23 Aug 2019
BAHRAIN: Central Bank Issues Rules on Insurance Aggregators
The Central Bank of Bahrain (CBB) has issued new rules and clarification on insurance aggregators as the country moves towards further adoption of insurance technology (insurtech).
The amended regulations define an insurance aggregator as an intermediary with an insurance broker’s licence that also operates on an online platform or app, and provides insurance policies price comparison as well as facilitating insurance policy purchase on behalf of insurance companies. Typically, such insurance brokers are licensed for one or more of the following types of business: general insurance, unit-linked long-term insurance, long-term insurance, reinsurance, and takaful products.
According to the CBB rules, a broker that receives an insurance aggregator licence is now allowed to provide insurance aggregation and other brokerage services with the central bank’s approval, but only through the online platform. The CBB stressed this point, stating: “The aggregator may not undertake the activities of a traditional broker.” Insurance aggregators that wish to provide additional regulated insurance brokerage services, such as handling of claims for clients, will still need further approvals from the central bank.
The new CBB rules make it one of the few central banks in the region to have introduced regulations specifically relating to insurance aggregators. They are intended to help Bahrain to become one of the leading fintech hubs in the Middle East. Bahrain has long been a major regional centre for insurance, with a number of international insurers and reinsurers, such as Hannover Re, Asia Capital, Chubb and AXA, using it as their regional base. However, in recent years Dubai has become a serious competitor, particularly for reinsurance business, according to a recent report by insurance rating agency, AM Best.