A cooperation agreement makes it possible to document cooperation and to place risks more effectively in conditions of high competition.
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Why a cooperation agreement is needed
Several parties take part in the work of an insurance broker: the client-policyholder, insurance companies, reinsurers where necessary, and partners who help in selecting and supporting insurance protection. When the arrangements between them exist only orally, questions sooner or later arise: who collects information on the risk, within what time documents are passed on, who deals with the client and how when an insured event occurs.
A written agreement removes these questions in advance and makes cooperation transparent. The terms are agreed once and then applied to all subsequent transactions, rather than being discussed anew for each contract. For each party these are clear rules to rely on in a disputed situation.
Who the document may be useful for
- Insurance companies through which the broker places clients’ risks – to fix the procedure for exchanging information and documents.
- The broker’s partners – organisations and specialists who work with the broker in selecting insurance protection for their clients.
- Corporate clients who need to fix the procedure for servicing their insurance programme for a long term.
The standard form posted on this page serves as a basis for negotiations. Each pair of parties agrees the specific terms independently, taking into account the nature of the cooperation.
What is usually set out in the agreement
- Subject of cooperation – which types of insurance and which services the agreement covers.
- Rights and obligations of the parties – who prepares applications and questionnaires, who requests proposals from insurers, who informs the client of the terms.
- Procedure for exchanging information – the forms, channels and deadlines for passing on risk information, documents and changes.
- Confidentiality – obligations to protect trade secrets and clients’ personal data.
- Cooperation when an insured event occurs – who receives the notification, who helps collect documents and monitors the settlement process.
- Settlements – the procedure and deadlines for mutual settlements, if provided for by the nature of the cooperation.
- Term and termination – when the agreement enters into force, how it is extended and how it ends.
- Dispute resolution – negotiations, the pre-trial claims procedure, jurisdiction.
How the agreement helps to place risks
In conditions of high competition, insurers assess not only the risk itself but also the quality of the information submitted. A complete questionnaire, loss history, a description of safety measures and the client’s clear requirements allow the insurance company to prepare a proposal faster and calculate the terms more accurately. If the procedure for preparing such information is fixed in the agreement, applications arrive in a uniform format and review times are shortened.
A broker working with several insurance companies can request proposals from different insurers and compare them not only on price but also on liability limits, deductibles, exclusions and the payment procedure. For large and complex risks, where the capacity of a single insurer is insufficient, reinsurance is brought in, and clear arrangements between the participants are especially important here.
Legal basis
The activities of insurance brokers and insurance companies in Kazakhstan are regulated by civil legislation and by the legislation on insurance and insurance activity, and market participants are supervised by the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (ARDFM). A cooperation agreement may not contradict these norms and does not replace an insurance contract: an insurance contract is concluded between the policyholder and the insurance company, while the agreement regulates the interaction of the participants.
The form file was prepared earlier, so before signing it is worth checking its provisions against the current versions of the laws in the legal information system “Adilet” (adilet.zan.kz) and, if necessary, updating the wording.
How to work with the standard form
- Download the file and read all sections carefully.
- Mark the items that need to be adapted to your cooperation: types of insurance, deadlines, the procedure for exchanging documents.
- Check the wording against the current legislation and your organisation’s internal requirements.
- Agree the amendments with the other party and fix the final version.
- Fill in the details, sign the agreement and keep copies with each of the parties.
Frequently asked questions
Is it mandatory to sign a cooperation agreement?
This is a decision for the parties. However, setting out the terms in writing reduces the risk of misunderstanding and simplifies the work, especially with regular interaction and a large number of contracts.
Can the text of the standard form be changed?
Yes. The standard form is a starting point. The parties are entitled to add to, remove and clarify provisions by mutual consent, recording the changes in writing.
Does the agreement replace an insurance contract?
No. Insurance protection arises only from an insurance contract with a licensed insurance company. The agreement determines how the participants work together in preparing, concluding and supporting such contracts.
If you want to discuss the terms of cooperation or the procedure for placing a specific risk, you can get a consultation.