Draft law of RK on insurance matters presented in Government

Chairman of the National Bank of the Republic of Kazakhstan, Daniyar Akishev, presented the draft law "On amendments and additions to certain legislative acts of the Republic of Kazakhstan on insurance and insurance activities" in the Government of the Republic of Kazakhstan.
Astana city26 September , 11:35

The Head of the National Bank noted that this bill provides for amendments and additions to the three codes and 19 laws. The draft law is aimed at creating conditions that increase the availability of insurance services not only in large cities, but in the regions of the country, improving the quality and reducing the cost of insurance services for the population and business, enhancing the protection of consumer rights of insurance services, and ensuring financial stability of the insurance market.

"During all previous years, the insurance market has not turned into an effective mechanism for protecting the property interests of citizens and businesses. Accordingly, the importance of this market in the development of country's economy remains very low. The slowdown in economic activity in recent years, on the one hand, and the introduction of new technologies in the financial market, on the other, require the fast adaptation and restructuring of existing business processes in all segments of the financial sector, and primarily in the insurance market", said D. Akishev.

He also noted that the size of insurance premiums and assets of all insurance organizations during the past 10 years has not exceeded 1% and 2% of GDP, respectively.

"We not only lose to developed countries, for example, in the OECD countries, the premium to GDP is 7.5%, but also to many of our neighbors in the post-Soviet space. Moreover, the insurance sector will be the first segment where the WTO requirements on access to the market of branches of foreign companies will be implemented. In these conditions, the national insurance sector does not have much time to provide a sustainable development model that can withstand competition from foreign players. Therefore, the changing environment and the challenges facing the insurance market require further improvement of the law", the Head of the National Bank complained.

According to him, if the bill is adopted, it will be possible to conclude contracts through Internet resources of insurance companies without visiting an office or participation of an agent.

"In Kazakhstan, as a result of the introduction of online insurance, the population has the opportunity to enter into insurance contracts in an electronic form. Prior to that, the legal framework did not allow the introduction of such a product in a full form. If the bill is adopted, it will be possible to conclude contracts through Internet resources of insurance companies without visiting an office or participation of an agent. Also, there is an opportunity to apply online for receiving insurance payments. Accordingly, the requirements for automation and Internet resources of insurance companies, protection of personal data and cybersecurity are supposed. Online insurance will provide geographic accessibility and will reduce the cost of insurance services for the public and business. The insurance and payment procedures will be significantly simplified, which will significantly speed up all business processes", D. Akishev assured.

He also noted that the new law will be able to protect the property interests of Kazakhstani tourists.

"Now tourists can get insurance payments only after they return from abroad and on the basis of a valid court decision. The insecurity of a tourist abroad at the time of the occurrence of the insured event is obvious. There is no exhaustive list of events, upon occurrence of which the tourist has the right to receive insurance payment. Also, the amount of insurance coverage to protect the interests of affected tourists remains inadequate. Because of the high level of unprofitableness of this class of insurance, out of 17 insurance organizations that possessed a license for this type of insurance, 10 of them were handed over. In order to protect Kazakhstani tourists, this draft law provides for the transition to compulsory insurance of property interests of the tourist who travels abroad. Insurance of the departing tourist will be carried out by the tour operator in the field of outbound tourism under one of the compulsory insurance programs, in connection with the country and the number of days of the trip", Akishev said.

The Chairman of the National Bank assured that the programs correspond to international requirements and products and include the basic social risks associated with causing harm to life and health of a tourist: an accident, emergency, emergency care, repatriation.

"Because of the coverage, the cost of insurance will be low - about 340 tenge per day. The insurance cover - from 3.4 to 17 million tenge", D. Akishev added.

He also said that the Single insurance database (SIDB) for insurance contracts will work.

"The SIDB will be a single accounting organization and a database for compulsory insurance policies. The formation of a "reference database", its integration with other databases will ensure the reliability of all data on customers of insurance organizations, bonuses and payments, the validity of actuarial tables and insurance tariffs. Integration with information systems and databases of government agencies and organizations will allow for remote identification of individuals, verification of the conclusion and availability of an effective electronic policy", the Chairman of the National Bank concluded.


Kairat Zhandybayev