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  • GR-9 Appointed Representatives

    • GR-9.1 Key Provisions

      • GR-9.1.1

        An insurance firm may appoint as its representative for its Bahrain business a person who is not licensed by the CBB, known as an appointed representative. However, appointed representatives must be registered with the CBB. Insurance firms that appoint appointed representatives are called licensed principals.

        Amended: October 2009
        Amended: July 2007

      • GR-9.1.1A

        This Chapter does not apply to insurance firms whose business is limited to reinsurance.

        Adopted: October 2009

      • GR-9.1.1B

        Insurance licensees, other than insurance firms, may not appoint appointed representatives. More specifically, insurance brokers may not appoint representatives acting on their behalf.

        Adopted: October 2009

      • GR-9.1.1C

        The requirements for registration and minimum qualifications of appointed representatives are effective 1st January 2010 (refer to ES-2.5.4).

        Adopted: October 2009

      • GR-9.1.2

        Appointed representatives are persons acting on behalf, and under the overall control of a licensed principal. They are effectively an extension of the licensed principal. The licensed principal takes full responsibility for the actions of their appointed representatives vis-à-vis the CBB. Note that only insurance firms may act as licensed principals.

        Amended: July 2007

      • GR-9.1.3

        An appointed representative may 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 representative is a corporate entity, its memorandum and articles of association must include the activities of the appointed representative of 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

      • GR-9.1.3A

        An appointed representative must be registered with the CBB in accordance with Paragraph AU-1.3A.

        Adopted: October 2009

      • GR-9.1.4

        An appointed representative may have agencies with no more than one licensed principal per 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

      • GR-9.1.4A

        An appointed representative that 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

      • GR-9.1.5

        An appointed representative may only undertake the types of business for which the licensed principal is authorised to undertake by the CBB.

        Amended: July 2007

      • GR-9.1.5A

        An insurance firm can only nominate appointed representatives that meet minimum qualifications and fit and proper requirements of the CBB.

        Adopted: October 2009

      • GR-9.1.5B

        For purposes of Paragraph GR-9.1.5A, the minimum qualifications of appointed representatives recognised 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

      • GR-9.1.5C

        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

      • GR-9.1.5D

        Where the appointed representative is 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 representative to ensure that potential policyholders are 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

      • GR-9.1.6

        In the case where an appointed representative acts as agent for more than one licensed principal, it must arrange its business to achieve reasonable segregation between principals to allow each licensed principal to carry out monitoring of its business under its agency agreement.

      • GR-9.1.7

        An appointed representative must maintain separate bank accounts for any monies relating to premiums and claims handled on behalf of each licensed principal.

      • GR-9.1.8

        An appointment by an insurance firm of an appointed representative must 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 principal is 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 principal against the appointed representative or vice versa);
        (d) The type(s) of business for which the agency is granted;
        (e) That the appointed representative allows full access to the CBB, the licensed principal and the licensed principal's external 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 representative is acting solely as agent of the licensed principal in 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 representative is prohibited from carrying on agencies with other licensed principals for 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

      • GR-9.1.9

        The powers of access given to the CBB and the licensed principal's auditors by Sub-paragraph GR-9.1.8 (e) are in order to ensure that the agency between the licensed principal and the appointed representative does not impede the effective supervision of the licensed principal by the CBB.

        Amended: July 2007

      • GR-9.1.10

        Once appointed, the licensed principal must 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 representative acting within the real or implied authority of the licensed principal. This is without prejudice to any rights of redress the licensed principal may have at law against the appointed representative.

        Amended: July 2007

      • GR-9.1.11

        The licensed principal must ensure that the appointed representative complies 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

      • GR-9.1.12

        The licensed principal must ensure that periodic monitoring of the appointed representative is undertaken to ensure the adequacy of the systems and controls in place. The licensed principal or an appropriately qualified independent party may undertake this monitoring.

      • GR-9.1.13

        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

      • GR-9.1.14

        An appointed representative must at all times act within the limits of his authority in the conduct of activities covered by the terms of the agency agreement.

      • GR-9.1.15

        An appointed representative must disclose to clients the relationship that he has with the licensed principal and any other parties that could reasonably be considered material to the insurance contract.

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