The President of the Survey and Land Registration Bureau (SLRB) and Chairman of the Board of Directors of the Real Estate Regulatory Authority (RERA) His Excellency Shaikh Salman bin Abdulla Al Khalifa launched the insurance bond on real estate escrow accounts on Monday, 28 January 2019.
Praising this initiative, the first of its kind in the region, His Excellency revealed that the insurance bond on escrow accounts will be provided by local insurance companies that are regulated by the Central Bank of Bahrain, and are members of the Bahrain Insurance Association (BIA).
He added that the escrow account insurance policy will provide greater protection for buyers and investors and will secure the rights of all parties. This, in turn, will contribute to improving the management of the financing of real estate developers and the effectiveness of concerned institutions, including the Real Estate Regulatory Authority and insurance companies. His Excellency called the developers of off-plan sales projects to implement the new regulatory requirements, noting that this policy is a new product in the Bahraini insurance market.
For his part, the CEO of the Real Estate Regulatory Authority His Excellency Shaikh Mohammed bin Khalifa Al Khalifa said that this product is one the best solutions and practices in the world for protecting existing and in-progress off-plan sale projects.
He added that we announced this insurance policy in cooperation with Swiss RE, one of the most renown insurance institutions in the world, and the Bahrain Insurance Association. Real estate developers now have three options available to them, namely: either depositing 20% of the project’s value, buying this new insurance bond or providing a bank deposit of 20% of the project’s value. Without one of these, a developer will not be able to undertake an off-plan sale project. He said he was pleased with the launch of this initiative, as it is the first of its kind in the region.
H. E. Shaikh Mohammed bin Khalifa pointed out that executive regulations organizing the affairs of real estate agents, brokers and developers and escrow accounts will be implemented to complete all aspects of this initiative.
On the same subject, Chairman of Bahrain Insurance Association Mr. Yahya Noureddin expressed his pleasure with the initiative, saying that he is optimistic that the insurance bond will increase the effectiveness of the real estate sector in the Kingdom. He added that 6 insurance companies have joined the initiative, which indicates that it will succeed.
Similarly, Mr. Abdul Azim Bousselam, Vice President of Swiss RE said that they are delighted to work with the Real Estate Regulatory Authority and Bahrain Insurance Association to develop and launch the insurance bond on escrow accounts in the Kingdom of Bahrain.
Swiss RE has conducted the necessary research and studies on the real estate sector in Bahrain and the internal regulations of the Real Estate Regulatory Authority before committing to providing the insurance bond on escrow account in the local market.