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Location: Central Bank of Bahrain Volume 3—Insurance > Part A > High Level Standards > GR General Requirements > GR-4 Business Transfers > GR-4.1 CBB Approval
  • GR-4.1 CBB Approval

    • GR-4.1.1

      In accordance with Article 66 of the CBB Law, an insurance licenseeG must seek prior written approval from the CBB before transferring any of its business to a third party.

      Amended: January 2007

    • GR-4.1.2

      Rule GR-4.1.1 is intended to apply to circumstances where an insurance licenseeG wishes to transfer all or part of its business to a third party. A business transfer is not the same as an insurance firmG ceding (reinsuring) some or all of its policyholderG liabilities to a reinsurer. Reinsurance creates an additional set of rights and obligations between the insurance firmG and the reinsurer but does not change the insurance firm'sG obligations to its policyholdersG nor does it create any direct obligations (to each other) between the insurance firm'sG policyholdersG and the insurance firm'sG reinsurer.

      Added: January 2007

    • GR-4.1.3

      In the case of a Bahraini insurance licenseeG , Chapter GR-4 applies both to business booked in Bahrain and in the licensee’s overseas branchesG . In the case of an overseas insurance licenseeG , Chapter GR-4 applies only to business booked in the firm's Bahrain branchG .

      Amended: January 2007

    • GR-4.1.4

      In all cases, CBB approval to transfer business will only be given where:

      (a) The transfer of business will not damage or otherwise prejudice the legitimate interests of the licensee’s customersG ;
      (b) The transferee is duly licensed to undertake the business which it is to receive; and
      (c) The CBB is satisfied that the transfer will not breach any applicable Laws and regulations, and would not create any supervisory concerns.
      Added: January 2007
      Amended: October 2007

    • GR-4.1.5

      For purposes of Paragraph GR-4.1.1, a business transfer refers to a transfer of all the rights and obligations of one insurance licenseeG to another insurance licenseeG , so that the policyholdersG and reinsurers continue to be subject to the same terms and conditions as those originally agreed. Business transfers may enable licensees that have ceased writing certain lines of business to manage their affairs more effectively and be beneficial both to the insurance licenseeG and the policyholdersG , particularly if the insurance licenseeG that is assuming the business is financially stronger than the insurance licenseeG transferring the business.

      Amended: January 2007

    • GR-4.1.6

      In assessing the criteria outlined in Paragraph GR-4.1.4, the CBB will, amongst other factors, take into account the financial strength of the transferee; its capacity to manage the business being transferred; its track record in complying with applicable regulatory requirements; and (where applicable) its track record in treating customersG fairly. The CBB will also take into account the impact of the transfer on the transferor, and any consequences this may have for the transferor’s remaining customersG .

      Amended: January 2007

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