This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS MANAMA 000311
DEPT FOR EB/TPP/BTA AND NEA/ARP
DEPT PASS USTR:JBUNTIN AND CBLISS
USDOC FOR 4520/MAC/ITA/ONE:CLOUSTAUNAU
TREASURY FOR LAILEE MOGHTADER
CAIRO FOR STEVE BONDY
E.O. 12958: N/A
TAGS: EFIN ETRD BA
SUBJECT: BMA REVIEWING OPENING OF LOCAL INSURANCE MARKET TO
REF: A. MANAMA 272
B. MANAMA 269
1. Bahrain Monetary Agency (BMA) insurance regulators are
looking carefully at the possibility of opening the local
insurance market to U.S. competitors 24-30 months after an
FTA entes into force, BMA Governor Shaikh Ahmed bin Muhammad
Al-Khalifa told Charge on March 8. Small local brokers, he
continued, will need an adjustment period to prepare for
competition with large American entrants to the market.
Given his responsibility for protecting local business in the
financial sector, Shaikh Ahemd said he has no choice but to
provide some transition period for local industry.
2. Shaikh Ahmed added that he is adopting the same philosophy
with respect to new legislation and regulations he expects to
come on line this summer. The BMA is currently revising
legislation governing the sector as part of an overarching
central bank law governing the regulation of all financial
institutions in Bahrain. The law, which was drafted with the
assistance of PricewaterhouseCoopers in London, follows the
British FSA and Singaporean regulatory models of having a
generally-worded law supported by a very specific set of
central bank issued regulations. Shaikh Ahmed said some
regulations have been drafted and circulated to BMA licensees
for comment. At the end of the process, he said, Bahrain
will have expanded from meeting three IIS standards to 17.
Once the laws and regulations enter into force, Shaikh Ahmed
said he intends to give the BMA's licensees six months to
implement the new rules.
3. Shaikh Ahmed provided us with copies of the new
regulation consultation papers submitted to the BMA's
licensees, and promised to forward an English copy of the
draft central bank law to the Embassy as soon as possible.
Post will forward the consultation papers to USTR via e-mail
and send the law as soon as it is received.