US embassy cable - 04MANAMA311

UNCLAS MANAMA 000311 
 
SIPDIS 
 
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 
U.S. FIRMS 
 
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. 
FORD