The Bahrain Monetary Agency (BMA), the country’s central bank and financial services regulator, announces the launch of its new insurance rulebook, which will provide Bahrain with one of the most advanced regulatory regimes in the Middle East and Northern Africa region.
The new insurance rulebook overhauls the existing insurance regulatory regime bringing it in line with the principles and standards set by the International Association of Insurance Supervisors (IAIS), of which the BMA is a member. This initiative is a key component of the BMA’s efforts to consolidate the country’s position as a regional insurance hub.
Although the insurance penetration is currently low as insurance premiums represent only 1% of GDP in the MENA regions, the opportunities for growth in the insurance industry in MENA regions is promising due to rapid growing population, which offers rich prospects for business development. The World Bank estimates that the MENA region population will reach 330 million by 2010.
It is predicted that the insurance market in the Middle East region could reach $US44bn. Another key factor contributing to the growth of this sector is the rise of compulsory insurance and the government’s efforts to encourage greater private sector involvement in health and pension provisions.
The new insurance rulebook is a comprehensive document of rules and covers issues such as: the segregation of shareholder and policyholder funds, capital adequacy and solvency, valuation of assets and liabilities, corporate governance; and the conduct of business.
The new insurance rulebook addresses both conventional and Islamic insurance (takaful / retakaful). In so doing, Bahrain will become one of the few countries in the world to have a comprehensive set of regulations for Islamic insurance firms.
PricewaterhouseCoopers advised the BMA in the drafting of the new insurance regulations. Mr. Rasheed Al Maraj, Governor of the Bahrain Monetary Agency, comments: “We consulted with international players in the insurance industry who told us a key consideration for where they establish themselves is the credibility of the local regulator. While BMA has over 30 years of experience as the leading regulator in the region, we continue to seek to reinforce this status by developing our regulatory framework to ensure financial stability and international credibility and recognition. “
© 2005 Mena Report (www.menareport.com )