The Bahrain Monetary Agency (BMA) has lifted a key restriction on foreign insurance brokers and loss adjusters operating in Bahrain.
They are no longer required to have a local partner, under a major move by the BMA to enhance market access and stimulate growth in the industry.
Earlier regulations required majority Bahraini ownership, of at least 51%, in companies operating as insurance brokers and loss adjusters.
“Such businesses are now allowed to operate as 100% foreign-owned firms,” says Tawfiq Isa Shehab, director, insurance supervision, at the BMA.
A circular, repealing the earlier requirement on local participation, has been issued by HE Shaikh Ahmed bin Mohammed Al Khalifa, governor of the BMA.
The circular, of March 23, replaces relevant provisions of the Implementing Regulations of Legislative Decree No 17 of 1987.
“The new move removes impediments preventing international players from coming into the Bahrain market,” says Shehab.
“We hope this will encourage international firms to use Bahrain as the base for their regional operations.”
The new move is among a series of measures being taken by the BMA to further advance Bahrain’s promising insurance industry.
Since assuming responsibility of regulating the insurance sector in August 2002, the BMA has been implementing a new strategic plan to reinforce Bahrain’s status as a major insurance centre in the Middle East region.
A key element of the new strategy includes a major upgrade of insurance regulation.
Several consultations are being undertaken to develop a practical and workable framework, which delivers appropriate protection without overloading the industry with regulatory costs.
The consultations cover such issues as captive insurance, solvency, conduct of business, high level requirements, risk management and financial crime, enforcement, BMA reporting and public disclosures, intermediaries and Islamic insurance (takaful).
“Bahrain’s insurance industry has significant growth potential. It is amongst the most developed in the region and insurance penetration rates, though higher than elsewhere, are low enough to offer significant room for growth,” adds Shehab.