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Member, Beacon International Group, Ltd.
MANAMA, Bahrain Branches of foreign insurers in Bahrain will not be subject to minimum capital requirements if a proposal by the Central Bank of Bahrain is adopted.
The proposal to amend Bahrain's capital requirements gives consideration to support provided to the branches from their parent companies. While the branches would not have to maintain minimum capital amounts, they would remain subject to solvency margins of at least 500,000 dinars ($1.33 million) for general insurance and 400,000 dinars ($1.06 million) for life business.
"We feel the new approach would be more equitable as it takes into account the support provided to the branch by its parent company overseas while recognizing that a minimum net asset value must be maintained in relation to the volume of business undertaken in Bahrain," said Abdul Rahman Al Baker, executive director of financial institutions supervision at the Manama-based CBB.
If adopted, the new requirements would be effective at the end of this year.