • PD-1.1.12A

            For Takaful firmsG , the published financial statements must provide a detailed breakdown of the statement of financial position and statement of comprehensive income for the shareholder fund and for any participant fund(s) of the Takaful firmG .

            Added: April 2014

          • PD-1.1.13

            The solvency statement specified in Paragraph PD-1.1.12 must include a breakdown of the firm's CBB capital available (as specified in Paragraph CA-1.2.21) and a summary of the firm's CBB solvency margin requirements (as prescribed in Chapter CA-2).

            Amended: January 2007
            Amended: October 2007

          • PD-1.1.13A

            In instances where a Takaful firm has opted to write-off a Qard Hassan granted to meet solvency requirements under the CBB Rules at that time, the amount of the Qard Hassan must be disclosed as an off-balance sheet item in accordance with Subparagraph CA-8.4.16.

            Added: April 2014

          • PD-1.1.14

            Firms must disclose in their published accounts all information which policyholdersG and shareholdersG would reasonably expect to enable them to form a view of the firm's ability to meet its obligations.

            Amended: January 2007

          • PD-1.1.15

            Firms are encouraged to include within the annual reports key ratios that would assist readers in understanding the firm's financial performance, performance on its insurance account and in making comparisons with previous financial periods on a like-for-like basis. Possible ratios include those contained in the Insurance Firm Return (cf. Module BR (CBB Reporting)).

            Amended: January 2007

        • Financial Performance

          • PD-1.1.16

            The following information relating to the financial performance and position of the firm must, where relevant to an understanding of the firm's financial performance, be included in the Annual Report:

            (a) A discussion of the main factors that influenced the firm's financial performance for the year, explaining any differences in performance between the current year and previous years and the reasons for such changes, and discussing factors that will have a significant influence on the firm's future financial performance;
            (b) Comparisons with the previous period's financial performance (unless this is the firm's first reporting period), including comparisons between business segments;
            (c) The performance of the technical account, including, but not necessarily limited to, comparisons with past performance of claims ratios, claims development and how the underwriting portfolio is made up;
            (d) Performance of the technical account both net and gross of reinsurance;
            (e) Investment performance;
            (f) Claims trends and key claims, where relevant to an understanding of the financial performance;
            (g) A discussion of the impact of acquisitions of new businesses; and
            (h) The impact of any changes in the capital structure on earnings and dividends.
            Amended: January 2007

        • Corporate Governance

          • PD-1.1.17

            The Annual Report of insurance firmsG must contain details of any shares in the firm held by its DirectorsG and Chief ExecutiveG /General ManagerG . Such details must include:

            (a) The total number of shares held by such individuals as at the financial year-end (broken down by class of share where applicable); and
            (b) Any acquisitions or disposals in such shares during the financial year in question, including the numbers of such shares and the price at which they were acquired or sold.
            Amended: January 2007

          • PD-1.1.18

            For the purpose of the disclosures required under Paragraph PD-1.1.17, shares held by DirectorsG and Chief ExecutivesG /General ManagersG also include any shares held in the firm by their spouses, children or any other person whose share holdings may fall under their control.

          • PD-1.1.19

            The following information relating to corporate governance must also be included in the firm's Annual Report:

            (a) Information about the Board and Board committees (if any). This must include details of Board membership (including a summary of each Board member's professional experience, qualifications, date of appointment and other Directorships held); details of the membership and mandates of any Board Committees; and the number of Board and any Board committee meetings held during the financial year in question;
            (b) Information about the managerial structure. This must include a summary of the Chief Executive Officer'sG /General Manager'sG professional experience, qualifications and date of appointment; a summary of any management committees, their mandates and membership; and a summary of the senior management structure and reporting lines; and
            (c) Information about the firm's basic organisational structure. This must include a clear description of the lines of business and legal entity structures.
            Amended: January 2007

        • Compliance

          • PD-1.1.20

            The Annual Report must include a declaration by the external auditorG that no violations have taken place of:

            (a) The Bahrain Commercial Companies Law of 2001 (as amended);
            (b) The CBB Law; and
            (c) The CBB's insurance Directives and Regulations (as contained in Volume 3 of the CBB Rulebook),

            insofar as the violations have any material impact on the financial statements of the firm.

            Amended: January 2007
            Amended: October 2007

          • PD-1.1.21

            In accordance with Paragraph EN-B.4.5, insurance firmsG must disclose in their Annual Report the amount of any financial penalties paid to the CBB, together with a factual description of the reason(s) given by the CBB for the penalty. Insurance firmsG which fail to comply with this requirement will be required to make the disclosure in the annual report of the subsequent year and will be subject to an enforcement action for non-disclosure.

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

        • Risk Management Strategies and Practices

          • PD-1.1.22

            The following information relating to the firm's risk management strategies and practices must be included in the Annual Report:

            (a) A summary of the significant internal and external risks facing the firm;
            (b) A summary of the firm's risk management policies (including, but not limited to, underwriting, credit, investment, reserving, legal, operational and group risks); and
            (c) A summary of the firm's risk monitoring organisation and processes, including details on the firm's risk management and internal audit functions; the use of reinsurance; and controls on underwriting, credit and investment risk.
            Amended: January 2007

      • PD-1.2 Disclosure by Overseas Insurance Firms

        • PD-1.2.1

          Overseas insurance firmsG must publish on an annual basis audited financial statements for their Bahrain operations, in the manner described in this Section, within 3 months of the end of the firm's financial year.

        • PD-1.2.2

          The disclosure requirements referred to in Paragraph PD-1.2.1 are in addition to those required under International Financial Reporting Standards ('IFRS').

          Amended: October 2007

        • PD-1.2.3

          Overseas insurance firmsG must disclose in their published accounts all information which policyholdersG would reasonably expect to be given in order to form a view of the branch's ability to meet its obligations.

          Amended: January 2007

        • PD-1.2.4

          In accordance with Paragraph EN-B.4.5, overseas insurance firmsG must also disclose the amount of any financial penalties paid to the CBB, together with a factual description of the reason(s) given by the CBB for the penalty. Overseas insurance firmsG which fail to comply with this requirement will be required to make the disclosure in the annual audited financial statements of the subsequent year and will be subject to an enforcement action for non-disclosure.

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

        • PD-1.2.5

          The requirement to publish audited financial statements will be met where overseas insurance firmsG publish financial information (balance sheet and income statement) and financial penalties paid to theCBB, in two local daily newspapers (one in Arabic, one in English), containing details of where interested parties may obtain a copy of the full audited financial statements in either electronic or paper form.

          Amended: January 2007
          Amended: October 2007

        • PD-1.2.5A

          Overseas insurance firmsG must submit a newspaper copy of the published financial statements (referred to under Paragraph PD-1.2.1) to the CBB within three months from the statements’ date. The copy should be accompanied by a letter clearly showing on which date and in which publication(s) the statements were published.

          Added: October 2007

        • PD-1.2.6

          Overseas insurance firmsG whose business is limited to reinsurance activities are exempt from publishing information in local newspapers. However, their audited financial statements and information related to any financial penalties paid to the CBB must be made available in electronic format via the firm's web site.

          Amended: January 2007

        • PD-1.2.7

          Overseas insurance firmsG must provide printed copies of their audited financial statements on request, but may charge a fee for providing a printed copy to persons who are neither policyholdersG nor shareholdersG of the company.

          Amended: January 2007

        • PD-1.2.8

          Overseas insurance firmsG must make available in Bahrain information on the overall financial position of the firm (i.e. including head office operations), to enable an understanding of the company as a whole. This requirement can be discharged by:

          (a) Publication of information on the overall financial position of the whole firm as part of the publication of branch financial statements in Bahrain; or
          (b) Reference in the publication in Bahrain to the firm's web site where information that meets these requirements can be found (in English and/or Arabic).
          Amended: January 2007

    • PD-2 Semi-Annual Disclosure Requirements

      • PD-2.1 General Requirements

        • Application

          • PD-2.1.1

            This Chapter applies to all insurance firmsG .

        • The Requirements

          • PD-2.1.2

            Insurance firmsG must publish interim summary financial statements, in accordance with IAS 34 (International Accounting Standards). Insurance firms must also provide prior year comparative figures, as dictated by IAS 34, when disclosing semi-annual results.

            Amended: January 2007
            Amended: October 2007

          • PD-2.1.2A

            For Takaful firmsG , the published interim financial statements must provide a detailed breakdown of the statement of financial position and statement of comprehensive income for the shareholder fund and for any participant fund(s) of the Takaful firmG .

            Added: April 2014

          • PD-2.1.3

            The statements referred to under Paragraph PD-2.1.2 must be reviewed by the firm's external auditorG , in accordance with International Standards on Auditing (ISA) applicable to Review engagements.

            Amended: January 2007
            Amended: October 2007

          • PD-2.1.4

            The statements referred to under Paragraph PD-2.1.2 must be published in two local newspapers (one in Arabic, one in English), within two months of the statements' date.

            Amended: October 2007

          • PD-2.1.4A

            Insurance firmsG must submit a newspaper copy of the published financial statements (referred to under Paragraph PD-2.1.4) to the CBB within two months from the statements’ date. The copy should be accompanied by a letter clearly showing on which date and in which publication(s) the statements were published.

            Added: October 2007

          • PD-2.1.4B

            Bahraini insurance firmsG , whose business is limited to reinsurance activities, are exempt from publishing semi-annual interim financial statements in local newspapers. However, interim results must be made available in electronic format via the firm's web site.

            Added: January 2008

          • PD-2.1.5

            Insurance firmsG are required to comply with the requirements of Chapter PD-2, effective for the period ending 30 June 2008. (Refer to ES-2.8.1).

            Amended: January 2007

      • PD-2.2 Special Arrangements for Newly-Established Insurance Firms

        • PD-2.2.1

          Newly-established insurance firmsG are not required to follow the publication requirements of Section PD-2.1 for the first semi-annual results of their operation or until the commencement of their second financial year of operation (whichever period is the latest).

          Added: January 2011

        • PD-2.2.2

          After the period referred to in Paragraph PD-2.2.1 has expired, all newly-established insurance firmsG must follow the publication requirements of Section PD-2.1. Newly-established insurance firmsG must follow the requirements for annual public disclosure outlined in Chapter PD-1.

          Added: January 2011

    • PD-3 Further Guidance and Best Practice

      • PD-3.1 Introduction

        • PD-3.1.1

          This Chapter provides references to sources of additional guidance issued by international bodies. The CBB encourages insurance licenseesG to go beyond the minimum disclosure standards contained in this Module, and to refer to guidance issued by international bodies on best practice.

          Amended: January 2007

        • PD-3.1.2

          Should any guidance referred to in this Chapter conflict with specific CBB requirements, then the CBB requirements will prevail.

          Amended: January 2007

      • PD-3.2 Guidance Provided by Other International Bodies

        • International Association of Insurance Supervisors: 'Guidance Paper on Public Disclosure by Insurers'

          • PD-3.2.1

            This paper provides guidance on the public disclosure of reliable and timely information, involving both the quality of disclosure by insurers and the nature of the information being disclosed. Disclosure improves the understanding of policyholdersG and market participants of the financial position of insurers. The CBB encourages insurance licenseesG to refer to this document and to apply the disclosure principles it contains (see www.iaisweb.org).

            Amended: January 2007
            Amended: October 2007

        • AAOIFI Financial Accounting Standard 12 (General Presentation and Disclosure in the Financial Statements of Islamic Insurance Companies)

          • PD-3.2.2

            The CBB requires takaful companies to follow Financial Accounting Standard 12 (General Presentation and Disclosure in the Financial Statements of Islamic Insurance Companies) published by the Accounting and Auditing Organisation for Islamic Financial Institutions — www.aaoifi.com (refer to Section BC-3.4).

            Amended: January 2007

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