Law on Insurance Activity in the Republic of Kazakhstan.

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The file for download is given in the version current at the time it was posted on the site. The law has been amended many times, so before applying its provisions be sure to check against the current version in the "Adilet" information and legal system of normative legal acts of the Republic of Kazakhstan (adilet.zan.kz).

Purpose and subject of the law

The Law of the Republic of Kazakhstan "On Insurance Activity" is the basic act that defines how the country's insurance market is organized. It establishes the rules for creating and operating insurance companies, the procedure for their licensing and supervision, requirements for financial stability, and the rules for the activity of insurance intermediaries. The main purpose of the law is to ensure the protection of the rights and legitimate interests of policyholders, insured persons and beneficiaries and to maintain the stability of the insurance market.

The law works in conjunction with other acts: the general rules of the insurance contract are contained in the Civil Code of the Republic of Kazakhstan, and individual types of compulsory insurance are regulated by special laws — for example, on compulsory motor third-party liability insurance (MTPL), on compulsory employee accident insurance (OSRNS), and on compulsory liability insurance of owners of hazardous facilities. The guaranteeing of insurance payments on the liquidation of an insurer is regulated by separate legislation on the Insurance Payments Guarantee Fund (IPGF).

Who the law affects

  • Insurance and reinsurance companies – requirements for establishment, capital, managers, reserves and reporting.
  • Insurance holdings and major participants – the procedure for acquiring a significant stake in insurance companies.
  • Insurance intermediaries – insurance brokers and insurance agents, their rights, obligations and restrictions.
  • Actuaries – requirements for actuarial activity.
  • Policyholders and insured persons – through the provisions on the protection of their rights and disclosure of information.
  • The authorized body – the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (ARDFM), which carries out licensing, regulation and supervision.

Main provisions

Sectors and classes of insurance

The law divides insurance into the sectors "life insurance" and "general insurance" and identifies classes of insurance within them. An insurance company has the right to engage only in those classes for which it holds a licence. For the client this is a practical point: before concluding a contract, make sure that the company holds a licence for the required class. The list of insurers can be viewed in the insurance companies section.

Licensing and supervision

Insurance activity and the activity of an insurance broker are carried out only with an ARDFM licence. The regulator sets requirements for managers and for the risk management and internal control system, checks compliance with legislation and may apply supervisory response measures and sanctions up to and including revocation of the licence.

Financial stability

Insurance companies are required to comply with prudential standards, including capital and solvency margin requirements, to form insurance reserves and to place assets in accordance with the established rules. These requirements exist so that the insurer has funds for payments under the obligations it has assumed.

Reinsurance

The law regulates the transfer of part of risks to reinsurers, including non-residents. Reinsurance makes it possible to accept large risks for insurance without jeopardizing the company's financial stability. For more, see the reinsurance section.

Insurance intermediaries

An insurance broker acts in the client's interests: selects insurance protection, arranges the conclusion of the contract and helps in the settlement of losses. An insurance agent acts on behalf of and on the instructions of an insurance company. The law distinguishes between their status, powers and liability.

Consumer rights protection

The law obliges market participants to disclose information on the terms of insurance and to consider clients' appeals, and provides mechanisms for out-of-court dispute resolution, including appeal to the insurance ombudsman.

What matters in practice for a policyholder

  • check that the insurer holds a licence for the required class of insurance;
  • read the insurance rules and the contract carefully – they determine the cover, exclusions and payment procedure;
  • observe the deadlines for notifying of an insured event and submitting documents;
  • keep all documents under the contract and correspondence with the insurer;
  • in a dispute, first apply to the insurer in writing, then use out-of-court mechanisms and the courts.

The meanings of the terms used in the law and in contracts can be clarified in the glossary of insurance terms.

If you need to understand how the provisions of the law apply in your situation, you can get a consultation from an insurance broker.