The law defining the admission of foreign insurers to the Kazakhstan market and the procedure for their operation came into force on January 2, 2021 in accordance with the commitments made by Kazakhstan at the time of accession to the WTO. zakon.kz reports with reference to fingramota.kz.

In 2020, the equity of Kazakhstani insurance companies will increase by 20% to 665 billion tenge. The market is characterized by a fairly high level of stability and solvency. The entry of foreign insurance (reinsurance) companies into the market of Kazakhstan will allow them to enter foreign markets, large foreign companies will have access to the national insurance market.

The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan has strengthened the requirements not only for determining the procedure for issuing permits to foreign insurers to operate in the Kazakhstan market, but also for their regulation, – said Deputy Chairman Maria Khadzhieva.

To start financial activities in the territory of the Republic of Kazakhstan, a foreign financial organization must first obtain a permit to open a branch, and then obtain the appropriate license from the Agency.

Branches of foreign insurance companies must be participants in the compulsory insurance indemnity guarantee system and have a participation agreement with the Insurance Indemnity Guarantee Fund JSC. Payments under contracts with branches are guaranteed at the expense of JSC “Insurance Payments Guarantee Fund”, which in case of closure of the branch will allow to make continuous payments under insurance contracts within the guaranteed classes of insurance and ensure continuity in fulfilling obligations under the insurance portfolio. explained the Deputy Chairman of the Financial Regulator.

To protect the interests of consumers of financial services, a foreign branch must form assets that are accepted as a reserve and place them in a current account in a second-tier bank in Kazakhstan with a high level of reliability. The total assets of a non-resident insurance (reinsurance) organization of the Republic of Kazakhstan shall not be less than the equivalent of 5 billion US dollars, with work experience of at least 10 years in all branches and classes of insurance.

A branch of a non-resident insurance organization may carry out insurance activities in the field of general insurance or life insurance, as well as similar reinsurance activities for Kazakhstani insurance companies upon obtaining the relevant licenses.

Prudential regulation of branches of non-resident insurance (reinsurance) organizations instead of the minimum required amount of authorized capital for a newly established insurance (reinsurance) organization, the minimum amount of RPA (from 1.5 million MCI to 10.5 million MCI depending on the insurance industry) to). The funds will be placed in the current accounts of second-tier banks of the Republic of Kazakhstan with the lowest long-term credit rating on the international scale of rating agency Standard & Poors “BB +” or similar ratings by international rating agencies Moody’s Investors Service and Fitch.

When inspecting the activities of a branch of a non-resident insurance organization, the Agency shall have the right to obtain information from a foreign financial supervisory authority. In this case, in case of detection of risks and shortcomings in the activities of the branch of a non-resident insurance organization, the Agency may require an audit.

A non-resident insurance organization may voluntarily terminate its activity with the permission of a foreign financial supervisory authority. It will also be forcibly terminated due to the revocation of the license by the Agency. But as I said, in this case, payments under the current terms of customers are guaranteed. The grounds for termination of the activity may be a violation of the legislation of the Republic of Kazakhstan by a branch of the insurance organization, revocation of the license of a non-resident organization or its liquidation, M. Khadzhieva concluded.