CBB Volume 3: Contents
GR-9 Appointed Representatives
GR-9.1 Key Provisions
insurance firmmay appoint as its representative for its Bahrain business a person who is not licensed by the CBB, known as an appointed representative. However, appointed representativesmust be registered with the CBB. Insurance firmsthat appoint appointed representativesare called licensed principals.Amended: October 2009
Amended: July 2007
This Chapter does not apply to
insurance firmswhose business is limited to reinsurance.Adopted: October 2009
Insurance licensees, other than insurance firms, may not appoint appointed representatives. More specifically, insurance brokersmay not appoint representatives acting on their behalf.Adopted: October 2009
The requirements for registration and minimum qualifications of
appointed representativesare effective 1st January 2010 (refer to ES-2.5.4).Adopted: October 2009
Appointed representativesare persons acting on behalf, and under the overall control of a licensed principal. They are effectively an extension of the licensed principal. The licensed principaltakes full responsibility for the actions of their appointed representativesvis-à-vis the CBB. Note that only insurance firmsmay act as licensed principals.Amended: July 2007
appointed representativemay be a natural or corporate person. An appointed representative may be a CBB licensed firm (e.g. a bank) that does not hold any of the permissions of insurance firm, insurance broker, or insurance consultant. Where the appointed representativeis a corporate entity, its memorandum and articles of association must include the activities of the appointed representativeof the CBB licensed insurance firm, as required under Resolution 11 issued as per Article 74 of the CBB Law.Amended: October 2009
Amended: July 2007
appointed representativemust be registered with the CBB in accordance with Paragraph AU-1.3A.Adopted: October 2009
appointed representativemay have agencies with no more than one licensed principalper type of business. For the purposes of this requirement the types of business are as follows:(a) General insurance as defined in Paragraph AU-1.4.9; and(b) Long-term insurance (as defined in Paragraph AU-1.4.8).Amended: October 2009
Amended: July 2007
appointed representativethat is authorised to conduct both Islamic and conventional business by virtue of its license provided by the CBB, may have different agencies per type of business, for both Islamic and conventional insurance business.Adopted: October 2009
appointed representativemay only undertake the types of business for which the licensed principalis authorised to undertake by the CBB.Amended: July 2007
insurance firmcan only nominate appointed representativesthat meet minimum qualifications and fit and proper requirements of the CBB.Adopted: October 2009
For purposes of Paragraph GR-9.1.5A, the minimum qualifications of
appointed representativesrecognised by the CBB are:(a) For general insurance, the Award in General Insurance from the Chartered Insurance Institute (CII) and the Bahrain Institute of Banking and Finance (BIBF); and(b) For long-term insurance, the Award in Financial Planning from the Chartered Insurance Institute (CII) and the Bahrain Institute of Banking and Finance (BIBF).Adopted: October 2009
Upon written application to the CBB, equivalent or higher qualification from an internationally recognised insurance institute may be acceptable, provided it substantially covers the core syllabuses of the minimum qualifications outlined in Paragraph GR-9.1.5B.Adopted: October 2009
appointed representativeis a retailer of goods, including motor vehicles, or a travel agent selling insurance policies or helping customers make a claim under the policy and the insurance services provided are complementary to the main activity conducted by the appointed representative, an exemption from the requirements of Paragraph GR-9.1.5B may be sought by the licensed principal. A request for such exemption must be submitted in writing to the Director, Insurance Supervision outlining what alternative training has been provided to the appointed representativeto ensure that potential policyholdersare treated in a fair and equitable manner and that the provision of insurance coverage complies with all the requirements outlined in Module BC, and in particular with Chapter BC-2, The Insurance Code of Practice.Adopted: October 2009
In the case where an
appointed representativeacts as agent for more than one licensed principal, it must arrange its business to achieve reasonable segregation between principals to allow each licensed principalto carry out monitoring of its business under its agency agreement.
appointed representativemust maintain separate bank accounts for any monies relating to premiums and claims handled on behalf of each licensed principal.
An appointment by an
insurance firmof an appointed representativemust be the subject of a written contract of agency. This contract must state, inter alia:(a) The name of the appointed representative;(b) The name of the licensed principal;(c) That the licensed principalis responsible for the actions and conduct of the representative concerned when acting or purporting to act under it (without prejudice to any rights to bring actions for damages by the licensed principalagainst the appointed representativeor vice versa);(d) The type(s) of business for which the agency is granted;(e) That the appointed representativeallows full access to the CBB, the licensed principaland the licensed principal'sexternal auditors, given reasonable notice, to all records relating to the business falling within its agency;(f) The terms and conditions for the handling of and accounting for client money, including a statement that the appointed representativeis acting solely as agent of the licensed principalin the handling of such money;(g) The conditions for cancellation, which cannot alter or cancel the continuing responsibility of the licensed firm to take responsibility for the representative's action and conduct (without prejudice to any rights to bring actions for damages by the licensed firm against the representative or vice versa); and(h) That the appointed representativeis prohibited from carrying on agencies with other licensed principalsfor the same type of business, in accordance with Paragraph GR-9.1.4, or may do so in accordance with Paragraph GR-9.1.4A, for conventional and Takaful insurance.Amended: October 2009
Amended: July 2007
The powers of access given to the CBB and the
licensed principal's auditorsby Sub-paragraph GR-9.1.8 (e) are in order to ensure that the agency between the licensed principaland the appointed representativedoes not impede the effective supervision of the licensed principalby the CBB.Amended: July 2007
Once appointed, the
licensed principalmust take full responsibility for the actions and conduct of the appointed representative, in respect of any matters of compliance with, or breach of, the requirements of the CBB Rulebook that relate to activities of the appointed representativeacting within the real or implied authority of the licensed principal. This is without prejudice to any rights of redress the licensed principalmay have at law against the appointed representative.Amended: July 2007
licensed principalmust ensure that the appointed representativecomplies with the provisions of the CBB Rulebook applicable to the activities being undertaken in accordance with the agency, including, but not limited to:(a) Record-keeping;(b) Business conduct; and(c) Financial crime requirements.Amended: July 2007
licensed principalmust ensure that periodic monitoring of the appointed representativeis undertaken to ensure the adequacy of the systems and controls in place. The licensed principalor an appropriately qualified independent party may undertake this monitoring.
All appointments of
appointed representatives, variations in terms of appointment and cancellations of appointment must be notified in writing to the CBB no later than 5 working days after they have taken place. Such notifications must be addressed to the Director, Licensing & Policy Directorate.Amended: October 2009
Amended: July 2007
appointed representativemust at all times act within the limits of his authority in the conduct of activities covered by the terms of the agency agreement.
appointed representativemust disclose to clients the relationship that he has with the licensed principaland any other parties that could reasonably be considered material to the insurance contract.