THE KINGDOM OF BAHRAIN’S NATIONAL RISK ASSESSMENT 2025

35 152. Overall, the regulatory framework governing Financing and Micro-Financing companies in Bahrain imposes significant restrictions on their business activities, funding sources, and client base. Therefore, the sector’s overall ML risk is classified as medium-low . Insurance Sector Introduction 153. The Insurance sector in Bahrain is made up of two main segments, conventional and takaful. Bahrain's domestic Insurance sector is comprised of Locally Incorporated Firms and Overseas Insurance Firms (branches of foreign companies) conducting Insurance, Reinsurance, Takaful, Retakaful and Captives business in the Kingdom of Bahrain. 154. The business classes in the insurance sector include ‘Long-term Insurance’ such as ones relating to ‘Group Life Assurance,’ ‘Participating with Profit Policies,’ and ‘Children’s Education Policies.’ Other classes include ‘Fire, Property & Liability Insurance, ‘Marine & Aviation Insurance,’ ‘Motor Insurance,’ ‘Medical Insurance,’ and other classes of insurance relating to ‘Miscellaneous Financial Loss’ and ‘Engineering.’ 155. The CBB acts as the regulator of the insurance sector and provides an efficient regulatory framework for financial services firms operating in Bahrain. The CBB’s requirements include, but are not limited to, conducting a comprehensive risk assessment through implementing customer due diligence measures, appropriate transaction screening and monitoring, sufficient training of relevant staff, adequate record keeping, and prompt suspicious transaction reports filing. Overall Risks 156. Insurance firms in the Kingdom of Bahrain are obligated to adhere to the AML/CFT rules and regulations. Insurance companies must comply with the requirements outlined in Financial Crime Module of Volume 3 of the CBB Rulebook which includes the regulatory requirements to combat money laundering, terrorist financing and proliferation financing. 157. These requirements include implementing a risk-based approach to assess and manage ML/TF risks, conducting CDD measures and implementing mechanisms to review and identify abnormal customer activity. 158. Adopting a risk-based approach, insurance firms are subject to on-site supervision by the CBB. The CBB employs a combination of supervisory information and risk assessment tools to profile licensees and proactively identify those requiring additional supervisory attention. 159. As per the CBB Rulebook requirements, insurance licensees generally do not accept premiums in cash. In addition, brokers, individual appointed representatives, and corporate non-financial appointed representatives are prohibited from receiving client money as specified in the Client Money Module of the CBB Rulebook (Volume 3). 160. Insurance companies, including companies offering life insurance products, typically do not accept premiums in cash. For general insurance policies, individual premiums are small and may involve cash