Bahrain RERA: Insurance bond on escrow accounts
Shaikh Salman Bin Abdulla Al-Khalifa, president of the Survey and Land Registration Bureau and chairman of the Board of the Real Estate Regulatory Authority (RERA), launched an Insurance Bond on escrow accounts for real estate projects. Speaking at the event, he said, “The provision of this new Insurance Bond on escrow accounts for real estate projects, provided by local insurers who are regulated by the Central Bank of Bahrain and members of the Bahrain Insurance Association and fully supported by an AA rated world’s largest reinsurer – Swiss RE, is a strong vote of confidence not just in the new real estate regulatory environment but also in the broader real estate sector and indeed the Kingdom of Bahrain.”
He added: “We are pleased to launch this innovative new insurance bond, as it is the first of its kind in the GCC region.”
The RERA chairman also pointed out that this Insurance Bond would bring stronger buyer and investor protection, improved cashflow management for developers, increased availability of finance for developers and investors and greater efficiencies for a range of organisations including RERA and insurance companies.
As a mandate, developers of off-plan sale projects will have to meet RERA regulatory requirement by either depositing funds in a specified development project escrow account, a bank guarantee, or by the insurance bond.
Yahya Nooruddin, chairman of Bahrain Insurance Association said, “BIA is pleased to be part of this RERA initiative, and we are optimistic that the Insurance Bond on escrow accounts for real estate projects will lead to greater innovation in the real estate sector.”
He also added, “It is a step forward in increasing financial resilience for this important sector of the Bahrain economy. We look forward to building on this successful collaboration and partnership over the coming years”.
Abdeladim Bousselam, vice president, Swiss Re, said, “We at Swiss Re are delighted to have worked with RERA and BIA in developing and launching this Insurance Bond on escrow accounts for real estate projects in the Kingdom of Bahrain.”
Swiss RE conducted due diligence on the Bahrain real estate sector and on RERA’s internal regulations before committing to providing the insurance bond on escrow account for real estate projects in the Bahrain market.
