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Insurance

Legislation

 

Activities of insurance companies are regulated by the Civil Code and the Laws of the Kyrgyz Republic “On Organization of Insurance in the Kyrgyz Republic”,[1] “On Mandatory Insurance of Employer Civil Liability for Death or Injury of Employee While on Duty”[2], “On Mandatory Insurance of Carrier Civil Liability to Passengers”[3], “On Mandatory Insurance of Civil Liability of Carriers of Hazardous Cargoes”[4], “On Mandatory Insurance of Civil Liability of Entities Operating Hazardous Facilities”[5], “On Peculiarities of Crop Insurance”[6], “On Mandatory Insurance of Civil Liability of Vehicle Owners”[7], “On Mandatory Insurance of Residential Premises against Fire and Natural Disasters”[8] and other normative legal acts.

 

The concept of development of the insurance sector of the Kyrgyz Republic for 2013-2017 was approved on April 15, 2013 by the Government resolution to promote insurance business in the Kyrgyz Republic.

 

Establishment and Licensing

 

Insurance companies may be founded as open or closed joint stock companies with the minimum charter capital being:[9]

 

  • at least 30 million KGS to engage in voluntary insurance and/or re-insurance services, except universal life insurance;
  • at least 100 million KGS  to engage in voluntary or mandatory insurance or  reinsurance services including universal life insurance, and from July 1, 2017 at least 150 million KGS;
  • at least 300 million KGS for operating insurance companies engaged solely in re-insurance;
  • at least 1 million KGS for insurance or reinsurance broker activities.

 

Insurance activity is subject to licensing, and a separate license is required for each type of insurance activity. A license is valid for an unlimited period, unless otherwise provided therein. Insurance (premium or coverage) may be paid  in either national or foreign currency. Where the insurance premium is paid in foreign currency, the insurance coverage may be paid in Kyrgyz soms if so agreed by the parties.

 

An intermediary activity of an insurance agent or broker involving the execution of insurance contracts on behalf of foreign insurance companies in the Kyrgyz Republic is not allowed. That said, the activity of foreign insurance brokers in the Kyrgyz Republic is allowed after the recognition of the respective license issued by the competent authorities of the foreign states in the manner provided by the laws of the Kyrgyz Republic on the licensing of certain types of activities.

 

As of May 2015 , there were 17 insurance, including two reinsurance organizations operating in the Kyrgyz Republic[10] and offering more than 84 types of voluntarily insurance and 5 types of mandatory insurance.

These businesses are mainly concentrated in Bishkek (16 companies) with only 1 company registered  in Jalalabat town[11].

 

The rate of insurance premiums received is growing from year to year, thus triggering the growth of the rate of insurers entering into insurance contracts with insurance companies. Before 2005, it was mainly property and life insurance which predominated; voluntary liability insurance evolved later, with the introduction in 2010 of mandatory civil liability insurance for: employers against liability for death or injury of employees while on duty; carriers of passengers; carriers of hazardous cargoes; entities operating hazardous facilities. In 2015, two more types of mandatory civil liability insurance were introduced: for auto-owners and homeowners against fire and natural disasters. 

Most of insurance premiums account for property, general liability, mandatory civil liability and accumulative insurance.

 

Prospects for Development 

 

Currently, the State Service for Regulation and Supervision of the Financial Market under the Government of the Kyrgyz Republic jointly with the insurance companies and other stakeholders  is considering the need for introducing the new types of mandatory insurance as listed below and ensuring the development of voluntary insurance:

  • Mandatory auto-owner civil liability insurance;
  • Mandatory tour operator and tour agent civil liability insurance;
  • Mandatory notary liability insurance;
  • Mandatory realtor civil liability insurance;
  • Mandatory auditor and audit organization civil liability insurance;
  • Mandatory permanent structure-owner civil liability insurance;
  • Mandatory fire and rescue worker accident insurance;
  • Mandatory rescue worker and emergency responder accident insurance;
  • Mandatory law-enforcement officer life and health insurance.

 

It is also planned to improve insurance regulatory framework, enhance institutional capacity and public awareness and participation, and develop investment potential of insurance companies.

 

[1] The Law of the Kyrgyz Republic “On Organization of Insurance in the Kyrgyz Republic” dated July 23, 1998 (with the latest amendments as of July 15, 2009).

[2] The Law of the Kyrgyz Republic “On Mandatory Insurance of Civil Liability of Employer for Death or Injury of Employee While on Duty” dated August 5, 2008.

[3] The Law of the Kyrgyz Republic “On Mandatory Insurance of Civil Liability of Carrier to Passengers” dated  August 4, 2008.

[4] The Law of the Kyrgyz Republic “On Mandatory Insurance of Civil Liability of Carrier of Hazardous Cargoes” dated August 4, 2008.

[5] The Law of the Kyrgyz Republic “On Mandatory Insurance of Civil Liability of Entities Operating Hazardous Facilities” dated August 15, 2008.

[6] The Law of the Kyrgyz Republic “On Peculiarities of Crop Insurance” dated January 26, 2009 No. 31.

[7] The Law of the Kyrgyz Republic “On Mandatory Insurance of Civil Liability of Vehicle Owners” dated July 24, 2015.

[8] The Law of the Kyrgyz Republic “On Mandatory Insurance of Residential Premises against Fire and Natural Disasters” dated July 31, 2015.

[9] Government Resolution No. 300 dated November 25, 2010.

[11] Report of the State Insurance Market Supervisory Authority of the Kyrgyz Republic for 2011, http://fsa.kg/?id=2806.