The Bahrain Monetary Agency (BMA) has issued a consultation paper, setting out proposed rules and guidance for insurance intermediaries and insurance managers operating in Bahrain.
The rules outline requirements for insurance intermediaries, namely brokers, consultants and appointed representatives, as well as insurance managers, who sell or advise on insurance products. The requirements cover various items for each of these categories, including licensing criteria, capital requirements, professional indemnity insurance and record keeping.
“The rules being proposed address the unique role and contribution of these market participants in the industry,” said Mr. Anwar Khalifa Al Sadah, Executive Director, Financial Institutions Supervision, at the BMA.
The proposed rules refine some concepts in existing regulation related to insurance brokers and consultants, as well as introduce new categories dealing with insurance managers and appointed representatives. The rules will be included, as a separate module, in the Insurance Rulebook, which is under development by the BMA.
The current consultation paper is the fifth in a series of consultations that has been underway since 2003, as part of a major project to enhance Bahrain’s regulatory framework for the insurance sector.
“Most of the material is now ready and we expect to issue, in quick order over the next two months, further consultations on remaining issues,” said Mr. Al Sadah.
The Insurance Rulebook, scheduled for issuance in October this year, will place Bahrain at the forefront of regulatory standards for insurance in the region. The Rulebook will become effective for existing licensees on 1st January 2005. For new licensees, it will come into effect from the time of its issuance.
“We are conscious that the Rulebook will represent a step change in the supervision of insurance firms, and we have, thus, aimed for a regime appropriate to the industry’s current level of development,” said Mr. Al Sadah.
“However, we firmly believe that, in the end, everyone stands to benefit from better supervision; it will give the insurance industry greater credibility and customers will benefit from high quality customer service. We are working with industry in developing the Rulebook and appreciate the contribution of market players to this important exercise.”
BMA has an established policy of consulting with industry prior to the issuance of any new rules or amendments to existing rules, he pointed out.
The proposals contained in the consultation paper have been developed with the assistance of specialist regulatory consultants and are fully in line with standards applied in other leading insurance centers.
The consultation period runs until 31st July 2004. The consultation paper will shortly be available on the BMA website at www.bma.gov.bh
“We welcome comments from industry and other interested parties to the proposals contained in the consultation paper,” said Mr. Al Sadah.
© 2004 Mena Report (www.menareport.com )