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Location: Central Bank of Bahrain Volume 3—Insurance > Part A > High Level Standards > GR General Requirements > GR-8 Cessation of Business > GR-8.1 CBB Approval > GR-8.1.9
  • GR-8.1 CBB Approval

    • GR-8.1.1

      As specified in Article 50 of the CBB Law, an insurance licenseeG wishing to cease to provide or suspend any or all its regulated insurance servicesG , completely or at any of its branches and/or liquidate its business must obtain prior written approval from the CBB.

      Amended: October 2011
      Amended: July 2007

    • GR-8.1.2

      If the insurance licenseeG wishes to effect a business transfer, it must also comply with the requirements contained in Chapter GR-4.

      Amended: July 2007

    • GR-8.1.3

      In the case of a Bahraini insurance licenseeG , Chapter GR-8 applies both to its business booked in Bahrain and in the licensee's overseas branchesG . In the case of an overseas insurance licenseeG , Chapter GR-8 applies only to business booked in the licensee's Bahrain branchG .

      Adopted: July 2007

    • GR-8.1.4

      Insurance licenseesG seeking to obtain the CBB's permission to cease business must apply to the CBB in writing, in the form of a covering letter together with any supporting attachments. Unless otherwise directed by the CBB, the following requirements must be provided in support of the request:

      (a) Full details of the business to be terminated;
      (b) The rationale for the cessation;
      (c) If applicable, an assessment of the impact of the cessation on any customersG directly affected by the cessation, and any mitigating factors or measures;
      (d) If applicable, an assessment of the impact of the cessation on the licensee'sG remaining business and customersG , and any mitigating factors or measures;
      (e) Evidence that the proposed cessation has been duly authorised by the licenseeG (such as a certified copy of a Board resolution approving the cessation);
      (f) How the licenseeG proposes to cease business;
      (g) Notice of an Extraordinary Meeting setting out the agenda to discuss and approve the cessation, and inviting the CBB for such meeting;
      (h) Formal request to the CBB for the appointment of a liquidator acceptable to the CBB;
      (i) A cut-off date by which the licenseeG will stop its operations;
      (j) If the insurance licenseeG wishes to cease its whole business, confirmation that the licenseeG will not enter into new business with effect from the cut-off date;
      (k) The audited accounts of the licenseeG as of the last date on which it stopped operations. The commencement of the period covering these final accounts should be the beginning of the financial year of the licenseeG ; and
      (l) The final liquidator's report of the licenseeG .
      Amended: October 2011
      Adopted: July 2007

    • GR-8.1.5

      LicenseesG intending to apply to cease business are advised to contact the CBB at the earliest possible opportunity, prior to submitting a formal application, in order that the CBB may determine the nature and level of documentation to be provided and the need for an auditorG or other expert opinion to be provided to support the application. The documentation specified in Paragraph GR-8.1.4 may be varied by the CBB, depending on the nature of the proposed cessation, such as the materiality of the business concerned and its impact on customersG .

      Amended: October 2011
      Adopted: July 2007

    • GR-8.1.6

      Approval to cease business will generally be given where adequate arrangements have been made to offer alternative arrangements to any affected customersG . The CBB's approval may be given subject to any conditions deemed appropriate by the CBB. In all cases where additional requirements are imposed, the CBB shall state the reasons for doing so.

      Adopted: July 2007

    • GR-8.1.7

      When the CBB has given its approval to an application to cease business, the licenseeG must publish a notice of its intention to cease business in two local newspapers (one in Arabic, the other in English). Notices must also be displayed in the premises (including any branch offices) of the licensee concerned. These notices must be given not less than 30 calendar days before the cessation is to take effect, and must include such information as the CBB may specify. If the insurance licenseeG had entered into direct contracts of insuranceG relating to risks situated in a jurisdiction other than Bahrain, a notice must also be published in two national newspapers in the jurisdiction concerned.

      Amended: October 2011
      Amended: October 2007
      Adopted: July 2007

    • GR-8.1.8

      If the insurance licenseeG wishes to go into run-off or liquidate its business, the CBB will revise its license to restrict the firm from entering into new contracts of insuranceG . The insurance licenseeG must continue to comply with all applicable CBB requirements until such time as it is formally notified by the CBB that its obligations have been discharged and that it may surrender its license.

      Amended: October 2011
      Amended: July 2007

    • GR-8.1.9

      An insurance firmG in run-off must continue to meet its contractual and regulatory obligations to policyholdersG .

      Amended: July 2007

    • GR-8.1.10

      The notices referred to in Paragraph GR-8.1.7 must include a statement that written representations concerning the cessation of business may be sent to the CBB before a specified day, which shall not be earlier than thirty calendar days after the day of the first publication of the notice. The CBB will not decide on the application until after considering any representations made to the CBB before the specified day.

      Amended: October 2011
      Amended: July 2007

    • GR-8.1.11

      If no objections to the cessation of business are upheld by the CBB, then the CBB will issue a written notice of approval for the cessation of business and where the insurance licenseeG is leaving the market such notice will also provide for the surrender of the license and for the return of the insurance licensee'sG statutory deposit.

      Amended: July 2007

    • GR-8.1.12

      As per Article 49 of the CBB Law, the CBB shall publish its approval to cancel or amend a license in the Official Gazette as well as in two local daily newspapers (one in Arabic, and the other in English), once this decision has been implemented. The publication costs of these notices are to be met by the licensee concerned.

      Adopted: July 2007
      Amended: October 2007

    • GR-8.1.13

      Upon application, the CBB may grant exemptions to the disclosure requirements of Paragraphs GR-8.1.7 for captive insurersG . However, all other provisions of Chapter GR-8 apply in full to captive insurersG .

      Amended: July 2007

    • GR-8.1.14

      Upon satisfactorily meeting the requirement set out in GR-8.1.4, the insurance licensee must surrender the original license certificate issued by the Licensing & policy Directorate at the time of establishment, and submit confirmation of the cancellation of its commercial registration from the Ministry of Industry, Commerce and Tourism.

      Added: October 2016

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