Insurance laws Bahrain
The insurance industry in the Kingdom of Bahrain is well-developed and regulated by a modern legal framework designed to promote financial stability and protect consumers. The main regulatory authority is the Central Bank of Bahrain (CBB).
Here are the key aspects of insurance laws in Bahrain:
1. Regulatory Framework:
Central Bank of Bahrain (CBB): The CBB has been the sole regulator for Bahrain's financial sector, including insurance, since 2002. Its authority is established by the Central Bank of Bahrain and Financial Institutions Law 2006.
CBB Rulebook: The CBB issues a comprehensive "Rulebook" for the insurance sector (Volume 3), which provides detailed regulations on licensing, capital and solvency requirements, corporate governance, and market conduct.
International Standards: Bahrain's insurance frameworks are designed to be in line with the core principles of the International Association of Insurance Supervisors (IAIS).
2. Licensing and Operations:
Commercial Registration: To operate in Bahrain, an insurance entity must first obtain a commercial registration certificate from the Ministry of Industry and Commerce.
CBB License: In addition to commercial registration, a license from the CBB is mandatory for any company to carry out insurance operations in Bahrain.
No "Composite" Insurance: Since 2005, Bahraini law has prohibited a single entity from offering both long-term (life) and short-term (non-life) insurance. Companies established before this date are allowed to continue operating as composite insurers.
Foreign Presence: The government of Bahrain allows 100% foreign direct investment in the insurance industry, and foreign reinsurance companies can operate on a cross-border basis.
3. Compulsory Insurance:
Motor Vehicle Third-Party Liability: This is mandatory for all motor vehicles operating in Bahrain, as per Legislative Decree No. 3 of 1987.
Workers' Compensation Insurance: This is another compulsory form of insurance.
Health Insurance Law (Law No. 23 of 2018): This law establishes a mandatory health insurance system, which is being implemented in phases. It outlines the health benefits for citizens, residents, and visitors.
Social Insurance: The Social Insurance Law (Legislative Decree No. 24 of 1976), as amended, governs the social insurance system. This includes old-age pensions, employment injury benefits, and unemployment insurance.
4. Policyholder Protection and Legal Principles:
Civil Code: The general law of insurance contracts is largely governed by the Bahraini Civil Code.
Favorable to Insureds: Provisions in the Civil Code are generally considered favorable to the insured, for example, by stipulating that any conditions leading to the voidance of a policy must be prominently highlighted.
Motor Compensation Fund: The CBB, in coordination with the Bahrain Insurance Association, established a "Motor Compensation Fund" to compensate victims of hit-and-run accidents or accidents involving uninsured vehicles for death or bodily injury.
Online Insurance Aggregators: The CBB has also introduced rules for online insurance aggregators to modernize the market and provide consumers with more transparent choices.
RELATED Blog
0 comments