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Location: Central Bank of Bahrain Volume 3—Insurance > Part A > Business Standards > CL Client Money > CL-1 Client Money Protection > CL-1.1 Client Money Protection Rules > Keeping Separate Client Accounts > CL-1.1.9
  • Keeping Separate Client Accounts

    • CL-1.1.1

      Where an insurance brokerG or appointed representativeG receives payment from a client, it must maintain one or more premiums/contributions account that holds client moneyG separate from its own money.

      April 2012

    • CL-1.1.2

      Premiums/contributions collected in relation of a specific transaction must not be used to settle amounts due under another transaction.

      April 2012

    • CL-1.1.3

      Payment of premiums/contributions to insurance firmsG , or commissions (brokerage) to the insurance brokers'G and appointed representatives'G own accounts must not be effected until the premiums to which these payments relate have been duly received from that client and credited to the client account.

      April 2012

    • CL-1.1.4

      In respect of premiums/contributions booked in Bahrain in relation to residents and non-residents of Bahrain, these accounts are to be maintained with a retail bank licensed to do business in Bahrain.

      April 2012

    • CL-1.1.5

      Insurance brokersG and appointed representativesG must:

      (a) Provide the CBB with a written confirmation from a retail bank(s) licensed to do business in Bahrain, as in what capacity they are holding such client money.G This confirmation must be provided to the CBB at the time of opening the client money accountG and when there is a material change in the nature of the account;G and
      (b) Instruct the bank(s) not to combine the client money accountG (s) with any other account or to exercise any right or set-off or counterclaim against money in that account in respect of any sum owed to it on any other account of the insurance broker or appointed representative.
      April 2012

    • CL-1.1.6

      Paragraph CL-1.1.5 does not apply where the appointed representativeG is a bank. In this instance, premiums/contributions received by the appointed representativeG must be deposited directly into the insurance firm'sG account with a retail bank in Bahrain.

      April 2012

    • CL-1.1.7

      Client moneyG must, upon receipt, be paid into a specifically designated client money accountG no later than the immediate business day after receipt. The monies in this account must form part of the fiduciary assetsG of the insurance brokerG or appointed representativeG and must be held in custody for the client, where the insurance brokerG or appointed representativeG acts as an agent with the client retaining full legal ownership of the funds.

      April 2012

    • CL-1.1.8

      The following guidance material provides examples of circumstances under which monies may be deposited into or withdrawn from a client account.

      April 2012

    • CL-1.1.9

      Amounts that may be deposited into a client account:

      (a) Monies received from the client for the purpose of purchasing contracts of insurance; and
      (b) Monies received on behalf of the client from (re)insurance firms, insurance intermediariesG and any other third parties relating to the refund of premiums/contributions to clients.
      April 2012

    • CL-1.1.10

      Amounts that may be withdrawn from a client account:

      (a) Premium monies required to be paid on behalf of the client to (re)insurance firms or other insurance intermediaries for the purchase of contracts of insurance;
      (b) Monies drawn on a client's written authority in accordance with the insurance contract; or
      (c) Monies which may by mistake or accident have been paid into the account.
      April 2012

    • CL-1.1.11

      While the (re)insurance brokerG may assist a policyholder or insurance firm in the claims settlement process, funds related to claims settlement must be remitted directly by the (re)insurance firm to the policyholder or insurance firm.

      April 2012

    • CL-1.1.12

      Every insurance brokerG and appointed representativeG must maintain at least one income and expenses account with a retail bank licensed to do business in Bahrain.

      April 2012

    • CL-1.1.13

      Insurance brokersG and appointed representativesG are prohibited from:

      (a) Combining income and expenses account(s) with premiums/contributions; and
      (b) Transferring income and expenses account(s) to premiums/contributions account(s).
      April 2012

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