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Location: Central Bank of Bahrain Volume 3—Insurance > Part A > Reporting Requirements > BR CBB Reporting > BR-3 Information Gathering by the CBB > BR-3.5 The Role of the Appointed Expert
  • BR-3.5 The Role of the Appointed Expert

    • Introduction

      • BR-3.5.1

        The content of this Chapter is applicable to all insurance licenseesG and appointed expertsG .

        Added: October 2011

      • BR-3.5.2

        The purpose of the contents of this Chapter is to set out the roles and responsibilities of appointed expertsG when appointed pursuant to Article 114 or 121 of the CBB Law (see EN-2.1.1). These Articles empower the CBB to assign some of its officials or others to inspect or conduct investigations of insurance licenseesG .

        Added: October 2011

      • BR-3.5.3

        The CBB uses its own inspectors to undertake on-site examinations of licenseesG as an integral part of its regular supervisory efforts. In addition, the CBB may commission reports on matters relating to the business of licenseesG in order to help it assess their compliance with CBB requirements. Inspections may be carried out either by the CBB's own officials, by duly qualified appointed expertsG appointed for the purpose by the CBB, or a combination of the two.

        Added: October 2011

      • BR-3.5.4

        The CBB will not, as a matter of general policy, publicise the appointment of an appointed expertG , although it reserves the right to do so where this would help achieve its supervisory objectives. Both the appointed expertG and the CBB are bound to confidentiality provisions restricting the disclosure of confidential information with regards to any such information obtained in the course of the investigation.

        Added: October 2011

      • BR-3.5.5

        Unless the CBB otherwise permits, appointed expertsG should not be the same firm appointed as external auditor of the insurance licenseeG .

        Added: October 2011

      • BR-3.5.6

        Appointed expertsG will be appointed in writing, through an appointment letter, by the CBB. In each case, the CBB will decide on the range, scope and frequency of work to be carried out by appointed expertsG .

        Added: October 2011

      • BR-3.5.7

        All proposals to appoint appointed expertsG require approval by an Executive Director or more senior official of the CBB. The appointment will be made in writing, and made directly with the appointed expertsG concerned. A separate letter is sent to the licenseeG , notifying them of the appointment. At the CBB's discretion, a trilateral meetingG may be held at any point, involving the CBB and representatives of the licenseeG and the appointed expertsG , to discuss any aspect of the investigation.

        Added: October 2011

      • BR-3.5.8

        Following the completion of the investigation, the CBB will normally provide feedback on the findings of the investigation to the licenseeG .

        Added: October 2011

      • BR-3.5.9

        Appointed expertsG will report directly to and be responsible to the CBB in this context and will specify in their report any limitations placed on them in completing their work (for example due to the licensee'sG group structure). The report produced by the appointed expertsG is the property of the CBB (but is usually shared by the CBB with the firm concerned).

        Added: October 2011

      • BR-3.5.10

        Compliance by appointed expertsG with the contents of this Chapter will not, of itself, constitute a breach of any other duty owed by them to a particular insurance licenseeG (i.e. create a conflict of interestG ).

        Added: October 2011

      • BR-3.5.11

        The CBB may appoint one or more of its officials to work on the appointed experts'G team for a particular insurance licenseeG .

        Added: October 2011

    • The Required Report

      • BR-3.5.12

        The scope of the required report will be determined and detailed by the CBB in the appointment letter. Commissioned appointed expertsG would normally be required to report on one or more of the following aspects of a licensee'sG business:

        (a) Accounting and other records;
        (b) Internal control systems;
        (c) Returns of information provided to the CBB;
        (d) Operations of certain departments; and/or
        (e) Other matters specified by the CBB.
        Added: October 2011

      • BR-3.5.13

        Appointed expertsG will be required to form an opinion on whether, during the period examined, the licenseeG is in compliance with the relevant provisions of the CBB Law and the CBB's relevant requirements, as well as other requirements of Bahrain Law and, where relevant, industry best practice locally and/or internationally.

        Added: October 2011

      • BR-3.5.14

        The appointed experts'G report should follow the format set out in Appendix BR-(iii), in part B of the CBB Rulebook.

        Added: October 2011

      • BR-3.5.15

        Unless otherwise directed by the CBB or unless the circumstances described in Section BR-3.5.19 apply, the report must be discussed with the Board of directors and/or senior managementG in advance of it being sent to the CBB.

        Added: October 2011

      • BR-3.5.16

        Where the report is qualified by exceptionG , the report must clearly set out the risks which the licenseeG runs by not correcting the weakness, with an indication of the severity of the weakness should it not be corrected. Appointed expertsG will be expected to report on the type, nature and extent of any weaknesses found during their work, as well as the implications of a failure to address and resolve such weaknesses.

        Added: October 2011

      • BR-3.5.17

        If the appointed expertsG conclude, after discussing the matter with the licenseeG , that they will give a negative opinion (as opposed to one qualified by exceptionG ) or that the issue of the report will be delayed, they must immediately inform the CBB in writing giving an explanation in this regard.

        Added: October 2011

      • BR-3.5.18

        The report must be completed, dated and submitted, together with any comments by directors or management (including any proposed timeframe within which the licenseeG has committed to resolving any issues highlighted by the report), to the CBB within the timeframe applicable.

        Added: October 2011

    • Other Notifications to the CBB

      • BR-3.5.19

        Appointed expertsG must communicate to the CBB, during the conduct of their duties, any reasonable belief or concern they may have that any of the requirements of the CBB, including the criteria for licensing a licenseeG (see Module AU), are not or have not been fulfilled, or that there has been a material loss or there exists a significant risk of material loss in the concerned licenseeG , or that the interests of customers are at risk because of adverse changes in the financial position or in the management or other resources of a licenseeG . Notwithstanding the above, it is primarily the licensee'sG responsibility to report such matters to the CBB.

        Added: October 2011

      • BR-3.5.20

        The CBB recognises that appointed expertsG cannot be expected to be aware of all circumstances which, had they known of them, would have led them to make a communication to the CBB as outlined above. It is only when appointed expertsG , in carrying out their duties, become aware of such a circumstance that they should make detailed inquiries with the above specific duty in mind.

        Added: October 2011

      • BR-3.5.21

        If appointed expertsG decide to communicate directly with the CBB in the circumstances set out in Paragraph BR-3.5.19, they may wish to consider whether the matter should be reported at an appropriate senior level in the licenseeG at the same time and whether an appropriate senior representative of the licenseeG should be invited to attend the meeting with the CBB.

        Added: October 2011

    • Permitted Disclosure by the CBB

      • BR-3.5.22

        Information which is confidential and has been obtained under, or for the purposes of, this chapter or the CBB Law may only be disclosed by the CBB in the circumstances permitted under the Law. This will allow the CBB to disclose information to appointed expertsG to fulfil their duties. It should be noted, however, that appointed expertsG must keep this information confidential and not divulge it to a third party except with the CBB's permission and/or unless required by Bahrain Law.

        Added: October 2011

    • Trilateral Meeting

      • BR-3.5.23

        The CBB may, at its discretion, call for a trilateral meetingG (s) to be held between the CBB and representatives of the relevant insurance licenseeG and the appointed expertsG . This meeting will provide an opportunity to discuss the appointed experts'G examination of, and report on, the insurance licenseeG .

        Added: October 2011

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