The legislation governing insurance in the Republic of Kazakhstan may be divided into two categories: (i) the legislation setting out the requirements to establishment and operation of insurance entities, and (ii) the legislation governing the relations between insurance entities and their clients.
The first category consists of the legislative acts which regulate the establishment, operation and liquidation of insurance entities (insurance companies, insurance brokers, actuaries, etc.).
Insurance legislation is characterized by heavy regulations, strict requirements to financial stability and powerful mandate of the Agency to regulate and develop the financial market and, in particular, to control the performance of insurance market participants. Among the key requirements to insurance business it would be worth noting the following:
• insurance companies may operate only as joint stock companies;
• an insurance company must obtain a license and an appropriate permit for each type of insurance;
• the charter capital of a newly established insurance company may range between 10.5 million and 73 million US dollars depending on the branch and class of insurance (e.g. general insurance, life insurance, etc.);
• an insurance company must comply with the prudential standards set by the competent authority; and
• ban on direct or indirect possession, use and disposal of voting shares in an insurance company by legal entities incorporated in offshore jurisdictions with the exemption of insurance (reinsurance) organizations being subsidiaries of nonresident insurance (reinsurance) organizations of the Republic of Kazakhstan with the minimum required credit rating awarded by one of the rating agencies the list of which is determined by the competent authority.
The second category consists of the legislative acts which directly regulate the relations between an insurance company and its clients with respect to the insurance of risks.
Insurance in the Republic of Kazakhstan may be compulsory or voluntary.
The terms and conditions of the following compulsory types of insurance are determined by law and may not be changed by an insurance company or a client: Please see below the list of the most commonly used types of compulsory insurance:
• compulsory environmental insurance;
• compulsory insurance of civil liability of owners of transport vehicles;
• compulsory insurance of the employer’s liability to employees for work-related bodily injury or disease;
• compulsory social insurance; and
• compulsory social health insurance.
The terms and conditions of voluntary insurance are determined by an agreement between the parties, i.e. the insurant and the insurer.
