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On insurance activities

Updated Unofficial translation

The Law of the Republic of Kazakhstan dated 18 December, 2000 No. 126.

      Unofficial translation

      Note of the ILLI!
      The law provides for changes by the Law of the Republic of Kazakhstan dated 03.07.2019 No. 262-VI (shall be enforced from 01.01.2020).
      Footnote. The words “authorized state body”, “authorized state body”, “authorized state body”, “authorized state body” are replaced with the words “authorized body”, “authorized body”, “authorized body”, “authorized body” in the text by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004).

Chapter 1. General Provisions

Article 1. Legislation of the Republic of Kazakhstan on insurance and insurance activities

      Footnote. Title, as amended by the Law of the Republic of Kazakhstan dated 30.12.2009 No. 234 -IV

      1. The legislation of the Republic of Kazakhstan on insurance and insurance activities is based on the Constitution of the Republic of Kazakhstan and consists of the Civil Code of the Republic of Kazakhstan, this Law and other regulatory legal acts of the Republic of Kazakhstan.

      2. Relations, arising out of insurance and related to the scope of other legislative acts of the Republic of Kazakhstan shall be regulated by these acts, with the exception of the relationship, directly regulated by this Law. 3. If an international treaty, ratified by the Republic of Kazakhstan establishes the rules other than those contained in this Law, the rules of the international treaty shall be applied.

      2-1. This Law does not govern the relations connected with compulsory social medical insurance.

      Footnote. Article 1, as amended by the Laws of the Republic of Kazakhstan dated 20.02.2006 No. 128 (the order of enforcement see Article 2), dated 30.12.2009 No. 234 –IV; dated 16.11.2015 No. 406-V (shall be enforced dated 01.01.2016).

Article 2. Relations, regulated by this Law

      1. This Law shall define the basic provisions for the implementation of insurance as a form of entrepreneurial activity, peculiarities of the creation, licensing, regulation, termination of the activities of insurance (reinsurance) companies, insurance brokers, the activity conditions in the insurance market of other individuals and legal entities, the tasks of state regulation of the insurance market and the principles of control and supervision of the insurance activities.

      2. The regulatory legal acts of the National Bank of the Republic of Kazakhstan (hereinafter - the authorized body), taken in accordance with this Law, are regulatory for all participants in the insurance market.

      3. For insurance (reinsurance) organizations, insurance brokers and other legal entities, carrying out activities within the framework of special regime of regulation, introduced in accordance with the Law of the Republic of Kazakhstan "On the National Bank of the Republic of Kazakhstan", the norms of this Law and regulatory legal acts of the authorized body, adopted in accordance with this Law shall be spread within the limits provided by the terms of special regime of regulation.

      Note of the RCLI!
      Article 2 is provided to supplement with paragraph 4 in accordance with the Law of the Republic of Kazakhstan dated 24.11.2015 No. 422-V (shall be enforced from 16.12.2020).
      Footnote. Article 2 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30 -V (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced upon expiry of ten calendar days from the date of its first official publication).

Article 3. The basic concepts, used in this Law

      The following concepts shall be used in this Law:

      1) an adjuster - an employee of the insurance (reinsurance) company, whose functions include the consideration of the application for insurance payment and the damage assessment of the insured event;

      1-1) an actuary – an individual, who has passed exams on the minimum mandatory training program of actuaries established by the regulatory legal act of the authorized body;

      1-2) an association of actuaries – a self-regulatory organization based on voluntary membership of actuaries, created for ensuring protection of interests of its members, creating conditions for professional activity and performing other functions;

      1-3) an underwriter - an employee of the insurance (reinsurance) company, whose functions include the assessment of insurance risks, assumed by insurance and the definition of conditions of insurance (reinsurance) contracts;

      2) assistance - a provision of assistance by insurance companies, legal entities to the policyholder (the insured, the beneficiary), who got in trouble during his (her) travels or his (her) location away from the residence, in the form of money and (or) natural-material form through technical, medical assistance as a result of the insured event;

      3) control - the ability to determine the solutions of the legal entity that occurs when one of the following conditions is happened:

      direct or indirect ownership by one person alone or together with one or more persons over fifty percent of the shares in the authorized capital or allotted (net of preferred and bought back by the public shares) shares of the legal entity or the existence of the possibility of their own to vote more than fifty percent of shares of the legal entity;

      having the ability of one person to elect independently at least half of the governing body or the executive body of the legal entity;

      inclusion of financial statements of a legal entity, with the exception of the financial statements of the special finance company, incorporated under the legislation of the Republic of Kazakhstan on project financing and securitization in the financial statements of another entity, in accordance with the auditor’s report;

      having the ability of one person independently or together with one or more other persons determine the decisions of a legal entity by treaty (supporting documents) or otherwise in the cases, provided by the regulatory legal act of the authorized body;

      4) a parental organization is the legal entity that has control over the other legal entity;

      5) a subsidiary is a legal entity, in relation to which another legal entity has control;

      6) indirect ownership of partnership shares in the authorized capital or ownership (voting) of shares of a legal entity is the ability to influence to the decisions of a legal entity, a major participant of the legal entity or the persons, who are together the major participant in the legal entity through the ownership (voting) of shares (shares in the authorized capital) of other legal entities;

      7) a major participant of a legal entity - an individual or a legal entity that owns, directly or indirectly, ten or more percent of shares in the authorized capital or voting (excluding the preferred shares) shares of the legal entity (except in cases, where such owner is a state or a national holding company);

      7-1) the Islamic insurance (reinsurance) organization is the insurance (reinsurance) organization performing an Islamic insurance activity taking into account the features established by the legislation of the Republic of Kazakhstan on insurance and an insurance activity on the basis of the corresponding license of authorized body;

      8) a significant part in the capital - the ownership, directly or indirectly, independently or jointly with one or more persons of twenty or more percent of voting (less the preferred shares) shares (shares in the authorized capital) or the presence of possible vote by twenty or more percent of the shares;

      9) a reinsurance is the activities and related to it relations, arising in connection with the transfer of all or part of the insurance risks in reinsurance by the reinsured, on the one hand, and the acceptance of these risks by the reinsurance company, on the other hand, in accordance with the reinsurance contract, concluded between them;

      10) a reinsurance company (a reinsurer) - a legal entity, carrying out the activities on the conclusion and execution of reinsurance contracts on the basis of a license of the authorized body;

      11) a reinsured (cedant) - the insurance or reinsurance company, carrying out the transfer of insurance risks it has taken to reinsurance;

      12) the faultless goodwill is availability of the facts confirming professionalism, conscientiousness, lack of not removed or unspent conviction, including lack of the judgment which took legal effect about application of criminal penalty in the form of deprivation of the right to hold leading employee position of financial institution, bank and (or) insurance holding and to be a large participant (major shareholder) of financial institution for life;

      13) co-insurance (joint reinsurance) – activity and the relations related to it, arising in connection with acceptance of insurance risks under the co-insurance (joint reinsurance) contract by several insurance (reinsurance) organizations simultaneously with distribution of their responsibility in accordance with the contract on joint activity concluded between them;

      13-1) co-insurance (joint reinsurance) contract – an insurance (reinsurance) contract, concluded between the participants of insurance (reinsurance) pool and the insurant (assignor) within the framework of the contract on joint activity of participants of insurance (reinsurance) pool;

      14) net retention - a part of the responsibility, in which the insurer or reinsured (cedant) shall be responsible for its own account in accordance with the contract of insurance or reinsurance;

      15) prudential standards - the standards, established by the authorized body and mandatory to comply with by the insurance (reinsurance) companies;

      16) an insurance agent is an individual or legal entity, included in the register of insurance agents and operating as agents for conclusion of insurance contracts on behalf of and by the order of one or more insurance companies on the basis of the contract of agency;

      17) an insurance broker – a legal entity, representing the insurant in relations related to conclusion and execution of insurance contracts with the insurer on behalf of the insurant, or carrying out on its own behalf mediatory activities for conclusion of insurance contracts on behalf of the insurant and (or) reinsurance contracts on behalf of the reinsurer (assignor);

      18) rules of insurance - the document of an insurance company that defines the conditions of the insurance for a particular type of insurance;

      18-1) an insurance report - a form of full or partial release of information, contained in the database;

      18-2) a single database of insurance (hereinafter - the database) - a set of information (including in electronic form) about the insurer, the policyholder, the insured person and the beneficiary;

      18-3) a subordinated debt of the insurance (reinsurance) organization is the unsecured obligation of the insurance (reinsurance) organization under the issued bonds or the obtained loan corresponding to conditions, the stipulated in Clause 25-1 this Law;

      18-4) an insurance (reinsurance) pool – an association of insurance (reinsurance) companies, jointly carrying out insurance activities for certain classes (types) of insurance or certain insurance risks on the basis of a joint venture contract, concluded for a certain period between its participants;

      19) subjects of insurance activities - the insurance and reinsurance companies;

      20) professional participants of the insurance market - the insurance (reinsurance) company, insurance broker, actuary, which operate its activity on the basis of the appropriate license of the authorized body;

      21) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication);

      22) an insurance portfolio - a set of insurance (reinsurance) contracts, as well as insurance premiums (insurance contributions) taken by them;

      23) insurance reserves - the obligations of the insurance (reinsurance) company under the insurance (reinsurance) contracts, estimated on the basis of actuarial calculations;

      23-1) an insurance risk - the probability of occurrence of the insured event;

      23-2) insurance group is group of the legal entities which are not banking conglomerate the insurance holding and (or) its affiliated organizations and (or) the insurance (reinsurance) organization consisting of insurance holding (in the presence) and the insurance (reinsurance) organization and also the affiliated organizations of insurance holding and (or) the affiliated organizations of the insurance (reinsurance) organization and (or) the organizations, in which have considerable equity participation.

      The national managing holding, insurance nonresident holding of the Republic of Kazakhstan and also the affiliated organizations and the organizations in which the insurance nonresident holding of the Republic of Kazakhstan has considerable equity participation, being nonresidents of the Republic of Kazakhstan are not a part of insurance group;

      24) an insurance company - a legal entity, carrying out the activities on the conclusion and execution of insurance contracts on the basis of a license of the appropriate authorized body;

      25) indirect ownership (voting) of shares of the insurance (reinsurance) company - the ability to influence to the decisions of the insurance (reinsurance) company, a major participant of the insurance (reinsurance) company, an insurance holding company or persons, that are together, a major participant in the insurance (reinsurance) company, an insurance holding company, through the ownership of shares (shares in the authorized capital) of legal entities;

      25-1) association of insurance (reinsurance) companies, insurance brokers - a non-commercial organization, established in the form of association (union) to protect the interests of its members and the coordination of their professional activities;

      26) a major participant of insurance (reinsurance) company - an individual or a legal entity (except in cases, where such holder is a state or a national holding company, as well as otherwise provided by this Law), which is in accordance with the written consent of the authorized body may own, directly or indirectly, ten or more percent of outstanding (net of preferred shares and bought shares of the insurance (reinsurance) company) shares of the insurance (reinsurance) company or shall be able to:

      vote, directly or indirectly, by ten or more percent of voting (net of preferred) shares of the insurance (reinsurance) company;

      influence to the decisions of the insurance (reinsurance) company under the contract or otherwise in the manner, specified by the regulatory legal acts of the authorized body;

      26-1) an insurance holding company - a legal entity (except in cases, where such holder is a state or a national holding company, as well as otherwise provided by this Law), which is in accordance with the written consent of the authorized body may own, directly or indirectly, twenty-five or more percent of outstanding (net of preferred shares and bought shares of the insurance (reinsurance) company) shares of the insurance (reinsurance) company or shall be able to:

      vote, directly or indirectly, by twenty-five or more percent of the voting shares of the insurance ( reinsurance) organization;

      determine the decisions, made by the insurance (reinsurance) company, under the contract or otherwise, or have control;

      27) redemption amount - the amount of money that the policyholder is entitled to receive upon early termination of the endowment insurance contract;

      28) a surveyor is an employee of the insurance (reinsurance) company or a legal entity, providing services to the insurance (reinsurance) company in accordance with the paid services contract, whose functions include the preliminary inspection and assessment of the object of insurance, taken to the insurance;

      29) an independent actuary – an individual, complying with the requirements of this Law and attracted for conducting assessment of the actuary's calculations;

      29-1) affiliated entities - individuals or legal entities (with the exception of state bodies, exercising the control and supervisory functions under the authority, granted to them and the national holding company), and having the ability to directly (or) indirectly determine and (or) influence to the decisions, made by each other (one of the persons), including by virtue of the concluded contract. The presence of national holding company in the shareholders of the insurance (reinsurance) company is not a basis for determining as affiliated with respect to each other;

      30) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).
      Footnote. Article 3 is in the wording of the Law of the Republic of Kazakhstan dated 30.12.2009 No. 234-IV, as amended by the Laws of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), dated 05.07.2011 No. 452-IV (shall be enforced from 13.10.2011), dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication), dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 21.06.2013 No. 106-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication); dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 4. Insurance and insurance activities

      1. Insurance represents a complex of the relations on protection of legitimate valuable interests of physical person or legal entity at a loss occurrence or other event defined by the insurance contract by means of the insurance payment performed by insurance company.

      2. Insurance activities - the activities of insurance (reinsurance) company, related to the conclusion and execution of insurance (reinsurance) contracts, carried out under the license of the authorized body in accordance with the legislation of the Republic of Kazakhstan, as well as the activities of mutual insurance associations, related to the conclusion and execution of insurance contracts, carried without the license in accordance with the legislation of the Republic of Kazakhstan on mutual insurance.

      3. An Islamic insurance activity is the activity of the Islamic insurance (reinsurance) organization connected with the conclusion and performance of agreements of Islamic insurance (reinsurance), performed on the basis of the license of authorized body according to requirements of the legislation of the Republic of Kazakhstan.

      Footnote. Article 4, as amended by the Laws of the Republic of Kazakhstan dated 20.02.2006 No. 128 (the order of enforcement see Art. 2), dated 05.07.2006 No. 164 (the order of enforcement see Art. 2), dated 30.12.2009 No. 234 – IV; dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication).

Article 5. Insurance of foreign individuals and legal entities and stateless persons

      1. Foreign citizens, stateless persons, foreign legal entities, including those, who are carrying out their activities in the territory of the Republic of Kazakhstan, are entitled to insurance coverage as citizens and legal entities of the Republic of Kazakhstan.

      2. (Is excluded – dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2).

Article 5-1. Insurance by insurance companies - non-residents of the Republic of Kazakhstan

      Note of the RCLI!
      Paragraph 1 is provided in the wording of the Law of the Republic of Kazakhstan dated 24.11.2015 No. 422-V (shall be enforced from 16.12.2020).

      1. Insurance of the property interests of the legal entity or its separate divisions, located in the territory of the Republic of Kazakhstan and the property interests of an individual, who is the resident of the Republic of Kazakhstan, may be carried out only by an insurance company - resident of the Republic of Kazakhstan.

      2. Conclusion and execution of insurance contracts with insurance companies – non-residents of the Republic of Kazakhstan shall be allowed in the following cases:

      1) by individuals – residents of the Republic of Kazakhstan, temporarily located outside the Republic of Kazakhstan for the purpose of work, study, treatment or rest, only for the period of temporary stay of these persons outside the Republic of Kazakhstan;

      2) by residents of the Republic of Kazakhstan in terms of risks, associated with maritime transport services (except for the ships, providing cabotage services), commercial aviation, launch services and freight of space flights (including satellites), and services related to them (transportation of goods, insurance of vehicles, carrying goods, and any liability arising therefrom).

      3. Second-tier banks of the Republic of Kazakhstan and organizations, carrying out certain types of banking operations, shall be prohibited to make payments and money transfers, except for the cases provided for in paragraph 2 of this Article, related to the payment of insurance premiums (contributions) in favor of non-residents of the Republic of Kazakhstan from individuals and legal entities-residents of the Republic of Kazakhstan.

      Note of the RCLI!
      Article 5-1 is provided to supplement with paragraph 4 in accordance with the Law of the Republic of Kazakhstan dated 24.11.2015 No. 422-V (shall be enforced from 16.12.2020).
      Footnote. Chapter 1 is supplemented by Article 5-1 in accordance with the Law of the Republic of Kazakhstan dated 20.02.2006 No. 128 (the order of enforcement see Art. 2), in the wording of the Law of the Republic of Kazakhstan dated 15.07.2010 No.338-IV (the order of enforcement see Art. 2); as amended by the Laws of the Republic of Kazakhstan dated 02.07.2018 No. 166-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 No. 168-VI (shall be enforced from 16.12.2018); dated 02.04.2019 No. 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 2. The organization of insurance activities

Article 6. Sectors, classes and types of insurance

      1. For the organization and implementation of the state regulation and licensing of insurance activities, the insurance coverage is divided into sectors, classes and types. Insurance activities of the insurance company are carried out by sectors “life insurance” and “general insurance”.

      2. The sector of “life insurance” includes the following classes in the voluntary form of insurance:

      1) a life insurance;

      2) an annuity insurance;

      3 ) is excluded by the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2);
      4) is excluded by the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2).

      3. The sector “general insurance” includes the following classes in the voluntary form of insurance:

      1) an accident insurance;

      2) a health insurance;

      3) a motor vehicle insurance;

      4) an insurance of railway transport;

      5) an air transport insurance;

      6) a water transport insurance;

      6-1) insurance of space objects;

      7) a cargo insurance;

      8) an insurance against property damage, except for the classes specified in subparagraphs 3) - 7) of this paragraph;

      9) an insurance of civil liability of motor vehicle owners;

      10) an insurance of civil liability of owners of air transport;

      11) an insurance of civil liability of owners of water transport;

      11-1) insurance of civil liability of space objects owners;

      11-2) insurance of professional liability;

      12) insurance of civil liability, except for the classes, specified in subparagraphs 9), 10), 11), 11-1) and 11-2) of this paragraph;

      13) a loan insurance;

      14) a mortgage insurance;

      15) a guarantees and warranties insurance;

      15-1) an insurance of losses of financial institutions, with the exception of the classes specified in paragraphs 13), 14), 15) and 16) of this paragraph;

      16) an insurance against other financial losses;

      17) a legal expenses insurance;

      18) a title insurance.

      4. Additional requirements under the terms of a separate class (type) of insurance, including prudential standards within the framework of certain classes (types) of insurance, shall be established by regulatory legal acts of the authorized body.

      5. Type of insurance - an insurance product, developed and provided by insurance company to the policyholder within one or more classes of insurance by conclusion of the insurance contract.

      6. Each type of compulsory insurance, contents and conditions of which are determined by the legislation of the Republic of Kazakhstan, regulating compulsory type of insurance is a separate class of insurance.

      7. Imputed insurance is a type of obligatory insurance, in which the requirement of obligatory insurance, types and minimum terms of insurance (including the object of insurance, insurance risks and minimum amounts of insurance sums) shall be established by legislative acts of the Republic of Kazakhstan, and other terms and procedure of insurance shall be determined by agreement of the parties.

      Imputed insurance shall be carried out within one or several classes of insurance specified in paragraph 3 of Article 6 of this Law, and is not a separate class of insurance.

      Footnote. Article 6, as amended by the Laws of the Republic of Kazakhstan dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004), dated 20.02.2006 No. 128 (the order of enforcement see Art. 2), dated 07.05.2007 No. 244, dated 30.12.2009 No. 234-IV; dated 15.07.2010 No. 338 -IV (the order of enforcement see Art. 2); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 7. The content of the classes of insurance

      1. A life insurance - a combination of types of insurance, providing for an insurance payment in case of death of the insured person or his (her) survival until the end of the insurance period or for an age, specified in the insurance contract.

      2. An annuity insurance - a combination of types of endowment insurance, providing for the implementation of periodic insurance payments in the form of a pension or annuity within the period, established in the contract or for life in the event of reaching of the insured person a certain age, disablement (in age, due to disability, due to illness), death of a breadwinner, unemployment or other cases, lead to a decrease or loss of personal income of the insured person. The condition of the implementation of the periodic payments under the annuity insurance contracts is not related to the definition, refinement and confirmation of the amount of insurance payments.

      2-1. Is excluded by the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2).
      2-2. Is excluded by the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2).

      3. An accident insurance - a combination of types of insurance, providing for an insurance payment in a fixed amount and (or) in the amount of partial or full compensation of expenses of the insured person in case of death, loss (total or partial) disability (general or vocational) or any other damage to health of the insured person as a result of an accident, occupational disease, except for the insurance risks specified in subparagraph 2) of paragraph 3 of Article 6 of this Law.

      By accident is understood a sudden, short-term event (accident), which occurred against the will of a person as a result of external mechanical, electrical, chemical, or thermal effects on the insured person, which led to a personal injury, bodily injury or a death.

      4. A health insurance - a combination of types of insurance, providing for an insurance payment in a fixed amount and (or) in the amount of partial or full compensation of expenses of the insured person in connection with disease and other health disorders, with the exception of the classes of insurance specified in subparagraph 1) of paragraph 3 article 6 of this Law.

      5. An insurance of means of transport, specified in subparagraphs 3) - 6) of paragraph 3 of Article 6 of this Law, is a combination of types of insurance, providing for insurance payments in the amount of partial or full compensation for the damage, caused to property interests of a person, connected with the possession, use and disposal of means of transport, including hijacking or theft, as well as due to its damage or destruction.

      5-1. Insurance of space objects is a combination of types of insurance, providing insurance payments in the amount of partial or full compensation for the damage caused to the property interests of a person associated with possession, use, disposal of a space object, as a result of its damage or destruction.

      6. A cargo insurance - a combination of types of insurance, providing for insurance payments in the amount of partial or full compensation for the damage, caused to the property interests of a person, connected with the possession, use and disposal of cargo, including luggage, goods, and all other types of products as a result of their injuries, destruction, loss, regardless of the mode of transportation.

      7. A property insurance - a combination of types of insurance, providing for insurance payments in the amount of partial or full compensation for the damage, caused to the property interests of a person, connected with the possession, use and disposal of property as a result of damage or destruction, theft, with the exception of the property listed in subparagraphs 3) - 7) of paragraph 3 of Article 6 of this Law.

      8. Insurance of civil liability of owners of means of transport provided by subparagraphs 9), 10) and 11) of paragraph 3 of Article 6 of this Law represents a combination of types of insurance, providing for insurance payments to the third parties in the amount of partial or full compensation for the damage, caused by the person obliged to compensate it due to the use of vehicle by him (her), including civil liability of the carrier.

      8-1. Insurance of civil liability of owners of space objects represents a combination of types of insurance, providing for insurance payments to the third parties in the amount of partial or full compensation for the damage, caused by the person obliged to compensate it in connection with the use of the space object by him (her).

      8-2. Insurance of professional liability is a type of civil liability insurance, providing for insurance payments in the amount of partial or full compensation for the damage, caused to the third parties due to erroneous actions (inaction) and (or) omissions in the process or as a result of professional activities carried out on the basis of a special permit (license, notification) and (or) requiring special knowledge, experience and (or) qualification.

      9. Civil liability insurance is a combination of types of insurance, providing for insurance payments to the third parties in the amount of partial or full compensation for the damage, caused by the insurant, obliged to compensate it, as a result of insurance of all risks, except as specified in subparagraphs 9), 10), 11), 11-1) and 11-2) of paragraph 3 of Article 6 of this Law.

      10. A loan insurance - a combination of types of insurance, providing for insurance payments in the event of loss of the lender as a result of non-fulfillment by the insurer (the borrower) the obligations to the lender.

      11. Mortgage insurance is a type of insurance that provides for insurance payments in the amount of partial or full compensation for the damage caused to the property interests of the lender as a result of the borrower's failure to fulfill obligations under the contract of mortgage housing loan, after the sale of collateral for mortgage housing loan.

      12.A guarantees and warranties insurance - a combination of types of insurance, providing for insurance payments in the amount of partial or full compensation of the damage, caused to the property interests of the person, issued the guarantee or warranty, as a result of his (her) obligation to perform the issued warranty or guarantee.

      13. An insurance against other financial losses - a combination of types of insurance, providing for insurance payments in the event of loss due to loss of job, loss of income, adverse natural phenomena, continuous, unexpected expenses, loss of market value and other damages as a result of the financial and economic activity, except for insurance of the risks, specified in subparagraphs 12) - 15) of paragraph 3 of Article 6 of this Law.

      14. A legal expenses insurance - a combination of types of insurance, providing for insurance payments for losses of the policyholder (the insured person) as a result of their expenses, incurred in connection with court trial.

      15. Under the insurance risks contracts, specified in paragraphs 11 - 13 of this article, the risk of the policyholder and only in his (her) favor, can be insured.

      16. An insurance of losses of financial institutions- a combination of types of insurance, providing for the implementation of the insurance payment in the amount of partial or full compensation for losses, as a result of providing the financial services by the financial institution, with the exception of the classes specified in subparagraphs 13), 14), 15) and 16) of paragraph 3 Article 6 of this Law.

      17. A title insurance - a combination of types of insurance, providing for an insurance payment in the amount of partial or full compensation for the damage, caused to the property interests of the policyholder in the event of termination of the right to the property.

      Footnote. Article 7, as amended by the Laws of the Republic of Kazakhstan dated 20.02.2006 No. 128 (the order of enforcement see Art. 2), dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2); dated 02.07.2018 № 166-VI (see Article 2).

Article 8. The combination of sectors and classes of insurance

      1. The activities of the insurance company in the Republic of Kazakhstan are carried out on the basis of a license for the sector “life insurance” or a license for the sector “general insurance” within the respective classes of insurance, specified in the license.

      2. The activity in the sector “general insurance” may not be:

      1) combined with the activities in the sector “life insurance”;

      2) carried out in the form of endowment insurance.

      3. Activity in the industry “life insurance” cannot be combined with:

      1) activity in the industry “general insurance”, except for the classes of insurance specified in subparagraphs 1) and 2) of point 3 of article 6 of this Law;

      2) obligatory types of insurance, except for obligatory insurance of the employee from accidents upon performance of labor (office) duties and obligatory insurance of the tourist.

      4. The insurance company may develop a type of insurance that combines the features and contents of two or more classes of insurance, provided that it has a license with the indication of corresponding classes of insurance and subject to the restrictions on combining the classes of insurance, specified by this Law.

      5. (Paragraph is excluded by the Law of the Republic of Kazakhstan dated July 10, 2003 No. 483 (shall be enforced from January 1, 2004).

      Footnote. Article 8, as amended by the Law of the Republic of Kazakhstan dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2); dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication); date 02.04.2019 № 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 9 Reinsurance activities

      1. Reinsurance activities on the territory of the Republic of Kazakhstan shall be subject to licensing in the manner prescribed by this Law.

      2. The insurance company shall transfer insurance risks to reinsurance without a reinsurance license.

      3. The insurance company shall have the right to accept insurance risks for reinsurance only if there is a reinsurance license.

      4. The insurance company, having the license in the sector "general insurance" shall have the right to obtain a license and carry out activities on reinsurance in all classes of insurance, specified in its license in the sector "general insurance", with the exception of the class of obligatory insurance of the employee from accidents during performance of labor (office) duties.

      5. The insurance company, having a license in the sector "life insurance", shall have the right to obtain a license and carry out reinsurance activities for all classes of insurance, specified in its license in the sector "life insurance", taking into account the combination of classes, provided for in paragraph 3 of Article 8 of this Law.

      6. The requirements, established by paragraphs 4 and 5 of this Article shall not apply to reinsurance contracts, concluded with insurance (reinsurance) companies-non-residents of the Republic of Kazakhstan.

      Reinsurance company, carrying out reinsurance as an exclusive activity on the basis of reinsurance license, shall have the right to carry out reinsurance for all classes of insurance in the sectors "life insurance" and "general insurance".

      7. When transferring the insurance risks to reinsurance by the assignor, the assignor shall be obliged to have confirmation of the reinsurance company in written form about the acceptance of the latter risks for reinsurance (acceptance), indicating all terms of reinsurance.

      8. Insurance (reinsurance) company shall not have the right to transfer insurance risks to reinsurance insurance (reinsurance) companies-non-residents of the Republic of Kazakhstan, included in the register of prohibited insurance (reinsurance) companies-non-residents of the Republic of Kazakhstan.

      The grounds for inclusion in the register of prohibited insurance (reinsurance) companies-non-residents of the Republic of Kazakhstan are:

      1) the fact of non-execution by the insurance (reinsurance) company-non-resident of the Republic of Kazakhstan of requirements of the insurance (reinsurance) company-resident of the Republic of Kazakhstan on implementation of reinsurance payments, satisfied by the court decision (in case of refusal to implement reinsurance payments or not fully implemented);

      2) the fact of non-submission, as well as submission of inaccurate or incomplete information about the amount of risks, premiums and essential terms of the concluded reinsurance contract by the insurance (reinsurance) company-non-resident of the Republic of Kazakhstan to the authorized body.

      The register of prohibited insurance (reinsurance) companies-non-residents of the Republic of Kazakhstan shall be placed on the Internet resource of the authorized body.

      The procedure for maintaining the register of prohibited insurance (reinsurance) companies -non-residents of the Republic of Kazakhstan shall be determined by regulatory legal act of the authorized body.

      Note of the RCLI!
      Paragraph 9 is valid till 16.12.2020 in accordance with the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI.

      9. Insurance (reinsurance) company may transfer insurance risks for reinsurance to reinsurance company-non-resident of the Republic of Kazakhstan through mediation of an insurance broker-non-resident of the Republic of Kazakhstan, provided that the insurance broker-non-resident of the Republic of Kazakhstan has on the territory of the Republic of Kazakhstan a subsidiary, carrying out activity of an insurance broker on the basis of a license of the authorized body. A subsidiary of an insurance broker-non-resident of the Republic of Kazakhstan, carrying out activity of an insurance broker on the basis of a license of the authorized body, shall submit to the authorized body a report on reinsurance contracts concluded by insurance (reinsurance) company through mediation of this insurance broker-non-resident of the Republic of Kazakhstan, in accordance with regulatory legal act of the authorized body.

      10. In case of participation of the insurance broker, carrying out activity on the basis of a license of the authorized body, in the process of transfer of insurance risks to reinsurance through mediation of the insurance broker-non-resident of the Republic of Kazakhstan, the insurance broker, carrying out activity on the basis of the license of the authorized body, shall submit to the authorized body a report on the conditions of placement of these risks by insurance broker-non-resident of the Republic of Kazakhstan for reinsurance to reinsurance companies-non-residents of the Republic of Kazakhstan in accordance with regulatory legal act of the authorized body.

      11. Shall be enforced from 16.12.2020 in accordance with the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI.

      12. The norms of this Law in part of creating, licensing, regulation and termination of activity of the insurance company shall apply to the terms of creating, licensing, regulation and termination of activity of reinsurance companies, carrying out reinsurance as an exclusive type of activity.

      Footnote. Article 9 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 3. The insurance market

Article 10. The participants of the insurance market

      The participants of the insurance market of the Republic of Kazakhstan are:

      1) an insurance (reinsurance) company;

      Note of the RCLI!
      Article 10 is provided to supplement by sub-paragraph 1-1) in accordance with the Law of the Republic of Kazakhstan dated 24.11.2015 No. 422-V (shall be enforced from 16.12.2020).

      2) an insurance broker;

      Note of the RCLI!
      Article 10 is provided to supplement by sub-paragraph 2-1) in accordance with the Law of the Republic of Kazakhstan dated 24.11.2015 No. 422-V (shall be enforced from 16.12.2020).

      3) an insurance agent;

      4) the policyholder, the insured person, the beneficiary;

      5) an actuary;

      6) an independent actuary;

      7) an appraiser;

      8) an underwriter;

      9) an adjuster;

      10) a surveyor;

      11) an insurance ombudsman;

      11-1) organization, guaranteeing implementation of insurance payments to the insurants (insured, beneficiaries) in case of liquidation of insurance companies;

      11-2) organization for formation and maintenance of the database;

      12) an association of insurance (reinsurance) companies and insurance brokers;

      13) an association of actuaries;

      14) other individuals and legal entities, engaged in entrepreneurial activities, related to insurance.

      Footnote. Article 10 is in wording of the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2); as amended by the Laws of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 10.01.2018 No. 134-VI (shall be enforced upon expiry of six months after its first official publication).

Article 10-1. The authority of the association of insurance (reinsurance) companies and insurance brokers

      1. The authority of the association of insurance (reinsurance) companies and insurance brokers shall include:

      1) ensuring interaction of its members in carrying out their activities in the insurance market;

      2) development of internal documents;

      3) training of insurance market participants;

      4) consideration of disputes arising between members;

      5) protection of the interests of its members;

      6) sending to the authorized body of information on possible violations of requirements established by legislative acts of the Republic of Kazakhstan by professional participants of the insurance market;

      7) implementation of other functions provided by the constituent documents.

      2. Associations of insurance (reinsurance) companies and insurance brokers shall be obliged to bring to the attention of their members the information provided by the authorized body on the issues of professional activities of their members.

      Footnote. The Law is supplemented by Article 10-1 in accordance with the Law of the Republic of Kazakhstan dated 15.07.2010 № 338-IV (the order of enforcement see Article 2); is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 № 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 10-2. Internal documents of the association of insurance (reinsurance) companies and insurance brokers

      Associations of insurance (reinsurance) companies and insurance brokers shall accept the following internal documents:

      1) standards of activity in the insurance market;

      2) code of professional ethics;

      3) dispute resolution procedure;

      4) other documents provided by the Charter.

      Internal documents shall be approved by the supreme governing body of the association of insurance (reinsurance) companies and insurance brokers and shall be binding for their members.

      Footnote. The Law is supplemented by Article 10-2 in accordance with the Law of the Republic of Kazakhstan dated 15.07.2010 № 338-IV (the order of enforcement see Article 2); is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 № 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 10-3. Association of actuaries

      1. Association of actuaries shall be created in the form of a non-commercial organization, the activities of which are regulated by this Law, the Law of the Republic of Kazakhstan "On Self-regulation" and other regulatory legal acts of the Republic of Kazakhstan, the constituent documents of the association of actuaries.

      2. The terms and procedure for admission to membership and termination of membership in the association of actuaries shall be established by the Charter of association of actuaries.

      Association of actuaries shall maintain a list of its members and place it on its Internet resource.

      3. Association of actuaries shall perform the following functions:

      1) conducting actuarial research in the field of insurance and insurance activities, including actuarial assessment and examination of insurance tariffs by insurance classes, the content and terms of which are determined by legislative acts of the Republic of Kazakhstan;

      2) conducting analysis and updating of indicators of survival under annuity insurance contracts concluded within the framework of the laws of the Republic of Kazakhstan "On Retirement Insurance in the Republic of Kazakhstan" and "On Compulsory Insurance of Employee against Accidents upon Performance of Labor (Official) Duties by them";

      3) conducting training and examinations on the minimum obligatory training program for actuaries;

      4) development of internal documents;

      5) ensuring interaction of its members in implementation of its activities;

      6) consideration of disputes arising between members;

      7) ensuring protection of interests of its members;

      8) implementation of other functions that do not contradict the requirements of the legislation of the Republic of Kazakhstan on self-regulation and regulatory legal act of the authorized body.


      4. Employees and members of the association of actuaries shall be responsible for disclosure of information obtained in the course of their functions, constituting official, commercial secrets, insurance secrets or other secrets protected by the Law, in accordance with the Laws of the Republic of Kazakhstan.

      5. Development and approval of measures of influence, the procedure and grounds for their application, the procedure for consideration of cases of violation by members of the association of actuaries of the code of professional ethics and standards of professional practice, qualification and other requirements for membership are within the competence of the supreme management body of the association of actuaries.

      Footnote. The Law is supplemented by Article 10-3 in accordance with the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 11. The activities of the insurance (reinsurance) company

      1. Insurance activity is the main type of entrepreneurial activity, carried out by the insurance (reinsurance) company.

      2. The insurance (reinsurance) company, other than insurance activity, shall be entitled to carry out the following activities:

      1) the investing activities subject to the limitations set forth in this Law;

      1-1) activity on management of investment portfolio in respect of assets formed at the expense of part of insurance premiums received from insurers for investment purposes and income (losses) received from their investment, on the basis of a license for carrying out activities on management of investment portfolio in the securities market in the cases and in the manner provided by the legislation of the Republic of Kazakhstan;

      2) the issuance of loans to its policyholders within the redemption amount, provided by the relevant contract of endowment insurance (for an insurance company, operating in the sector “life insurance”);

      3) the sale of specialized software, used to automate the activities of the insurance (reinsurance) companies;

      4) the sale of specialized literature on insurance and insurance activities on all types of media;

      5) the sale or lease of property, acquired for their own use (for insurance (reinsurance) companies) or received at its disposal in connection with the conclusion of insurance contracts (for an insurance company);

      6) the advising on the issues, related to the insurance activities;

      7) the organization and conduct the training to enhance the skills of experts in the field of insurance (reinsurance);

      8) the insurance mediation as an insurance agent;

      9) the activity, specified in paragraph 1 of Article 52 of this Law;

      10) is excluded by the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2);

      11) the assistance, carried out on the basis of a joint operation agreement between the insurance companies or between insurance companies and other legal entities that provide the assistance services;

      12) the activity, provided by the legislative acts of the Republic of Kazakhstan, in the framework of participation in the system of guaranteeing insurance payments.

      3. An insurance (reinsurance) company is prohibited from carrying out transactions and operations as an entrepreneurial activity, not covered by paragraphs 1 and 2 of this Article.

      3-1. An insurance company shall not be entitled to carry out obligatory insurance, the types, terms and procedure of which are determined by separate legislative acts of the Republic of Kazakhstan regulating obligatory types of insurance, in the absence of a major participant– an individual or an insurance holding company.

      The requirement of part one of this point does not extend to insurance companies which more than fifty percent of placed shares directly or indirectly belong or are delivered in trust management to the state or national managing holding.

      4. The insurance companies have the right to create an organization that guarantees the insurance payments to the policyholders (the insured persons, beneficiaries) in the case of compulsory liquidation of insurance companies. The order of establishment and activities of the organization, guaranteeing the insurance payments to the policyholders (the insured persons, beneficiaries) in the case of liquidation of insurance companies, are regulated by the legislation of the Republic of Kazakhstan.

      Obligatory participation of insurance companies in the organization that guarantees implementation of insurance payments to insurers (insured, beneficiaries) in the case of compulsory liquidation of insurance companies shall be provided for by this Law and separate legislative acts of the Republic of Kazakhstan regulating obligatory types of insurance.

      Footnote. Article 11, as amended by the Laws of the Republic of Kazakhstan dated 11.06.2003 No. 436, dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004), dated 20.02.2006 No. 128 (the order of enforcement see Art. 2), dated 30.12.2009 No. 234-IV; dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of itsfirst official publication); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 11-1. General conditions of carrying out the insurance activities

      1. The insurance (reinsurance) company may carry out the insurance activities only with a license to engage in the insurance activities (reinsurance activity), the insurance rules that determine the general conditions of the insurance activities for a particular type, and the internal rules.

      1-1. Excluded by the Law of the Republic of Kazakhstan dared 29.03.2016 No. 479-V (shall be enforced after twenty one calendar days after day of its first official publication).

      1-2. The insurance company within thirty calendar days from the date of receipt of a license for the right to carry out insurance activities shall be obliged to join the board of representatives of the insurance Ombudsman.

      2. The internal rules of the insurance (reinsurance) companies shall determine:

      1) the structure, objectives, functions and powers of the departments of insurance (reinsurance) company;

      2) the structure, membership, objectives, functions and powers of the internal audit service and other standing bodies;

      3) the risk management system, revealing a policy of insurance (reinsurance) company on managing the technical (insurance), investment, credit, operational, market and other risks;

      4) the rights and duties of heads of departments;

      5) the powers of the officials and employees of the insurance (reinsurance) company in carrying out transactions on its behalf and for its expenses;

      6) the procedure for registration of written and oral complaints of policyholders (insured persons), victims (beneficiaries) and their representatives, as well as incoming applications and documents on the issues of insurance events;

      7) the procedure and terms of consideration and responses to policyholders (the insured persons), victims (beneficiaries) and their representatives on the applications and documents on the issues of insurance events;

      8) the procedure for deciding on the insurance payment with a timetable for its implementation or presentation of a reasoned justification of the reasons for refusal of the insurance compensation;

      9) the procedure for assessment of insurance risks (including the property received in insurance) and the amount of damage on the insured event;

      10) the powers of an underwriter, an adjuster and a surveyor.

      3. Insurance rules and internal rules of the insurance (reinsurance) company shall be approved by the board of directors.

      The insurance company shall be obliged to place the rules of insurance for the types of insurance, which provides for the possibility of concluding an insurance contract in electronic form, on the Internet resource of the insurer.

      In case of conclusion of voluntary insurance contracts in electronic form using the Internet resources of other organizations that are partners of the insurance company on the basis of the relevant agreement, the insurance company shall be obliged to ensure the placement of insurance rules on their Internet resources.

      3-1. Rules of insurance and internal regulations of the Islamic insurance (reinsurance) organization approve by Board of Directors in the presence of the positive conclusion of council for the principles of Islamic financing.

      4. The insurance (reinsurance) company shall not be entitled to carry out insurance activities without the presence in its staff of an actuary, having a license for carrying out actuarial activities in the insurance market.

      An actuary, having a license for carrying out actuarial activities in the insurance market shall not be entitled to combine his/her activities in other insurance (reinsurance) companies, except for the cases of involvement as an independent actuary.

      5. The insurance (reinsurance) company engages an independent actuary to check the activity of actuary, established by this Law, who consists in the staff of the insurance (reinsurance) company, in the manner and terms, established by the regulatory legal acts of the authorized body.

      This paragraph shall not be applied to the insurance (reinsurance) company in the case of hiring an independent actuary by an audit firm during the mandatory audit.

      6. An independent actuary must comply the following requirements:

      1) not to be an employee of the audited insurance (reinsurance) company;

      2) to have experience in actuarial activity for at least three years and at least two years in the insurance industry in which the audited insurance (reinsurance) company carries out its activity, and to be a member of the association of actuaries;

      3) to have a license of the authorized body for actuarial activity or to be a member of international associations of actuaries, the list and requirements to which shall be established by the authorized body, in the case provided for in paragraph 5 of this Article.

      7. An independent actuary shall be responsible for the disclosure of the information, obtained during the audit of the activities of the actuary, who consists in the staff of the insurance (reinsurance) company, in accordance with the Laws of the Republic of Kazakhstan.

      8. The requirements for the implementation of the insurance activities by the insurance company, including the relationship with the participants of the insurance market, are established by the regulatory legal act of the authorized body.

      Footnote. Section is supplemented by Article 11-1, in accordance with the Law of the Republic of Kazakhstan dated 20.02.2006 No. 128 (the order of enforcement see Art. 2), is in the wording of the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2); with the changes made by laws of the Republic of Kazakhstan dated 16.05.2014 No. 203-V (shall be enforced after six months after day of its first official publication); dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication); dared 29.03.2016 No. 479-V (shall be enforced after twenty one calendar days after day of its first official publication); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 12. Features of carrying out activities for life insurance

      1. The insurance company performing activities for accumulative insurance except for the Islamic insurance company having the right to grant within the redemption amount loans to the insurers taking into account requirements of regulatory legal acts of authorized body.

      2. The insurance company may increase the size of regular insurance payments during the term of the annuity insurance contract on the advice of the actuary, in the manner set forth in the regulatory legal acts of the authorized body.

      3. Excluded by the Law of the Republic of Kazakhstan dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication).

      4. The insurance company may develop types of insurance within the classes of insurance, specified in paragraph 2 of Article 6 of this Law, providing for an insurance payment in case of participation of the policyholder in the investments and profits of the insurer.

      5. The procedure and peculiarities of the insurant's participation in the insurer's investments or profits, as well as the requirements for the content of the insurance contract providing for the term of the insurant's participation in the insurer's investments or profits, shall be established by the regulatory legal act of the authorized body.

      When concluding an insurance contract providing for the term of participation of the insurant in investments, the insurance company shall have the right to manage the assets formed at the expense of a part of insurance premiums received from the insurers for investment purposes and incomes (losses) received from their investment independently if the insurance company has a license for carrying out activities to manage the investment portfolio in the securities market or transfer them to the investment management of the investment portfolio, which is not an insurance company.

      The terms and procedure for the transfer by the insurance company of assets formed at the expense of a part of insurance premiums received from the insurants for investment purposes and incomes (losses) received from their investment to the investment management of the investment portfolio, which is not an insurance company, shall be determined by the regulatory legal act of the authorized body.

      Insurance companies that conclude insurance contracts providing for the term of participation of the insurant in investments shall maintain accounting records and submit financial statements and primary statistical data separately for their own funds and assets formed at the expense of a part of insurance premiums received from the insurants for investment purposes and incomes (loss) received from their investment to the authorized body in the manner established by the legislation of the Republic of Kazakhstan.

      Accrual of payment in connection with participation of the insurant in the insurer's profit shall be made by the results of the completed financial year.

      6. Implementation of payments in connection with the participation of the policyholder in the investments or profits of the insurer with the accumulated amount is made in the following cases:

      1) the occurrence of the insured event as part of an insurance payment;

      2) the expiration of the term of the endowment insurance as part of an insurance payment;

      3) the early termination of the insurance contract as part of the redemption amount.

      Conclusion of an insurance contract, providing for a condition of participation of the policyholder in the profits of the insurer, with the shareholders (a single shareholder) and (or) the affiliated persons of the insurance company is not allowed.

      Footnote. Article 12 is in the wording of the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2); with the changes made by the Law of the Republic of Kazakhstan dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 13. Activities for co-insurance and joint reinsurance

      1. In implementation of insurance (reinsurance) risks through creation of an insurance (reinsurance) pool, the contract of co-insurance (reinsurance) may be concluded on the terms of the insurance (reinsurance) company, taking over the functions and powers of the leading insurance (reinsurance) company.

      2. The contract on joint activity with participation of the insurance (reinsurance) company shall contain the following information:

      1) the name of the insurance (reinsurance) company, being the leading one in the activity of the insurance (reinsurance) pool;

      2) classes (types) of insurance and the list of insurance risks being the subject of activity of the insurance (reinsurance) pool;

      3) the maximum amount of total liabilities of the insurance (reinsurance) pool and its participants, including the maximum amount of liabilities under a separate co-insurance contract (joint reinsurance), the maximum share of responsibility of each participant of the pool for the taken risks;

      4) terms, procedure of conclusion and execution of insurance contracts (joint reinsurance);

      5) validity term of the contract;

      6) rights and obligations of the parties;

      7) disputes resolution procedure;

      8) signatures of the parties.

      The insurance (reinsurance) company within ten calendar days from the date of conclusion of the contract on joint activity with participation of the insurance (reinsurance) company shall notify the authorized body of its conclusion with attachment of a copy of this contract.

      3. The co-insurance (joint reinsurance) contract must comply with the requirements of the legislation of the Republic of Kazakhstan to the insurance (reinsurance) contract.

      4. The contract of co-insurance (joint reinsurance), concluded in the framework of the activities of insurance (reinsurance) pool should contain the number and date of conclusion of the contract on joint activities, information about the participants of the insurance (reinsurance) pool, as well as the signature of the authorized person of the insurance (reinsurance) company, being the leading one in the activity of the insurance (reinsurance) pool, or an insurance broker, attracted to manage activities of the insurance (reinsurance) pool.

      5. Insurance reserves shall be formed by each participant of the insurance (reinsurance) pool in accordance with the volumes of accepted liabilities.

      6. It is prohibited to participate in the insurance pool of the insurance company, the license of which does not specify the appropriate class of insurance.

      7. It is prohibited to participate in the reinsurance pool of the insurance (reinsurance) company that does not have a license to carry out reinsurance activities in the relevant insurance industry.

      8. The insurance (reinsurance) pool shall not be liable for the obligations of its participants arisen outside the scope of the pool's activities, as well as the participants of the insurance (reinsurance) pool shall not be liable for the obligations of other participants arisen outside the scope of the pool's activities.

      9. To manage the activities of the insurance (reinsurance) pool, insurance brokers may be involved, having the appropriate license of the authorized body, if there is an agreement between the participants of the insurance (reinsurance) pool and the insurance broker.

      At the same time, the insurance broker shall be entrusted with the functions of the leading insurance (reinsurance) company.

      Footnote. Article 13 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 14. Prohibition on the unlicensed activity

      1. No person who does not have the appropriate license of the authorized body shall have the right to:

      1) carry out on its own name the insurance, reinsurance activities, provide services of an insurance broker, actuary in the cases provided for in paragraphs 4 and 5 of Article 11-1 of this Law, as a primary or additional activity;

      2) use the words "insurance", "reinsurance", "insurance company", "reinsurance company", "reinsurance company", "insurance broker" or words (expressions) derived from them in any language in the name, documents, announcements and advertisement, implying that it carries out insurance or reinsurance operations on its own name or acts as an insurance broker, actuary in the cases provided for by paragraphs 4 and 5 of Article 11-1 of this Law.

      2. It is prohibited to carry out insurance activities without a license of the authorized body, except for the activities of mutual insurance companies.

      Footnote. Article 14 as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 15. Trans border insurance and reinsurance

      1. Insurance, related to the implementation of activities by an insurance company on the conclusion and execution of insurance contracts in another state, shall be transboundary.

      2. Is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

      3. Intermediary activity on conclusion of an insurance contract with an insurance company– non-resident of the Republic of Kazakhstan, with the exception of insurance contracts of civil liability of owners of vehicles traveling outside the Republic of Kazakhstan, the risks, specified in subparagraph 2) of paragraph 2 of Article 5-1 of this Law, shall not be allowed on the territory of the Republic of Kazakhstan is not, unless otherwise is provided by international treaties, ratified by the Republic of Kazakhstan.

      4. The insurance companies-residents of the Republic of Kazakhstan having the license of the authorized body with indication of the corresponding class of insurance and insurance brokers-residents of the Republic of Kazakhstan in the presence of the relevant agreement concluded with the named insurance company – non-resident of the Republic of Kazakhstan, may also carry out the intermediary activity on conclusion in the territory of the Republic of Kazakhstan on behalf of the insurance company–non-resident of the Republic of Kazakhstan of insurance contracts of civil liability of owners of vehicles traveling outside the Republic of Kazakhstan, the risks specified in subparagraph 2) of paragraph 2 of Article 5-1 of this Law.

      5. (Is excluded – dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2).
      Footnote. Article 15 as amended by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004), dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.04.2019 No. 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 15-1. Prohibition on provision of preferential conditions to the persons connected with the insurance (reinsurance) company by special relations

      Footnote. Title as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

      1. The insurance (reinsurance) company shall be prohibited from providing preferential conditions to the persons connected with the insurance (reinsurance) company by special relations.

      2. Provision of preferential conditions to a person connected with an insurance (reinsurance) company by special relations means a transaction with a person connected with an insurance (reinsurance) company by special relations, or in its interests, which by its nature, purpose, peculiarities and risk, the insurance (reinsurance) company would not have committed with a person not connected with it by special relations, namely:

      1) application of the insurance tariff is lower or the insurance payment is higher than for other insurants;

      2) payment of the acquired property and (or) services to the person connected with the insurance (reinsurance) company by special relations, at a price higher than the payment of similar acquired property and (or) services to the third parties, for a transaction or a set of transactions, the value of which exceeds the amount established by the regulatory legal act of the authorized body;

      3) sale of property to a person connected with an insurance (reinsurance) company by special relations at a cost lower than the sale of similar property to the third parties or lower than the market value;

      4) transactions previously referred by the authorized body to transactions with preferential conditions through the use of reasoned judgment.

      Additional criteria for referring transactions to the transactions with preferential conditions shall be established by the regulatory legal act of the authorized body.

      2-1. As persons, connected with the insurance (reinsurance) company by special relations shall be recognized:

      1) an official or a managing employee, the first head and the chief accountant of branch of this insurance (reinsurance) company, and also their spouses and close relatives;

      2) an individual or a legal entity being a major participant in this insurance (reinsurance) company, or an official of a major participant in the insurance (reinsurance) company, as well as their spouses and close relatives;

      3) a legal entity in which the persons specified in subparagraphs 1) and 2) of this paragraph own ten or more percent of the outstanding shares (less preferred and redeemed shares) or shares in the charter capital or are officials;

      4) affiliated persons of the insurance (reinsurance) company;

      5) an individual or a legal entity corresponding to the signs of connection with the insurance (reinsurance) company by special relations established by the regulatory legal act of the authorized body.

      The authorized body shall have the right to refer an individual or a legal entity to the persons connected with the insurance (reinsurance) company by special relations, through the use of substantiated judgment. In this case, this individual or a legal entity shall be recognized as an insurance (reinsurance) company by a person related to it by special relations, from the date of receipt of the appropriate supervisory response measures of the authorized body by the insurance (reinsurance) company.

      An independent director, national managing holding, which is a shareholder of the insurance (reinsurance) company, and legal entities, ten or more percent of the shares (stakes in the charter capital ) of which belong to such a national managing holding, as well as legal entities in which the official of the insurance (reinsurance) company, which is an independent director, is an independent director in the management bodies, as well as other persons, defined by the regulatory legal act of the authorized body, shall not be recognized as persons related to the insurance (reinsurance) company by special relations for the purposes of this Article.

      3. Is excluded by the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524 -IV (shall be enforced upon expiry of ten calendar days after its first official publication).

      4. A transaction with a person connected with an insurance (reinsurance) company by special relations may be made subject to the requirements of paragraph 1 of this Article only by the decision of the board of directors of the insurance (reinsurance) company, except for the cases when the standard conditions of such transactions are approved by the board of directors of the insurance (reinsurance) company and apply to similar transactions with third parties.

      The waiver of the rights of claims in respect of assets provided (placed) to the persons (at the persons) connected with the insurance (reinsurance) company by special relations shall be carried out with the subsequent notification of the general meeting of shareholders.

      The person referred to in paragraph 2-1 of this Article shall not participate in the consideration and decision-making on any transaction between the insurance (reinsurance) company and:

      by himself (herself);

      any of his (her) close relatives or his (her) spouse;

      any legal entity in which he (she) or any of his (her) close relatives, his (her) spouse, is an official (except for an independent director) or a major participant.

      The decision of the board of directors on any transaction between an insurance (reinsurance) company and a person connected with an insurance (reinsurance) company by special relations may be made only after consideration of all its conditions by the board of directors.

      4-1. is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

      5. The insurance (reinsurance) company shall be obliged to provide the authorized body with information on persons connected with the insurance (reinsurance) company by special relations, as well as on all transactions concluded with these persons, in the order, terms and forms provided for by the regulatory legal acts of the authorized body.

      5-1. is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

      6. The requirements of this Article shall apply to insurance holding companies, except for:

      1) non-residents of the Republic of Kazakhstan, that are an insurance holding company, a person with characteristics of an insurance holding company, if any of the following conditions:

      presence of an individual’s credit rating not lower rating A one of the rating agencies, the list of which shall be established by the authorized body, as well as a written confirmation from the financial supervisory authority of the country of origin of an insurance holding company, the person, having the characteristics of the insurance holding company, that these persons - residents of the Republic of Kazakhstan shall be subject to the consolidated supervision;

      existence of an agreement between the authorized body and the relevant supervisory body of a foreign state for the exchange of information, as well as the minimum required rating of one of the rating agencies. Minimum rating and list of rating agencies shall be established by the regulatory legal act of the authorized body;

      2) insurance holding companies, that are the bank holding companies-members of the banking conglomerates.

      Footnote. Chapter 3 is supplemented by Article 15-1, in accordance with the Law of the Republic of Kazakhstan dated 23.10.2008 No. 72-IV (the order of enforcement see Art. 2), as amended by the Laws of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication), dated 26.12.2012 No. 61-V (shall be enforced from 04.02.2012); dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016); dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

Article 15-2. Requirements for the insurance company and Internet resources at the conclusion of an insurance contract in electronic form

      1. In cases provided for by separate legislative acts of the Republic of Kazakhstan regulating obligatory types of insurance or insurance rules, insurance contracts may be concluded in electronic form by exchanging electronic information resources between the insurant and the insurer.

      2. The Internet resource of the insurance company shall be used for the exchange of electronic information resources between the insurant (insured, beneficiary) and the insurer.

      Voluntary insurance contracts may also be concluded in electronic form using the Internet resources of other organizations that are partners of the insurer on the basis of the relevant agreement.

      The list of Internet resources of insurance companies used for the conclusion of insurance contracts in electronic form shall be placed on the Internet resource of the organization for formation and maintenance of the database.

      3. The procedure for the exchange of electronic information resources between the insurant (insured, beneficiary) and the insurer shall be determined by the regulatory legal act of the authorized body.

      4. When concluding the insurance contract with use of the Internet resource of the insurer and (or) Internet resources of other organizations according to paragraph 1 and part two of paragraph 2 of this Article, the insurance company shall be obliged to provide:

      1) immediate notification to the insurant of the conclusion on the insurance contract or refusal to conclude it (indicating the reasons for refusal) in the form of an electronic message;

      2) the ability of the insurant to check the information on the insurance contract through the information system of the organization;

      3) storage of the insurance contract in electronic form with provision of round-the-clock access for the insurant to the Internet resource of the insurance company;

      4) the possibility for the insurant (insured, beneficiary) to create and send to the insurance company information in electronic form (applications, notifications and (or) other documents, information) necessary for:

      changes in information, renewal of the insurance contract;

      early termination of the insurance contract;

      notification of the insured event;

      determining the amount of damage caused;

      receipt of insurance payment.

      Notification on conclusion of the insurance contract shall be sent from the organization for formation and maintenance of the database.

      The procedure for notification on conclusion of the insurance contract and the requirements for the content of the notification shall be established by the regulatory legal act of the authorized body.

      5. When concluding an insurance contract using the Internet resource of the insurer and (or) Internet resources of other organizations, this insurance contract shall be deemed concluded by the insurant on the terms proposed by the insurer from the date of payment of the insurance premium (the first insurance premium in case of payment of the insurance premium in installments), unless otherwise provided by the insurance contract.

      6. When concluding an insurance contract using the Internet resource of the insurer and (or) Internet resources of other organizations, the insurant shall pay the insurance premium (the first insurance contribution in case of payment of the insurance premium in installments) after familiarization with the standard terms of insurance, provided by legislative acts of the Republic of Kazakhstan, or with the rules of insurance of the insurer, thereby confirming his (her) consent to conclude this contract of accession on the terms proposed to him (her).

      7. The activity of insurance agents on the conclusion of insurance contracts with the use of information systems of insurance companies intended for conclusion of insurance contracts in electronic form through information interaction between the insurant and the insurance company shall not be allowed.

      Footnote. Chapter 3 is supplemented by Article 15-2, in accordance with the Law dated 02.07.2018 No. 166-IV (shall be enforced from 01.01.2019).

Article 16. Requirements to the insurance company, insurance broker, organization guaranteeing implementation of insurance payments to the insurants (insured, beneficiaries) in case of compulsory liquidation of insurance companies, the organization for formation and maintenance of the database, the insurance ombudsman to inform the insurants

      1. In order to bring to the insurants (insured, beneficiaries), persons intending to conclude an insurance contract, information about their activities, an insurance company, insurance broker, organization guaranteeing implementation of insurance payments to the insurants (insured, beneficiaries) in case of compulsory liquidation of insurance companies, organization for formation and maintenance of the database, the insurance ombudsman must have an Internet resource.

      2. The following information shall be placed on the Internet resource of the insurance company:

      1) full name, address (location), phone numbers, office hours, including branches and representative offices;

      2) information about the shareholders;

      3) information about the executives;

      4) information on the state registration number and business identification number;

      5) information on the number, date of issue of the license;

      6) information on the activities carried out;

      7) annual financial statements confirmed by the audit organization for the previous three reporting years;

      8) annual consolidated financial statements confirmed by the audit organization for the previous three reporting years (if any);

      9) reports on the results of activities for the previous three reporting years (if any);

      10) information on participation in associations (unions), including the association of insurance (reinsurance) companies and insurance brokers (if any);

      11) ratings assigned to the insurance company by rating agencies (in case of assignment);

      12) data on the created insurance (reinsurance) pools (for the insurance (reinsurance) company being the leading one in activity of the insurance (reinsurance) pool);

      13) insurance rules for types of insurance in voluntary form, which provides for the possibility of concluding an insurance contract in electronic form, with the possibility to view their previous versions, changes and additions;

      14) information on the amounts of insurance tariffs (insurance premiums, contributions) by types of insurance in accordance with the regulatory legal act of the authorized body. The instruction on requirements to the methods of assessment and principles of calculation of insurance rates on classes (types) of insurance of the insurance (reinsurance) companies shall be approved by the regulatory legal act of the authorized body.

      3. The following information shall be placed on the Internet resource of the insurance broker:

      1) information, specified in subparagraphs 1), 3), 4), 5), 6), 7), 8), 9) and 10) of paragraph 2 of this Article;

      2) information about the shareholders (participants);

      3) information on the current contract of insurance of civil liability of the insurance broker to third parties, including the number and date of the contract conclusion, the name of the insurer, the object of insurance and the list of risks that are the subject of the contract, the period of its validity and the insurance amount under the contract.

      4. The following information shall be placed on the Internet resource of the organization guaranteeing implementation of insurance payments to the insurants (insured, beneficiaries) in case of compulsory liquidation of insurance companies:

      1) information specified in subparagraphs 1), 2), 3), 4), 6), 7), 9) and 10) of paragraph 2 of this Article;

      2) information about insurance companies-participants.

      5. The following information shall be placed on the Internet resource of the insurance ombudsman:

      1) information, specified in subparagraphs 6), 9) and 10) of paragraph 2 of this Article;

      2) full name, address (location), telephone numbers, working hours of the office of the insurance ombudsman, including its branches and representative offices;

      3) information on the election of the insurance ombudsman;

      4) list of insurance companies that are members of the council of representatives of the insurance ombudsman;

      5) internal rules governing the activities of the insurance ombudsman, including the procedure and terms of consideration of applications for disputes resolution and decision-making, as well as memoranda concluded with the participants of the insurance market.

      6. The following information shall be placed on the Internet resource of the organization for formation and maintenance of the database:

      1) information, specified in subparagraphs 1), 4), 6), 9) and 10) of paragraph 2 of this Article;

      2) information about the managers;

      3) information about the shareholders (participants).

      7. The order of placement of information on the Internet resource of the insurance company, insurance broker, the organization guaranteeing implementation of insurance payments to the insurants (insured, beneficiaries) in case of compulsory liquidation of insurance organizations, the insurance ombudsman, the organization for formation and maintenance of the database shall be established by the authorized body.

      8. In case of change of the location of the permanent acting body, change of the name of the insurance company, insurance broker shall notify the insurant about it by publishing announcement in two periodicals distributed throughout the Republic of Kazakhstan, in Kazakh and Russian languages no later than one month and on the Internet resource of the insurer within ten working days.

      In case of change of the location of its separate division, the insurance company, insurance broker shall notify its insurants about it by publishing the announcement in two periodicals distributed throughout the territory of the Republic of Kazakhstan, in Kazakh and Russian languages not later than one month and on its Internet resource within ten working days.

      9. When concluding the islamic insurance contract, the insurant shall have the right to request from the islamic insurance company the conclusion of the council on the principles of islamic financing, confirming compliance of the insurance rules with the requirements, specified in Chapter 6-1 of this Law.

      Footnote. Article 16 is in the wording of the Law dated 02.07.2018 № 166-VI (shall be enforced from 01.01.2019).

Chapter 4. Insurance mediation

Article 16-1. Creating an insurance broker

      1. The legal organizational form of an insurance broker shall be a limited liability company or a joint stock company.

      2. The name of an insurance broker shall contain the words “insurance broker” or derivative words.

      3. Insurance broker shall be prohibited to use in its name the words “national”, “central”, “budget”, “republican”.

      4. Using as a name the appellations that are identical or similar to the point of mixing it with the name of the previously created insurance brokers, including insurance brokers that are non-residents of the Republic of Kazakhstan, shall not be allowed. This prohibition shall not apply to a subsidiary of an insurance broker in the case of its use the parent organization’s name.

      5. The state registration of an insurance broker shall be made in the manner specified by the legislation of the Republic of Kazakhstan.

      Note of the RCLI!
      Article 16-1 is provided to supplement by paragraphs 6 and 7 in accordance with the Law of the Republic of Kazakhstan dated 24.11.2015 No. 422-V (shall be enforced from 16.12.2020).
      Footnote. Section is supplemented by Article 16-1 by the Law of the Republic of Kazakhstan dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2).

Article 16-2. Requirements for the founders of an insurance broker

      1. Participating of an insurance (reinsurance) company or its employees in the creation and activities of an insurance broker shall be prohibited.

      2. The founders and employees of an insurance broker cannot hold simultaneously any positions in the insurance (reinsurance) company.

      Footnote. Section is supplemented by Article 16-2 by the Law of the Republic of Kazakhstan dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2).

Article 16-3. Formation of the authorized capital of an insurance broker

      1. The founders, members or shareholders of an insurance broker shall pay the purchased participation shares or shares solely in cash in national currency.

      2. The minimum amount of the authorized capital of a creating insurance broker shall be fully paid by the founders at the time of its state registration.

      3. Requirements to the minimum amount of the authorized and own capital of the insurance broker shall be established by the regulatory legal act of the authorized body.

      Footnote. Section is supplemented by Article 16-3 by the Law of the Republic of Kazakhstan dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2); as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 17. Activity of an insurance broker and requirements imposed to it

      1. The activity of an insurance broker shall be an exclusive activity and shall be subject to licensing by the authorized body.

      An insurance broker shall be prohibited to:

      1) carry out the activity of an insurance agent;

      2) participate in public procurement for the provision of services related to conclusion of insurance contracts;

      3) transfer risks to reinsurance to a reinsurer-non-resident of the Republic of Kazakhstan with participation of two or more insurance brokers -

      non-residents of the Republic of Kazakhstan;

      4) issue money to the employees and affiliated persons without primary accounting documents;

      5) provide financial assistance free of charge, with the exception of financial assistance to the employees of the insurance broker for an amount not exceeding one hundred times the size of the monthly calculation index.

      2. An insurance broker shall carry out the following types of brokerage activity:

      1) intermediary activity on conclusion of insurance contracts on its own behalf and on behalf of the insurant;

      2) intermediary activity on conclusion of reinsurance contracts on its own behalf and on behalf of the reinsurant (assignor).

      3. The activity of an insurance broker may include the following types of activity:

      1) consulting activity on insurance (reinsurance) issues;

      2) search and attraction of individuals and legal entities to insurance (reinsurance);

      3) comparative analysis of services and financial condition of insurance (reinsurance) companies;

      4) collection of information about the objects of insurance in order to conduct a comparative analysis of services provided by insurance (reinsurance) companies;

      5) development of insurance (reinsurance) conditions, criteria for selection of insurers (reinsurers) on behalf of clients, provision of expert services to identify insurance risks;

      6) preparation and (or) execution on behalf of the insurant (assignor) of documents necessary for conclusion of the insurance contract (reinsurance) of documents, collection of information on insurance issues;

      7) execution of the insurance (reinsurance) contract on behalf of the insurant (assignor);

      8) collection of insurance premiums from the insurants (assignors) under insurance (reinsurance) contracts for their subsequent transfer to insurance (reinsurance) companies in the presence of the relevant agreement with the insurant (assignor);

      9) placement of insurance risks under insurance (reinsurance) or co-insurance (joint reinsurance) contracts on behalf of clients;

      10) ensuring the correct and timely execution of documents when concluding the contract of insurance (reinsurance), implementation of insurance payments, consideration of claims in the event of an insured event, as well as other documents related to the concluded contracts of

      insurance (reinsurance);

      11) consulting and assistance in obtaining of the insurance payment in the event of an insured event by the insurant (assignor), the beneficiary;

      12) execution of necessary documents for receiving the insurance payment in accordance with the powers granted;

      13) collection on behalf of the insurant (assignor) of insurance payments from insurance (reinsurance) companies for their subsequent transfer to the insurant (assignor), the beneficiary;

      14) preparation of documents for consideration and settlement of losses in the event of an insured event on behalf of interested parties;

      15) organization of services of experts in damage assessment and determination of the amount of insurance payment;

      16) the activity, specified in paragraph 4 of Article 15 of this Law;

      17) management the activity of the insurance (reinsurance) pool on the basis of an agreement with its participants.

      4. An insurance broker shall be prohibited from carrying out investment activities to place the amounts of insurance premiums or insurance payments received from the policyholder (assignor) or the insurer (reinsurer).

      An insurance broker shall have the right to place its own funds on deposits in the second-tier banks of the Republic of Kazakhstan.

      5. An insurance broker in implementation of its activities is not a party to the contract of insurance (reinsurance).

      6. The basic rights, duties and responsibilities of the insurance broker shall be determined in its internal rules of carrying out an activity of an insurance broker.

      7. Any remuneration to an insurance broker for carrying out the brokerage activity, specified in paragraph 2 of this Article in the interests of the insurant (assignor) shall be subject to payment only by the insurant (assignor), except for the case provided for in paragraph 8 of this Article.

      8. If an insurance broker and (or) its affiliated person – an insurance broker (including an insurance broker-non-resident of the Republic of Kazakhstan) carried out intermediary activity on conclusion contracts of insurance and (or) reinsurance on one insurance risk, an insurance broker and its affiliated person – an insurance broker (including an insurance broker-non-resident of the Republic of Kazakhstan) shall make mutual settlements among themselves connected with remuneration on the specified insurance risk.

      9. The terms and procedure for implementation of activity of an insurance broker shall be determined by the regulatory legal act of the authorized body.

      Footnote. Article 17 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (see Article 2).

Article 18. Intermediary activity of an insurance agent and requirements for it

      1. The powers of an insurance agent for carrying out intermediary activities in the insurance market shall be determined by the contract of agency subject to the requirements of this Law and regulatory legal acts of the authorized body.

      Requirements for the contract of agency concluded between the insurance company and the insurance agent shall be established by the regulatory legal act of the authorized body.

      The insurance agent personally shall perform actions to which he (she) is authorized by the insurance company, and shall not have the right to entrust their commission to another person.

      Activity as an insurance agent in the absence of his (her) powers shall not be allowed.

      2. The insurance company shall be obliged to fulfill the obligations under the insurance contract concluded by the insurance agent on its name and on its behalf.

      The insurance company shall be responsible for commission of the following actions by the insurance agent:

      1) conclusion of insurance contracts, as well as the commission of actions of the insurance agent beyond the established powers;

      2) conclusion of insurance contracts by classes (types) of insurance for which the insurance company does not have a license of the authorized body;

      3) intentional misrepresentation of the insurant under the terms of an insurance contract;

      4) non-compliance with the requirements stipulated by the legislation of the Republic of Kazakhstan on the execution of the insurance contract and documents on the basis of which the insurance contract is concluded;

      5) other violations of the requirements of the legislation of the Republic of Kazakhstan on insurance and insurance activities.

      The insurance company shall not be liable for the actions of an insurance agent not related to implementation of its intermediary activities under the legislation of the Republic of Kazakhstan on insurance and insurance activities.

      3. The terms and conditions required to be observed by an insurance agent, including the issues of accounting and storage of insurance reporting forms, work with cash, shall be established by internal documents of the insurance company taking into account the requirements of the legislation of the Republic of Kazakhstan.

      4. The insurance agent shall be prohibited from accepting payment in cash in payment of the insurance premium from the insurant, who is a legal entity, when concluding contracts of insurance in the name of and on behalf of the insurance company.

      This restriction does not apply to acceptance of payment in cash from persons temporarily entering the territory of the Republic of Kazakhstan by an insurance agent to pay the insurance premium under the insurance contract at the checkpoints across the State border of the Republic of Kazakhstan.

      Insurance premiums (insurance contributions) received by an insurance agent shall be subjects to delivery to the insurance company in full by transferring it to a bank account or to the insurance company's cash desk.

      Payment of commission remuneration to an insurance agent by the insurance company shall be carried out only after the insurance company receives the insurance premium (insurance contribution) in full, paid by the insurant under the relevant insurance contract.

      5. The insurance agent shall be prohibited to withhold from the insurance premiums received from the insurant of remuneration due to him under the contract of agency.

      6. It is not allowed to carry out intermediary activities of insurance agents within the powers provided for in Article 18-2 of this Law under one insurance contract by two or more insurance agents.

      It is not allowed to carry out intermediary activities of insurance agents under the contracts of:

      pension annuity concluded in accordance with the Law of the Republic of Kazakhstan "On Retirement Insurance in the Republic of Kazakhstan"

      annuity insurance, concluded in accordance with the Law of the Republic of Kazakhstan "On Compulsory Insurance of Employee against Accidents upon Performance of Labor (Official) Duties by them";

      insurance concluded in the framework of public procurement in accordance with the Law of the Republic of Kazakhstan "On public procurement";

      insurance for which the insurants are the national management holding, national holdings, national management companies, national companies, the national Bank of the Republic of Kazakhstan;

      insurance, for which the insurants are state bodies, state institutions, state enterprises, legal entities, fifty or more percent of the voting shares (stakes in the charter capital ) of which belong to the state, and legal entities affiliated with them;

      compulsory insurance of the tourist concluded in accordance with the Law of the Republic of Kazakhstan "On Compulsory Insurance of the Tourist";

      Note of the RCLI!
      Passage eight of part two of paragraph 6 shall be enforced from 01.01.2021 in accordance with the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (text is excluded).

      7. The commission remuneration includes all types of expenses of the insurance company in respect of an insurance agent who carried out the intermediary activities for conclusion of the insurance contract, including expenses for the payment of rent, any types of remuneration, as well as provision of any property or material benefit.

      Footnote. Article 18 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 18-1. The requirements for persons, involved in the brokering activity of an insurance agent, as well as to the order of their registration and training

      1. An individual shall not have the right carry out brokering activity of an insurance agent if he:

      1) is not attained the age of majority;

      2) is recognized by the court as incapable or partially capable;

      3) do not have a secondary education;

      4) is not trained in accordance with the requirements of paragraph 4 of this Article;

      5) is an employee of an insurance company, an insurance broker based on an employment contract;

      6) has a criminal record that not cancelled or expunged in accordance with the law;

      7) is previously served as an executive officer of an insurance (reinsurance) company, an insurance broker or other financial institution, in a period not exceeding one year prior to the decision of the authorized body on the compulsory redemption of shares of the insurance (reinsurance) company, revocation of the license, compulsory liquidation in order established by the legislation of the Republic of Kazakhstan, or other legal entity, declared as bankrupt in accordance with the legislation of the Republic of Kazakhstan. The above requirement shall apply within five years after the adoption of the decision by the authorized body on the compulsory redemption of shares of an insurance (reinsurance) company, revocation of the license, compulsory liquidation or recognition of a legal entity as bankrupt in accordance with the legislation of the Republic of Kazakhstan;

      8) had previously been an employee of an insurance broker, an insurance agent-legal entity, with which the employment contract was terminated at the initiative of an insurance broker, an insurance agent-legal entity in the case of employee’s unsuitability for the position or job due to insufficient qualifications. The above requirement shall apply for five years from the date of termination of the employment contract at the initiative of an insurance broker, an insurance agent-legal entity.

      1-1. The insurance company shall be obliged to check the compliance of an insurance agent with the requirements of subparagraphs 2) and 6) of paragraph 1 of this Article at least once every three years.

      2. Insurance company shall maintain a register of insurance agents and place it in a location that is accessible for review and guidance (including Internet resources) of consumers of insurance services.

      The basis for inclusion in the register of insurance agents shall be the compliance of the persons exercising brokering activity of an insurance agent with the requirements of paragraph 1 of this Article, and the availability of the document confirming the exams at the minimum training program.

      An insurance agent, being a legal entity, shall be included in the register of insurance agents with obligatory indication of at least two employees, whose duties include issues on conclusion of insurance contracts that meet the requirements of paragraph 1 of this Article, and if they have a document confirming the exams for the minimum training program.

      An insurance agent, being a legal entity, shall independently maintain a list of all employees whose duties include conclusion of insurance contracts that meet the requirements of paragraph 1 of this Article, and if they have a document confirming the exams for the minimum training program.

      3. Insurance company shall submit the register of persons, engaged in brokering activity of an insurance agent to the authorized body in the manner and time, stipulated by the regulatory legal act of the authorized body.

      4. The organization of training and issuance of an appropriate document confirming the exams for the minimum training program shall be carried out by an insurance company or an insurance agent, which is a financial organization.

      The minimum training program and the requirements to the procedures for training shall be set by the authorized body.

      The insurance company shall have the right not to recognize the document confirming the exams on the minimum program of training issued to the insurance agent by other insurance company or by an insurance agent who is the financial organization.

      5. The grounds for exclusion from the register of insurance agents shall be:

      1) a supervisory response measure, except for a recommendatory supervisory response measure, applied by the authorized body to the insurance company on the identified violations of the legislation of the Republic of Kazakhstan, committed by an insurance agent;

      2) identification by the insurance company of conclusion by an insurance agent of insurance contracts contradicting the requirements of the legislation of the Republic of Kazakhstan;

      2-1) identification by the insurance company of non-fulfillment by an insurance agent of obligations arising from the terms of the agency contract;

      3) an identification of non-compliance of a person exercising brokering activity of an insurance agent with the requirements provided for in paragraph 1 of this Article, by the authorized body, an insurance company;

      4) termination of the contract of order by agreement of the parties;

      5) failure to implement by an insurance agent of intermediary activity on conclusion of insurance contracts within the last two years.

      In case of an exception of an insurance agent of the register of insurance agents on the bases provided in subparagraphs 1), 2) and 3) of part one of this point, implementation of activity of an insurance agent within five years from the moment of his exception is forbidden to this person.

      In case of termination of the contract of the order concluded between insurance company and an insurance agent on the bases which are not connected with the circumstances provided in subparagraphs 1), 2) and 3) of part one of this point, information on an insurance agent is subject to removal from the register of insurance agents after one year from the date of termination of the contract of order.

      An employee of an insurance agent, being a legal entity, committed a violation of the legislation of the Republic of Kazakhstan on insurance and insurance activities, shall be excluded from the list of employees, whose duties include the conclusion of insurance contracts.

      Footnote. Chapter 4 is supplemented by Article 18-1 in accordance with the Law of the Republic of Kazakhstan dated 20.02.2006 No. 128 (the order of enforcement see Art. 2), is in the wording of the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2009).

Article 18-2. The rights and obligations of an insurance agent

      1. An insurance agent in his activities shall have the right to:

      1) being an individual, to carry out intermediary activity in the name of and on behalf of one insurance company operating in the sector of "life insurance", and (or) one insurance company operating in the sector of "general insurance", subject to the restrictions provided for in Articles 18 and 18-1 of this Law;

      2) obtain reliable information from an insurance company on the licenses and the financial statements;

      3) carry out the consulting activities for insurance;

      4) receive remuneration from an insurance company for the implementation of its brokering activities by cashless payment.

      2. An insurance agent in his activities shall:

      1) show a policyholder a contract of agency, as well as the documents:

      proving his identity;

      confirming the availability of its data in the register of insurance agents;

      2) provide information on the insurance company, the insurance agent that he is, including a copy of the license of the insurance company to engage in insurance activities;

      3) inform a policyholder with the insurance rules on the concluded insurance contracts and provide a copy of the rules in the cases provided for in Article 828 of the Civil Code of the Republic of Kazakhstan;

      4) provide information and, if available all the necessary documents for an insurance contract;

      5 ) ensure the proper and timely execution of documents at the conclusion of an insurance contract;

      6) ensure the confidentiality of the information, received in carrying out brokering activities;

      7) hand over the insurance premiums (insurance contributions) received in full from the insurants to the insurance company.

      Footnote. Chapter 4 is supplemented by Article 18-2 in accordance with the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2); as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 5. The actuarial activities and audit

Article 19. Actuarial activities

      1. Is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

      2. Actuarial activities shall be carried out in accordance with this Law and the regulatory legal acts of the authorized body, as well as in accordance with the international principles (standards) for carrying out actuarial activities.

      2-1. Actuarial activity includes the provision of services on:

      1) calculation of liabilities amounts under insurance and reinsurance contracts;

      2) determination of the amount of loans granted to the insurants under accumulative insurance contracts;

      3) drawing up an actuarial conclusion on a major transaction under insurance and reinsurance contracts;

      4) the development of methodology of calculation and an economic substantiation of insurance tariffs and calculation of rates of insurance premiums under insurance and reinsurance contracts;

      5) the analysis and updating of the indicators of survival for assessment of insurance premiums and reserves under the contracts for annuity insurance and life insurance;

      6) provision of consulting services and recommendations on the issues of actuarial calculations;

      7) the issues related to the assessment of financial stability and solvency of the insurance (reinsurance) company;

      8) analysis and quantitative, financial assessment of risks and (or) financial liabilities arising from the risks, as well as the development and assessment of efficiency of financial risks management methods.

      3. Actuarial calculations shall be made for the following reasons:

      1) at the initiative of an insurance (reinsurance) company – the initiative actuarial calculations;

      2) in the cases provided by the legislation of the Republic of Kazakhstan, - the required actuarial calculations.

      4. In the production of actuarial calculations an insurance (reinsurance) company shall submit all the available documents and information necessary for the production and preparation of required actuarial calculations and conclusions, required by the actuary.

      5. An actuary shall be responsible for the correctness and accuracy of actuarial calculations and the conclusions made ??by him, in the manner prescribed by the Laws of the Republic of Kazakhstan.

      6. An actuary shall immediately notify the authorized body on the findings of non-compliance of an insurance (reinsurance) company with the requirements for the formation of insurance reserves.

      7. An independent actuary shall send the results of validation of calculations carried out by an actuary on the staff of the insurance (reinsurance) company to the authorized body, in the manner and terms, established by the regulatory legal act of the authorized body.

      Footnote. Article 19, as amended by the Laws of the Republic of Kazakhstan dated 07.05.2007 No. 244, dated 26.07.2007 No. 313 (the order of enforcement see Art. 2), dated 15.07.2010 No. 338-IV (shall be enforced from 01.01.2012); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 20. Audit

      1. Audit of the insurance (reinsurance) company, insurance broker and the organization guaranteeing implementation of insurance payments shall be made by an auditing organization authorized to conduct audit in accordance with the legislation of the Republic of Kazakhstan on audit activity and complying with the requirements of paragraph 1-1 of this Article.

      1-1. The audit report shall be recognized as valid subject to submission of documents, confirming that the audit organization:

      independent from the audited insurance (reinsurance) company, its shareholders and executives;

      independent from the audited insurance broker, its shareholders (participants) and executives;

      independent from the audited organization, guaranteeing implementation of insurance payments, its shareholders and executives;

      authorized to carry out audit activities in accordance with the license and meets the minimum requirements for audit organizations that conduct a mandatory audit of financial institutions, developed by the authorized state body, carrying out state regulation in the field of audit activities and control over the activities of audit and professional audit organizations, in consultation with the authorized body, or authorized to carry out audit activities in accordance with the license of the competent authority of the state, the resident of which is.

      2. Insurance (reinsurance) company, insurance broker, organization guaranteeing implementation of insurance payments, insurance holding and organizations in which the insurance (reinsurance) company and (or) insurance holding are major participants, as well as organizations that are part of the insurance group, shall not be entitled to conduct audit of its activities for more than seven consecutive years in one audit organization or more than five years in a row from an auditor working in an audit organization.

      The requirement of this paragraph shall not be applied to the insurance (reinsurance) company, which is part of the banking conglomerate.

      3. Audit of organizations that are part of an insurance group as the parent company and its subsidiaries, that are the residents of the Republic of Kazakhstan shall be carried out by one and same audit firm. Audit of the parent company and its subsidiaries-non-residents of the Republic of Kazakhstan that are part of an insurance group shall be carried out by the same audit firm in cases where conduct of an audit is not contrary to the requirements of the legislation of their country of residence.

      4. An audit firm shall have the right to conduct an audit of an insurance (reinsurance) company by hiring an independent actuary.

      5. The audit report of financial statements of an insurance (reinsurance) company or other legal entities that are part of an insurance group shall not constitute a trade secret.

      6. Insurance (reinsurance) company shall have in its structure, the internal audit service (auditor), the activity of which shall not be subject to licensing.

      7. The procedure for internal auditing shall be defined by the relevant internal documents of an insurance (reinsurance) company, subject to the requirements of regulatory legal acts of the authorized body.

      8. Conducting audit on the results of the financial year shall be obligatory for insurance (reinsurance) companies (except for the insurance (reinsurance) company, deprived of a license to carry out insurance (reinsurance) activities or in the process of compulsory liquidation), insurance holdings and organizations in which the insurance (reinsurance) company and (or) insurance holding are major participants, insurance brokers, organizations guaranteeing implementation of insurance payments. Copies of the audit report and recommendations of the audit organization shall be submitted by the insurance (reinsurance) companies, insurance holdings, organizations in which the insurance (reinsurance) company and (or) insurance holding are major participants, insurance brokers, the organization guaranteeing implementation of insurance payments, and audit organizations to the authorized body within thirty calendar days from the date of receipt of these documents or their submission to the insurance (reinsurance) companies, insurance holdings and organizations, in which the insurance (reinsurance) company and (or) insurance holding are major participants, insurance brokers, organizations guaranteeing implementation of insurance payments.

      Insurance (reinsurance) company shall submit a copy of the audit report within ten calendar days of its receipt by another legal entity, in which an insurance (reinsurance) company has a significant shareholding.

      The consolidated annual financial statements of an insurance (reinsurance) company and an insurance holding company shall be certified by an audit firm.

      9. An insurance holding company - a non-resident of the Republic of Kazakhstan that is subject to consolidated supervision in the country of its location, shall submit a copy of the audit report and recommendations of the audit firm to the authorized body within thirty calendar days from the date of receipt of these documents in Kazakh and Russian languages.

      The consolidated annual financial statements of an insurance holding company - a non-resident of the Republic of Kazakhstan that is subject to consolidated supervision in the country of their location, shall be certified by an audit firm eligible to conduct of an audit of financial institutions in the country of their location.

      10. In case of non-elimination of shortcomings, which influence the financial state of the insurance (reinsurance) company or insurance group, an insurance broker, the organization guaranteeing implementation of insurance payments, specified in the audit report within the term determined by authorized body, by the insurance (reinsurance) company, insurance holding, the organization which is a part of insurance group, an insurance broker, the organization guaranteeing implementation of insurance payments, the authorized body shall have the right to apply until elimination of shortcomings:

      to the insurance (reinsurance) company, insurance broker, organization guaranteeing implementation of insurance payments – of measures on improving the financial state and (or) minimize the risks provided for in Article 53-3 of this Law;

      to the insurance holding, the organization which is a part of insurance group – of compulsory measures of supervisory response provided by paragraph 2 of Article 53-4 of this Law.

      In case of non-elimination by the insurance holding of shortcomings which influence the financial state of the insurance (reinsurance) company or insurance group, specified in the audit report within one year from the date of receipt by the specified persons of this report, the authorized body before elimination of shortcomings shall have the right to apply to the insurance holding the compulsory measures of supervisory response provided by paragraph 3 of Article 53-4 of this Law.

      11. In case of revealing a deviation of opinion and conclusions on financial statements and (or) other information related to financial statements, in terms of recognition of assets, liabilities and contingent liabilities of insurance (reinsurance) companies, insurance holdings and organizations in which the insurance (reinsurance) company and (or) insurance holding are major participants, insurance brokers, the organization guaranteeing implementation of insurance payments set out in the audit report, from the results of the audit conducted by the authorized body, the authorized body shall have the right to require explanations of the reasons of such deviation from the auditing organization.

      12. The authorized body in case of identification of risks and shortcomings in the activity of the insurance (reinsurance) company shall have the right to require from it conducting audit of other information concerning the assessment of risks management system and internal control, including strategy and business model, an assessment of system of corporate management, an assessment of system of risks management of information technologies, an assessment of efficiency of system of information security, and also efficiency of system of internal control in the sphere of counteraction to legalization (laundering) of the income received by criminal means, and financing terrorism (further – audit of other information) with indication of the list of issues which are subject to check, the audited period and term of submission by the auditor organization of the audit conclusion on audit of other information to the authorized body.

      Conducting audit of other information at the request of the authorized body shall obligatory for the insurance (reinsurance) company.

      The insurance (reinsurance) company shall conduct an audit of other information no more than once a year, on one issue the audit of other information shall be carried out no more than once every three years, except for the case provided for in paragraph 14 of this Article.

      The list of issues to be audited as part of the audit of other information, requirements for the content, terms of submission by the audit organization of audit conclusion on the audit of other information, requirements for the auditors as part of the audit organization involved in the audit of other information, shall be established by the regulatory legal acts of the authorized body in consultation with the authorized state body carrying out state regulation in the field of audit activities and control over the activities of audit and professional audit organizations.

      The plan for conducting audit of other information with a description of the intended directions, scope, nature of the audit, peculiarities of the methods and standards used in the audit shall be subject to prior approval by the audit organization with the authorized body.

      The audit conclusion on audit of other information shall be submitted to the authorized body by the audit organization and shall not be subject to publication.

      The results of the audit of other information may be taken into account by the authorized body in the application of supervisory response measures.

      13. For carrying out an audit or audit of other information, an insurance (reinsurance) company, an insurance holding company and an organization in which the insurance (reinsurance) company and (or) insurance holding company are major participants, an insurance broker, an organization guaranteeing implementation of insurance payments, shall attract an audit organization meeting the minimum requirements for audit organizations that conduct a mandatory audit of financial organizations developed by an authorized state body, carrying out state regulation in the field of audit activities and control over the activities of audit and professional audit organizations, in coordination with the authorized body.

      The insurance (reinsurance) company, insurance holding and the organization in which the insurance (reinsurance) company and (or) insurance holding are major participants, the insurance broker, the organization guaranteeing implementation of insurance payments, no later than ten working days after the conclusion of the contract for conducting audit or audit of other information shall notify the authorized body on the choice of the audit organization. In the case of audit other information the insurance (reinsurance) company shall be entitled to petition the authorized body on conducting inspection of other information by the organization which is not an audit by the other way, than the audit.

      The petition of the insurance (reinsurance) company shall be considered by the authorized body within five working days.

      The requirements to the procedure of audit of other information established by this Article shall apply to the procedure of audit of other information by other means than audit.

      The authorized body shall have the right to provide the audit organization with information and comments on the results of inspections of the persons, specified in part one of paragraph 8 of this Article, as well as other information related to their activities, including based on the reasoned judgment of the authorized body, including information constituting the secret of insurance and (or) commercial secret, without the consent of the persons, specified in part one of paragraph 8 of this Article before the audit organization issues the audit report and (or) audit conclusion on the audit of other information.

      The audit organization shall conduct an obligatory assessment and analysis of the information sent by the authorized body in accordance with part five of this paragraph. The results of the assessment and analysis shall be used by the audit organization in expressing the opinions and conclusions contained in the audit report or audit conclusion on the audit of other information.

      14. In case of recognition by the court of audit report and (or) audit conclusion on the audit of other information as invalid, the insurance (reinsurance) company, insurance holding, and organization, in which the insurance (reinsurance) company and (or) the insurance holding are the major participants, an insurance broker, the organization guaranteeing insurance payments, shall be obliged to conduct audit and (or) audit other information again.

      15. The authorized body shall have the right to request information from the audit organization, including information constituting a commercial secret, including the list of customers. Information on clients shall be provided with the consent of the clients of the audit organization.

      Footnote. Article 20 is in the wording of the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2); as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (see Article 2).

Chapter 6. Creating of an insurance (reinsurance) company

Article 21. Founders and shareholders of an insurance (reinsurance) company

      1. Founders and shareholders of an insurance (reinsurance) company may be individuals or legal entities - residents and non-residents of the Republic of Kazakhstan subject to the requirements stipulated in this Law and other regulatory legal acts of the authorized body.

      2. The state may be a founder and shareholder of an insurance (reinsurance) company only represented by the Government of the Republic of Kazakhstan and the authorized body.

      Organizations, more than fifty percent of the shares in the authorized capital or outstanding shares of which are owned by the state, except for national holding company, may not act as founders and shareholders of an insurance (reinsurance) company.

      3. (Is excluded – No. 72 dated 8.07.2005).

      4. Legal entities, registered in offshore zones, the list of which is established by the authorized body, may not directly or indirectly own and (or) use and (or) dispose of the voting shares of the insurance (reinsurance) companies - residents of the Republic of Kazakhstan.

      This restriction shall not apply to the insurance (reinsurance) companies that are subsidiaries of insurance (reinsurance) companies - non-residents of the Republic of Kazakhstan with the minimum required rating from one of the rating agencies.

      The list of rating agencies and the minimum required rating shall be established the regulatory legal act of the authorized body.

      5. A shareholder, participating in the general meeting of shareholders (except for the shareholder that is a bank - a resident of the Republic of Kazakhstan), shall submit a statement that indicates the implementation of the requirements of first part of paragraph 4 of this Article by its shareholders (participants), if the information about the country of registration of such shareholders (participants) is not in the insurance (reinsurance) company.

      A shareholder that did not present such application shall not be permitted to participate in the general meeting of shareholders.

      In identifying the unreliability of the information, specified in the application, or identification of violations of the requirements specified in first part of paragraph 4 of this Article:

      1) in the case that the decision is adopted by the majority of the voting shares (without voting shares of the shareholder, submitting the application), the decision of the general meeting of shareholders shall be considered as adopted without vote of the shareholder;

      2) if the vote of the shareholder, submitting the application, was decisive, this circumstance shall be a ground for annulment of the decision of the general meeting of shareholders at the request of the authorized body or other interested parties in accordance with legislation of the Republic of Kazakhstan.

      Footnote. Article 21, as amended by the Laws of the Republic of Kazakhstan dated 08.07.2005 No. 72 (the order of enforcement see Art. 2), dated 20.02.2006 No. 128 (the order of enforcement see Art. 2), dated 07.07.2006 No. 178 (shall be enforced from the day of its official publication), dated 26.07.2007 No. 313 (the order of enforcement see Art. 2), dated 23.10.2008 No. 72-IV (the order of enforcement see Art. 2), dated 13.02.2009 No. 135-IV (the order of enforcement see Art. 3), dated 28.12.2011 No. 524-IV (shall be enforced from 01.01.2010), dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 22. The legal status of an insurance (reinsurance) company

      1. An insurance (reinsurance) company shall be a commercial organization, established in the legal form of a joint stock company, and shall operate in accordance with this Law and other regulatory legal acts of the Republic of Kazakhstan.

      2. The legal status of the insurance (reinsurance) company shall be determined by the state registration of the legal entity as an insurance (reinsurance) company in the State corporation "Government for citizens" (hereinafter – the Corporation) and the availability of a license to carry out insurance activities.

      Note of the RCLI!
      Article 22 is provided to supplement with paragraph 3 in accordance with the Law of the Republic of Kazakhstan dated 24.11.2015 No. 422-V (shall be enforced from 16.12.2020).
      Footnote. Article 22 is in the wording of the Law of the Republic of Kazakhstan dated 30.12.2009 No. 234-IV; as amended by the Law of the Republic of Kazakhstan dated 02.04.2019 № 241-VI (shall be enforced from 01.07.2019).

Article 23. Name of an insurance (reinsurance) company

      1. An insurance (reinsurance) company shall use as its name that is specified in its charter.

      2. Full name of an insurance company, operating in the field “general insurance” shall necessarily contain the word “insurance” or its derivative words.

      2-1. Full name of the Islamic insurance company performing activity in the industry “general insurance” has to contain without fail the words “Islamic insurance” or derivatives of a word from them.

      3. Full name of an insurance company, operating in the field “life insurance” shall necessarily contain the words “life insurance” or its derivative words.

      3-1. Full name of the Islamic insurance company performing activity in the industry “life insurance” has to contain without fail the words “Islamic” and “life insurance” or derivatives of a word from them.

      4. Full name of a reinsurance company, operating exclusively in reinsurance, shall necessarily contain the word “reinsurance” or its derivative of words.

      4-1. Full name of the Islamic reinsurance organization performing activity only on the conclusion and performance of agreements of Islamic reinsurance has to contain without fail the words “Islamic” and “reinsurance” or derivatives of a word from them.

      5. The insurance (reinsurance) company shall be prohibited to use in its name the words "national", "central", "budget", "republican", except for the insurance company, which in accordance with the legislation of the Republic of Kazakhstan has the status of a national company.

      6. Using as a name of appellations that are identical or similar to the point of mixing it with the name of the previously created insurance (reinsurance) companies, including insurance (reinsurance) companies – non-residents of the Republic of Kazakhstan shall not be allowed. This prohibition shall not apply to the subsidiary insurance (reinsurance) company in the case of its use of the name of the parent organization.

      Footnote. Article 23 with the changes made by the Law of the Republic of Kazakhstan dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication); dated 03.04.2019 № 243-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 24. The bodies of an insurance (reinsurance) company

      1. An insurance (reinsurance) company shall necessarily form the following collegial bodies:

      1) a board of directors - the management body;

      2) a governing body - the executive body;

      3) an internal audit service – the supervising body;

      4) council for the principles of Islamic financing (only for the Islamic insurance (reinsurance) organization).

      A newly created insurance (reinsurance) company, operating in the field “general insurance” may have one auditor for two years after receiving the license of the authorized body in the field “life insurance” – within three years.

      2. In addition to the issues referred by the legislation of the Republic of Kazakhstan to the exclusive competence of the board of directors of a joint stock company, the board of directors of an insurance (reinsurance) company shall be competent to consider the issues, relating to breaches of the requirements of the legislation on financial stability and solvency of an insurance (reinsurance) company, established on the basis of the audit report of an audit firm, internal audit service or an actuary.

      Footnote. Article 24 as amended by the Law of the Republic of Kazakhstan dated 8 July, 2005 No. 72 (the order of enforcement see Art. 2), dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2), dated 5 May, 2006 No. 139 (the order of enforcement see Art. 2 of the Law of the Republic of Kazakhstan No. 139), dated 23.10.2008 No. 72 -IV (the order of enforcement see Art. 2); dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication).

Article 25. Formation of the authorized capital of an insurance (reinsurance) company

      1. Shares of an insurance (reinsurance) company in placing shall be paid exclusively in cash in national currency of the Republic of Kazakhstan, except in cases of payment of shares of an insurance (reinsurance) company during its reorganization, carried out in accordance with the Law of the Republic of Kazakhstan “On Joint Stock Companies”.

      2. Is excluded by the Law of the Republic of Kazakhstan dated 21.06.2013 No.106 -V (shall be enforced upon expiry of ten calendar days after its official publication).
      3. Is excluded by the Law of the Republic of Kazakhstan dated 23.12.2005 No. 107 (the order of enforcement see Art. 2 of the Law No.107).

      4. The minimum size of the authorized capital of the creating insurance (reinsurance) company shall be fully paid by its founders at the time of its registration.

      5. An insurance (reinsurance) company shall have the right to buy back its own shares from the shareholders, provided that the transaction shall not be violated the requirements of the legislation of the Republic of Kazakhstan relating to issues of financial stability and solvency of an insurance (reinsurance) company.

      5-1. The insurance (reinsurance) organization has the right to issue preferred shares which avenue of release provides the right of executive body of the insurance (reinsurance) organization not to charge preferred share dividends if charge of share dividends will give to decrease in prudential standards below of the values established by a regulatory legal act of authorized body.

      6. Is excluded by the Law of the Republic of Kazakhstan dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004).
      Footnote. Article 25, as amended by the Laws of the Republic of Kazakhstan dated 16.05.2003 No. 416, dated 08.07.2005 No. 72 (the order of enforcement see Art. 2), dated 23.12.2005 No. 107 (the order of enforcement see Art. 2 of the Law No. 107), dated 20.02.2006 No. 128 (the order of enforcement see Art. 2), dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication), dated 21.06.2013 No. 106-V (shall be enforced upon expiry of ten calendar days after its official publication); dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016).

Artcle 25-1. Subordinated debt

      Conditions of reference of the unsecured obligation to a subordinated debt is simultaneous availability of the following conditions:

      1) the term for which the unsecured obligation is released or received is not less than five years;

      2) creditors cannot impose requirement about repayment or execution of the unsecured obligation before five years from the moment of his emergence;

      3) the unsecured obligation can be ahead of schedule extinguished or performed at the initiative of the insurance (reinsurance) organization provided that this will not give to decrease in prudential standards below the values established by a regulatory legal act of authorized body;

      4) at liquidation of insurance company the unsecured obligation is satisfied in the ninth turn, and at liquidation of the reinsurance organization – in the seventh turn, determined by article 72 of this Law, to requirements of shareholders – owners of common shares.

      Footnote. Chapter 6 is added with article 25-1 according to the Law of the Republic of Kazakhstan dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016).

Article 26. An insurance holding company, a major participant of an insurance (reinsurance) company

      1. Nobody alone or jointly with the other (other) person (s) cannot, directly or indirectly, own, use, and (or) dispose of ten or more percent of outstanding (net of preferred and bought by the insurance (reinsurance) company shares of an insurance (reinsurance) company, as well as have the ability to exercise control or influence over the insurance (reinsurance) company solutions at the rate of ten percent or more percent of the outstanding (net of preferred and bought by the insurance (reinsurance) company shares of an insurance (reinsurance) company without the prior written consent of the authorized body. This requirement shall not apply to the state or national management holding company, as well as to the cases, provided by this Law.

      Non-resident legal entities of the Republic of Kazakhstan can obtain the consent of the authorized body to acquire the status of an insurance holding company or a major participant of an insurance (reinsurance) company in the presence of the minimum required rating of one of the rating agencies. The minimum required rating and the list of rating agencies shall be established by the regulatory legal act of the authorized body.

      The presence of this rating shall not be required for a non-resident legal entity of the Republic of Kazakhstan, intending indirectly own ten or more percent of outstanding shares of an insurance (reinsurance) company or voting indirectly by ten percent or more percent of the voting shares of an insurance (reinsurance) company through the ownership (voting) of shares (stakes in the authorized capital) of the non-resident legal entity of the Republic of Kazakhstan that is a major participant of an insurance (reinsurance) company that directly owns ten or more percent of outstanding shares of an insurance (reinsurance) company, or having the opportunity to vote by ten or more percent of the voting shares of an insurance (reinsurance) company that has the minimum required rating.

      An insurance holding company, a non-resident of the Republic of Kazakhstan that directly owns twenty-five or more percent of outstanding (net of preferred and bought by an insurance (reinsurance) company) shares of an insurance (reinsurance) company or having the opportunity to vote directly by twenty-five or more percent of the voting shares of an insurance (reinsurance) company may be only a financial institution – a non-resident of the Republic of Kazakhstan that subject to the consolidated supervision in the country of its location.

      2. The rules for issuing, withdrawing the consent to acquire the status of a major participant of an insurance (reinsurance) company or an insurance holding company, the requirements to the documents, submitted to obtain the consent shall be determined by the authorized body.

      2-1. For receiving consent to acquisition of the status of insurance holding or the large participant of the insurance (reinsurance) organization the fee which amount and a payment procedure are defined by tax laws of the Republic of Kazakhstan is paid.

      3. The requirements to acquire the status of an insurance holding company or a major participant of an insurance (reinsurance) company shall not apply to a person that recognized as indirectly owns (having the opportunity to vote, make decisions and (or) influence on the decision making by virtue of a contract or otherwise) of shares of an insurance (reinsurance) company through the ownership (the availability to vote, make decisions and (or) influence on decision making by virtue of a contract or otherwise) of shares of another financial institution having the status of a major participant (an insurance holding company) of the said insurance (reinsurance) company.

      The requirements to acquire the status of an insurance holding company or a major participant of insurance (reinsurance) company shall not apply to a non-resident of the Republic Kazakhstan that indirectly owns (having the ability to vote, make decisions and (or) influence on decision making by virtue of a contract or otherwise) of shares of an insurance (reinsurance) company through the ownership of (the availability to vote, make decisions and (or) influence on the decision making by virtue of a contract or otherwise) shares of another financial institution - a non-resident of the Republic of Kazakhstan, that is subject to the consolidated supervision in the country of its location and has the status of a major participant (an insurance holding company) of the said insurance (reinsurance) company.

      Granting the consent of the authorized body to acquire the status of an insurance holding company shall be carried out under the conditions and in the manner that specified for a major participant of an insurance (reinsurance) company.

      4. For receiving consent the person wishing to become the large participant of the insurance (reinsurance) organization is obliged to submit in authorized body the application for acquisition of the status of the large participant of the insurance (reinsurance) organization with application of documents and the data determined by points 6, 6-1, 7, 8, 9 and 10 of this article.

      5. Large participants of the insurance (reinsurance) organization – natural persons pay events of the insurance (reinsurance) organization in a size which is not exceeding property value, belonging to them on the property right. At the same time the property value (less early acquired shares of the insurance (reinsurance) organization) has to be not less aggregate value of earlier acquired and acquired shares of the insurance (reinsurance) organization.

      6. To obtain the consent to acquire the status of a major participant of an insurance (reinsurance) company, an individual shall submit the following documents:

      1) data on the conditions and manner for the acquisition of shares of an insurance (reinsurance) company, including the previously purchased, including a description of the sources and the funds, used for the acquisition of shares, with copies of supporting documents.

      The source used for the purchase of shares of an insurance (reinsurance) company shall be:

      Income, derived from entrepreneurial activity, labour or other gainful activity;

      duly documented monetary savings of an applicant.

      In addition to the sources, listed in the second part of this subparagraph, money, received as a gift, winnings, income from the sale of property received free, in an amount not exceeding twenty-five percent of the value of purchased shares of an insurance (reinsurance) company can be used for purchase of shares of an insurance (reinsurance) company.

      In purchasing the shares of an insurance (reinsurance) company at the expense of the property received as a gift, the applicant shall submit data on the grantor and the source of origin of such property from the grantor;

      1-1) the document confirming payment of collecting for consent issue;

      2) the power of attorney to the representative of the applicant that is entrusted with representing the interests of the applicant (if available);

      3) the list of entities to which it is a major participant, and the notarized copies of the constituent documents;

      4) a plan of recapitalization of an insurance (reinsurance) company in cases of possible deterioration of the financial situation of an insurance (reinsurance) company;

      5) data on the impeccable business reputation with copies of the supporting documents;

      Note of the RCLI!
      Subparagraph 6) is provided in the wording of the Law of the Republic of Kazakhstan dated 18.11.2015 № 412-V (shall be enforced from 01.01.2021).

      6) data on income and assets, as well as data on the existing debt for all the obligations of the applicant, according to the form prescribed by the regulatory legal act of the authorized body;

      7) short details of the applicant in the form, prescribed by the regulatory legal acts of the authorized body, including data about education, about the labour activity;

      8) a written confirmation of the relevant state body of the country of residence of individual - non-resident of the Republic of Kazakhstan that the purchase of shares of the insurance (reinsurance) company - resident of the Republic of Kazakhstan shall be permitted by the national legislation of this country or a statement of the authorized body of the relevant state that such a permit under the legislation of the state of the said founder is not required.

      6-1. If the natural person began to correspond to features of the large participant of the insurance (reinsurance) organization without receiving the prior written consent of authorized body on the basis of the gift agreement, at submission to them of the statement for acquisition of the corresponding status according to the requirement, stipulated in Item the 14th this article, are in addition represented:

      1) data on conditions and an order of donation of events of the insurance (reinsurance) organization with application of copies of supporting documents;

      2) the documents provided by subparagraphs 1-1), 2), 3), 4), 5), 6), 7) and 8) of point 6 of this article;

      3) data on share value, being subject of the agreement of donation, the Republic of Kazakhstan determined by the appraiser according to the legislation.

      For receiving consent to acquisition of the status of the large participant of the insurance (reinsurance) organization by in addition natural person which acquired shares of the insurance (reinsurance) organization as a result of the gift agreement the following conditions for date of submission of the statement for acquisition of the status of the large participant of the insurance (reinsurance) organization are satisfied:

      1) the property value (less the cost of earlier acquired shares of the insurance (reinsurance) organization), belonging to natural person, has to be not less aggregate value of the events which are the subject of the agreement of donation, and the shares of the insurance (reinsurance) organization which are earlier acquired by him;

      2) income gained from the business, labor or other paid activity of natural person and also his money savings documented make not less than seventy five percent from the cost of the presented stocks of the insurance (reinsurance) organization determined by the appraiser.

      7. To obtain the consent to acquire the status of a major participant of an insurance (reinsurance) company, a legal entity-resident of the Republic of Kazakhstan shall submit the following documents:

      1) copies of the decision of the relevant body of the applicant on acquisition of shares of the insurance (reinsurance) company;

      2) data and supporting documents about persons that own (alone or jointly with others) ten or more percent of the shares (stakes in the authorized capital) of the legal entity, as well as having the ability to influence the decisions of the legal entity by virtue of a contract or otherwise, or exercise control;

      3) a list of affiliated persons of the applicant;

      4) the data and documents specified in subparagraphs 1), 1-1), 2), 3) and 4) of point 6 of this article;

      5) data on the impeccable business reputation of its executives;

      6) notarized copies of the constituent documents, short details about the major participants of the applicant, as well as about the major participants in the major participants of the applicant;

      7) short details about the executives of the applicant in the form, prescribed by the regulatory legal acts of the authorized body, including data about education, about the labour activity;

      8) the annual financial statements for the last two completed financial years, certified by the audit firm, as well as the financial statements for the last full quarter before the submission of such application;

      9 ) an analysis of the financial implications of becoming a major participant, including the estimated balance of payments of the applicant, insurance (reinsurance) company after the acquisition, the plans and proposals of the applicant, if available, for the sale of the assets of the insurance (reinsurance) company, reorganization or making significant changes in the activity or management of the insurance (reinsurance) company, including the plan of activities and organizational structure.

      8. To obtain the consent to acquire the status of a major participant of an insurance (reinsurance) company, the non-resident legal entity of the Republic of Kazakhstan shall submit the following documents:

      1) the data and documents specified in subparagraphs 1), 1-1), 2), 3) and 4) of point 6 and subparagraphs 1), 2), 3), 5), 6), 7), 8) and 9) of point 7 of this article;

      2) data about the credit rating of the legal entity that is assigned by one of the international rating agencies, the list of which is established by the authorized body, except as provided for in paragraph 1 of this Article.

      To obtain the consent to acquire the status of a major participant of the insurance (reinsurance) company, a non-resident financial institution of the Republic of Kazakhstan, in addition to the documents specified in this paragraph shall provide a written confirmation from the financial supervisory body of the country of location of the applicant that the applicant is authorized to carry out the financial activities within the national legislation of this country, or a statement of the financial supervisory body of the country of location of the applicant that such authorization is not required under the legislation of that state.

      9. To obtain the consent to acquire the status of the insurance holding company, a financial institution – non-resident of the Republic of Kazakhstan shall submit the following documents:

      1) data and documents specified in paragraph 8 of this article;

      2) a written confirmation from the financial supervisory body of the country of location of the applicant that the financial institution - non-resident of the Republic of Kazakhstan shall be subject to the consolidated supervision;

      3) a written permission (consent) of the financial supervision body of the country of the location of the applicant to purchase by a financial institution - non-resident of the Republic of Kazakhstan of the status of an insurance holding company or a statement of the authorized body of the country that such permission (consent) is not required under the legislation of that state.

      9-1. The person wishing to become insurance holding in addition to the documents and data provided by points 7, 8, 9 and 10 of this article represents:

      1) the documents confirming availability of risk management systems and internal control including concerning the risks connected with activity of the affiliated organization;

      2) expected calculation of prudential standards of insurance group if acquisition by the applicant of the status of insurance holding will lead to forming of insurance group.

      10. Individuals, wishing to acquire the status of a major participant of an insurance (reinsurance) company with the ownership twenty-five or more percent (net of preferred and bought by an insurance (reinsurance) company) shares, as well as legal entities wishing to acquire the status of an insurance holding company, in addition to the documents and data specified in this article shall represent the business plan, the requirements for which are set by the authorized body for the next five years.

      11. As persons that are jointly a major participant in the insurance (reinsurance) companies shall be recognized the persons in total owning ten or more percent of outstanding (net of preferred and bought by the insurance (reinsurance) company) shares or having the power, directly or indirectly, to vote by ten or more percent of the shares of the insurance (reinsurance) company and:

      1 ) jointly affecting to the decisions of the insurance (reinsurance) company by virtue of an agreement between them or otherwise;

      2) being separately or mutually the major participants of each other;

      3) one of them shall be an officer or a representative of another person;

      4) one of them granted to another person the opportunity to purchase the shares of the insurance (reinsurance) company in accordance with the agreement between them;

      5) shall be close relatives or spouses;

      6) one of them gave the other person the opportunity to purchase the shares of the insurance (reinsurance) company at the expense of the donated to them money or property received free.

      In case if the insurance (reinsurance) company is a part of a banking conglomerate in accordance with the requirements of the banking legislation of the Republic of Kazakhstan, the insurance (reinsurance) company shall be subject to the consolidated supervision in accordance with the banking legislation of the Republic of Kazakhstan.

      12. The decision on the application, filed to acquire the status of an insurance holding company or a major participant of the insurance (reinsurance) company in accordance with the requirements of this article shall be taken by the authorized body within three months after the submission of the application.

      The authorized body shall notify the applicant on the results of their solutions, while in the case of refusal to grant the consent for purchase of the corresponding status the grounds for refusal shall be indicated in the written notice.

      The authorized body at consent issue to the person which is not bank holding or bank on acquisition of the status of insurance holding at the same time issues permission to considerable equity participation of the insurance (reinsurance) organization or creation (acquisition) of the affiliated insurance (reinsurance) organization.

      13. The authorized body has the right to withdraw consent issued according to this article, having made the decision on his cancellation within two months from the date of detection of the fact which is consent ground for revocation in case of detection of false information on the basis of which consent, or violations as a result of acquisition by the applicant of the status of the large participant or insurance holding of requirements of the legislation of the Republic of Kazakhstan in the field of protection of the competition, or non-compliance with the insurance (reinsurance) organization by large participants or insurance holding of requirements of this Law was issued. In this case the person to whom such measure is applied is obliged to reduce within six months the number of the stocks of the insurance (reinsurance) organization owned by it established by this article up to one level lower.

      14. If the person complies with characteristics of an insurance holding company, a major participant of the insurance (reinsurance) company without the prior written consent of the authorized body, he shall not have the right to take any action aimed at influencing the management or policies of the insurance (reinsurance) company, (or) vote on such shares until such time as he received the written consent from the authorized body in accordance with the provisions of this Article.

      In this case, the person corresponding to the characteristics of an insurance holding company, a major participant of insurance (reinsurance) companies shall notify the authorized body within ten calendar days from the time when he became aware that he meets the grounds of the insurance holding company, a major participant of the insurance (reinsurance) company.

      An application on acquisition of the corresponding status shall be submitted to the authorized body within thirty calendar days from the time when he became aware that he meets the grounds of the insurance holding company, a major participant of the insurance (reinsurance) company, unless the person is not going to dispose of the shares within the specified period. The data about the decision on the alienation of shares shall be submitted to the authorized body immediately from the date of the decision.

      In case of refusal in issue of consent by authorized body to the person corresponding to features signs of insurance holding, the large participant of the insurance (reinsurance) organization, the specified person is obliged within six months from the moment of obtaining the written notice to reduce the number of the stocks of the insurance (reinsurance) organization owned by him to level, below established by this article.

      14-1. When a person acquires signs of a major participant of an insurance (reinsurance) company or an insurance holding without the written consent of the authorized body, the authorized body shall have the right to apply to this person the supervisory response measures provided for by this Law, including the coercive measures provided for in Article 53-4 of this Law, in terms of the requirements for the sale of shares of an insurance (reinsurance) company within a period of not more than six months.

      15. Shareholders that in total own ten or more percent of outstanding (net of preferred and bought by the insurance (reinsurance) company) shares or the voting shares of the insurance (reinsurance) company and acting on the basis of agreement between them, providing for making decisions on the following issues shall not be the insurance holding companies, major participants in the insurance (reinsurance) companies:

      1) convening of an extraordinary general meeting of shareholders or appeal to the court to convene it in the case of refusal of the board of directors to convene a general meeting of shareholders;

      2) inclusion of additional issues on the agenda of a general meeting of shareholders;

      3) convening of a meeting of the board of directors;

      4) conduct of an audit of the insurance (reinsurance) company at their own expense.

      16. As persons that are together the insurance holding company, shall be recognized the persons in total owning twenty-five or more percent of outstanding (net of preferred and bought by the insurance (reinsurance) company) shares of the insurance (reinsurance) company or having the power, directly or indirectly, to vote by twenty-five or more percent of voting shares of the insurance ( reinsurance) and:

      1) jointly affecting to the decisions of the insurance (reinsurance) company by virtue of an agreement between them or otherwise;

      2) shall be separately or mutually the major participants of each other;

      3) one of them shall be a representative of another person;

      4) one of them granted to another person the opportunity to purchase the shares of the insurance (reinsurance) company in accordance with the contract between them.

      17. The authorized body shall have the right to request the data from individuals and legal entities in the presence of evidence, indicating that this person meets the characteristics of the insurance holding company or a major participant of the insurance (reinsurance) company. The data can be claimed from any person that has it, as well as from organizations under the control of that person.

      18. A major participant of an insurance (reinsurance) company, an insurance holding shall be obliged to notify the authorized body of the change in the percentage ratio of the number of shares of the insurance (reinsurance) company belonging to it to the number of shares of the insurance (reinsurance) company placed (minus preferred and purchased by the insurance (reinsurance) company) shares and (or) to the number of voting shares of the insurance (reinsurance) company, which it owns directly or indirectly or has the ability to vote directly or indirectly with submission of confirming documents, except when such a change occurs as a result of the purchase of its own shares by an insurance (reinsurance) company or insurance holding from other shareholders within thirty calendar days from the date of the decision.

      In case of change in the number of shares of the insurance (reinsurance) company (in percentage or absolute value) owned by a major participant of the insurance (reinsurance) company, the insurance holding, to the number of shares placed (minus preferred and purchased by the insurance (reinsurance) company) and (or) the number of voting shares of the insurance (reinsurance) company in the direction of increase, a major participant of the insurance (reinsurance) company, the insurance holding must submit to the authorized body the copies of documents confirming the source of funds, used to purchase shares of the insurance (reinsurance) company. Sources of funds used for the purchase of shares of the insurance (reinsurance) company by major participants of the insurance (reinsurance) company – individuals are determined in subparagraph 1) of paragraph 6 of this Article.

      In case of change in the percentage ratio of the number of shares of the insurance (reinsurance) company to the number of less than ten or twenty-five percent owned by a major participant of the insurance (reinsurance) company, the insurance holding, to the number of shares placed (less preferred and purchased by the insurance (reinsurance) company) and (or) to the number of voting shares of the insurance (reinsurance) company at the request of a major participant of the insurance (reinsurance) company, the previously issued written consent of the authorized body shall be deemed canceled from the date of receipt by the authorized body of the specified application.

      The large participant of the insurance (reinsurance) organization – natural person, in case of increase in number of the stocks owned by him to twenty five or more percent placed (less exclusive and redeemed by the insurance (reinsurance) organization) shares of the insurance (reinsurance) organization, in addition to documents and represents the business plan, requirements to which are established by authorized body, for the next five years, to the terms specified in this point.

      19. Is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

      20. Insurance (reinsurance) company shall notify the authorized body to change the composition of shareholders, owning ten or more percent of voting and (or) outstanding (net of preferred and bought by the insurance (reinsurance) company) shares of the insurance (reinsurance) company, within fifteen calendar days from the date of identification of this fact by it.

      21. Is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

      22. The consent of the authorized body for acquisition by the bank of the status of an insurance holding, a major participant of the insurance (reinsurance) company, the shares of which were purchased during the bank's reorganization in the form of accession in the manner prescribed by the legislation of the Republic of Kazakhstan, or transferred in implementation of the operation provided for in Articles 61-2 , 61-4, 61-11 and 61-12 of the Law of the Republic of Kazakhstan "On Banks and Banking Activities in the Republic of Kazakhstan", shall be deemed issued after registration of the operation in the system of registers of securities holders (nominal holding).

      Footnote. Article 26 is in the wording of the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication), as amended by the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 27.04.2015 No. 311-V (shall be enforced dated 01.01.2015); of 29.10.2015 No. 376-V (shall be enforced dated 01.01.2016); dated 24.11.2015 No. 422-V (an order of enforcement see Art. 2); dated 27.02.2017 No. 49-VI (shall be enforced after ten calendar days after day of its first official publication); dated 25.12.2017 No. 122-VI (shall be enforced dated 01.01.2018); dated 02.07.2018 № 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 № 168-VI (see Article 2).

Article 26-1. Grounds for refusal to grant the consent by the authorized body for persons wishing to become an insurance holding company or a major participant in the insurance (reinsurance) company

      Footnote. Title, as amended by the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

      1. The grounds for refusal to grant the consent by the authorized body for persons, wishing to become an insurance holding company or a major participant in the insurance (reinsurance) shall be:

      1) non-compliance of the submitted documents with the requirements, specified in Article 26 of this Law, or non-elimination of the comments of the authorized body on the submitted documents within the period established by it;

      2) non-compliance with requirements of subparagraphs 3), 4), 5) and 6) of point 3 of article 34 of this Law (concerning natural person or leading employees of the applicant - the legal entity);

      3) unstable financial situation of the applicant;

      3-1) ineffectiveness of the submitted plan for recapitalization of the insurance (reinsurance) company in the case of a possible deterioration in the financial condition of the insurance (reinsurance) company;

      3-2) in the absence of the applicant – individual, executive applicant - legal entity an impeccable business reputation;

      4) violation as a result of acquisition by the applicant of the status of the large participant of the insurance (reinsurance) organization or insurance holding of requirements of the legislation of the Republic of Kazakhstan in the field of protection of the competition;

      5) cases, when in the transaction to acquire the status of a major participant of an insurance (reinsurance) company or an insurance holding company, the acquirer party shall be a legal entity (its major participant (major shareholder) registered in offshore zones, the list of which is established by the authorized body;

      6) cases, when the applicant - financial institution shall not be subject to supervision on a consolidated basis in the host country;

      6-1) impossibility of the consolidated supervision of insurance group due to the fact that the legislation of the host countries of the participants of the insurance group - non-residents of the Republic of Kazakhstan makes it impossible to perform the requirements of this Law by them and the insurance group;

      7) non-compliance with other requirements established by the legislative acts of the Republic of Kazakhstan to the major participants of insurance (reinsurance) companies and insurance holding companies by the applicant;

      8) an analysis of the financial consequences of the acquisition of the status of a major participant of an insurance (reinsurance) company or an insurance holding company, involving the deterioration of the financial condition of the insurance (reinsurance) company by the applicant;

      9) the absence of the applicant - non-resident financial institution - of the Republic of Kazakhstan of powers for the financial activities within the legislation of the country of origin;

      10 ) the absence of the applicant – non-resident legal entity of the Republic of Kazakhstan the minimum required rating of one of the international rating agencies, the list of which is determined by the authorized body, except as provided by paragraph 1 of Article 26 of this Law;

      11) cases, when a person has previously been or is a major participant – an individual or the first head of a major participant of a legal entity of a financial organization and (or) a senior employee of a financial organization in the period not more than one year before the adoption by the authorized body of the decision to classify the bank as insolvent banks, conservation of the insurance (reinsurance) company, forced redemption of its shares, deprivation of the license of a financial organization, as well as the compulsory liquidation of a financial organization or its recognition as bankrupt in accordance with the legislative acts of the Republic of Kazakhstan. This requirement shall be applied within five years after the adoption by the authorized body of the decision to classify the bank as insolvent banks, conservation of the insurance (reinsurance) company, forced redemption of its shares, deprivation of the license of a financial organization, as well as the compulsory liquidation of a financial organization or its recognition as bankrupt in accordance with the legislative acts of the Republic of Kazakhstan;

      12) inconsistency of the legislation in the field of the consolidated supervision for the financial institutions of the country of location of the applicant - legal entity with the consolidated supervision requirements, established by the legislation of the Republic of Kazakhstan;

      13) for major participants - legal entities and insurance holding companies that are non -resident financial institutions of the Republic of Kazakhstan - the absence of agreement between the authorized body and the financial supervisory bodies of the state, the resident of which is the applicant that provided the exchange of information, with the exception of the cases stipulated by the regulatory legal act of the authorized body.

      2. A sign of unstable financial position of the applicant shall be the presence of one of the following conditions:

      1) a legal entity- applicant is created in less than two years prior to the date of application;

      2) the applicant’s obligations exceed its assets less the amount of assets, invested in stocks and shares in the authorized capital of other legal entities and intended to purchase the shares of an insurance (reinsurance) company;

      3) damages according to the results of each of the two completed financial years;

      4) the amount of obligations of the applicant poses a significant risk to the financial condition of an insurance (reinsurance) company;

      5) the existence of overdue and (or) related over the insurance (reinsurance) company debt of the applicant to the insurance (reinsurance) company;

      6) an analysis of the financial consequences of the acquisition by the applicant of the status of a major participant assumes the worsening of the financial condition of the applicant;

      6-1) the cost of the applicant's property (minus the applicant's obligations) is not sufficient for the purchase of shares of the insurance (reinsurance) company;

      7) other grounds, indicating the existence of unstable financial position of the applicant and (or) the possibility of damage to the insurance (reinsurance) company and (or) its customers.

      3. is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).
      Footnote. Section is supplemented by Article 26-1, in accordance with the Law of the Republic of Kazakhstan dated 23.12.2005 No. 107 (the order of enforcement see Art. 2 of the Law No. 107 ), as amended by the Laws of the Republic of Kazakhstan dated 19.02.2007 No. 230 (the order of enforcement see Art. 2), dated 07.05.2007 No. 244, dated 23.10.2008 No. 72-IV (the order of enforcement see Art. 2), dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 29.10.2015 No. 376-V (shall be enforced dated 01.01.2016); dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016); dated 02.07.2018 № 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 № 168-VI (see Article 2).

Article 27. Permission to create an insurance (reinsurance) company

      1. The following documents shall be submitted to the authorized body to obtain the permission to create an insurance (reinsurance) company:

      1) an application to obtain a permission to create an insurance (reinsurance) company;

      2) copies of constituent documents (charter, memorandum of association), notarized and executed in accordance with the legislation of the Republic of Kazakhstan;

      3) documents, proving the decision to create an insurance (reinsurance) company;

      4) data about the founders - legal entities (if any of the founders), including the certificates on the state registration (re-registration ) of legal entities, copies of the notarized constituent documents, the financial statements for the last two completed financial years that certified by an audit firm, balance sheet and statement of profit and loss account at the end of the last quarter before submission of the documents;

      5) data about the founders - individuals (if any of the founders), including a description of the sources and the amounts of money used to create an insurance (reinsurance) company, as well as certificate of no outstanding or unexpunged in the prescribed manner criminal records;

      6) the business plan, approved by the person, authorized by the founders for signing of documents certified by the actuary having the license for implementation of actuarial activity in the insurance market and developed for the next three years for the insurance (reinsurance) companies created in the sector "general insurance" and for five years for the insurance (reinsurance) companies created in the sector "life insurance". The business plan should reflect the following issues: the purpose of creating an insurance (reinsurance) company, a brief description of main directions of activity and the market segment to which the insurance (reinsurance) company is focused, information about the created insurance (reinsurance) company and its market share, types of products and services, methods of their implementation, marketing researches, insurance underwriting, pricing strategy, including the procedure for calculating insurance tariffs and their economic justification, product promotion strategy, distribution of insurance products, financial plan, including the forecast of loss ratios, investment policy and reinsurance policy, which the created insurance (reinsurance) company intends to conduct, organizational structure, the board of directors of the created insurance (reinsurance) company, the expected level of education of specialists, risk management organization meeting the requirements of the authorized body;

      6-1) (Is excluded - dated 23.10.2008 No. 72-IV (the order of enforcement see Art. 2).

      7) the notarized document, confirming the powers of the applicant to submit the application on behalf of the founders.

      1-1. In addition to the documents listed in paragraph 1 of this Article, a person that intends to purchase the shares of the insurance (reinsurance) company in an amount corresponding to the status of a major participant of an insurance (reinsurance) company or an insurance holding company shall submit the documents and data specified in Article 26 of this Law.

      2. The founder of an insurance (reinsurance) company that is a non-resident of the Republic of Kazakhstan, shall submit a document of the appropriate supervisory authority of the state, confirming that he is allowed to purchase the shares of the insurance (reinsurance) company - resident of the Republic of Kazakhstan, or a statement that under the legislation of the corresponding state, such permission is not required.

      The documents of the founder - non-resident of the Republic of Kazakhstan, issued by a foreign state body shall be legalized in the manner, prescribed by the legislation of the Republic of Kazakhstan.

      3. The procedure and conditions for granting the permission to create an insurance (reinsurance) company, as well as the requirements for the content of the documents, specified in sub-paragraphs 1), 4) – 6 of paragraph 1 of this Article, including the order for the calculation of insurance rates and their economic feasibility shall be determined by the regulatory legal acts of the authorized body.

      4. The permission for the creation of an insurance (reinsurance) company shall be valid for a period of six months from the date of issuance. The permission for the creation of an insurance (reinsurance) company may be prematurely withdrawn by the authorized body on the grounds provided for in this Law.

      5. The permission for the creation of an insurance (reinsurance) company shall be returned by the insurance (reinsurance) company to the authorized body in the issuance of the license to the insurance (reinsurance) company to engage in insurance activities.

      6. The application to grant the permission for the creation of an insurance (reinsurance) company shall be considered by the authorized body within three months from the date of submission by the applicant the last document, requested by the authorized body in accordance with paragraph 1 of this Article.

      7. The authorized body shall notify the applicant of its decision on the location specified by him (place of residence).

      Note of the RCLI!
      Article 27 is provided to supplement by paragraph 8 in accordance with the Law of the Republic of Kazakhstan dated 24.11.2015 № 422-V (shall be enforced from 16.12.2020).
      Footnote. Article 27, as amended by the Laws of the Republic of Kazakhstan dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004), dated 08.07.2005 No. 72 (the order of enforcement see Art. 2), dated 23.12.2005 No. 107 (the order of enforcement see Art. 2 of the Law No. 107), dated 23.10.2008 No. 72-IV (the order of enforcement see Art. 2), dated 11.07.2009 No. 185-IV (shall be enforced from 30.08.2009), dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), dated 24.12.2012 No. 60-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 28. Grounds for refusal to grant a permission for the creation of an insurance (reinsurance) company

      1. The grounds for refusal to grant a permission for the creation of an insurance (reinsurance) company shall be:

      1) non-compliance of the submitted documents with the requirements, specified in paragraphs 1, 2 and 3 of Article 27 of this Law, or non-elimination of the comments of the authorized body on the submitted documents within the period established by it;

      2) insufficiency of own funds of the founder to pay for the shares;

      3) provision of inaccurate information concerning the newly created organization and its founders to the authorized body;

      4) loss-making activities of the founder for the last two completed financial years;

      5) (Is excluded – by the Law of the Republic of Kazakhstan dated 23.10.2008 No. 72-IV (the order of enforcement see Art. 2).

      6) refusal for giving the consent by the authorized body on acquire of the status of a major participant of an insurance (reinsurance) company on the grounds specified in Article 26-1 of the Law;

      6-1) failure to comply with the restrictions, imposed by Article 26 of this Law;

      7) presence of unexpunged or outstanding conviction of the founders - individuals, the first head of the executive body or governing body of the founder – a legal entity.

      2. The authorized body within the time, specified in paragraph 6 of Article 27 of this Law shall notify the applicant on the refusal to grant the permission for the creation of an insurance (reinsurance) company in writing, including the grounds for refusal.

      Footnote. Article 28, as amended by the Laws of the Republic of Kazakhstan dated 23.12.2005 No. 107 (the order of enforcement see Article 2 of the Law No. 107), dated 23.10.2008 No. 72-IV (the order of enforcement see Art. 2), dated 15.07.2010 No. 338 -IV (the order of enforcement see Art. 2), dated 27.04.2012 No.15-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 29. Grounds for withdrawal of a permission for the creation of an insurance (reinsurance) company

      The authorized body shall withdraw a granted permission for the creation of an insurance (reinsurance) company in the following cases:

      1) detection of the inaccurate information on the basis of which it was issued;

      2) implementation of insurance and related to insurance activities by a legal entity, registered as an insurance (reinsurance) company prior to obtaining a license to engage in insurance activities;

      3) expiry of the permit issued by the authorized body for the creation of the insurance (reinsurance) company, during which it was not registered with the corporation or did not apply to the authorized body for a license to carry out insurance activities.

      Footnote. Article 29, as amended by the Law of the Republic of Kazakhstan dated 27.04.2012 No. 15-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.04.2019 No. 241-VI (shall be enforced from 01.07.2019).

Article 30. State registration of an insurance (reinsurance) company

      1. State registration of the insurance (reinsurance) company shall be carried out by the Corporation with the permission of the authorized body for its creation.

      2. The founders of the insurance (reinsurance) company shall be obliged to apply to the Corporation for its state registration no later than two months from the date of obtaining the permission of the authorized body for its creation.

      Footnote. Article 30, as amended by the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.04.2019 No. 241-VI (shall be enforced from 01.07.2019).

Article 31. Changes and additions to the constituent documents of the insurance (reinsurance) company

      After the state registration of changes and (or) additions made to the constituent documents requiring re-registration in the Corporation, the insurance (reinsurance) company within fourteen calendar days from the date of re-registration shall be obliged to submit a copy of the changes and (or) additions to the constituent documents to the authorized body.

      In case of making changes and (or) additions to the constituent documents that do not require re-registration, the insurance (reinsurance) company shall be obliged within fourteen calendar days from the date of the Corporation's mark on the acceptance of the letter of the insurance (reinsurance) company to submit to the authorized body a copy of the specified letter of the insurance (reinsurance) company, a copy of the changes and (or) additions to the constituent documents.

      Footnote. Article 31 in the wording of the Law of the Republic of Kazakhstan dated 02.04.2019 No. 241-VI (shall be enforced from 01.07.2019).

Article 31-1. Notification on the statement of financial products insurance (reinsurance) organization

      The insurance (reinsurance) organization notifies authorized body on the statement of financial products by the body of the insurance (reinsurance) organization authorized for the statement of financial products within ten working days from the date of their statement.

      The list of financial products on which statement the insurance (reinsurance) organization notifies authorized body, notification procedure of authorized body about the statement of financial products the insurance (reinsurance) organization and also the list of the documents attached to the notification are defined by regulatory legal acts of authorized body.

      Footnote. Chapter 6 is added by the with article 31-1 according to the Law of the Republic of Kazakhstan dated 16.05.2014 No. 203-V (shall be enforced after six months after day of its first official publication); in edition of the Law of the Republic of Kazakhstan dated 29.03.2016 No. 479-V (shall be enforced after twenty one calendar days after day of its first official publication).

Article 32. Subsidiaries of an insurance (reinsurance) company and insurance holding companies and a major participation of an insurance (reinsurance) company and insurance holding companies in the capital of organizations

      1. An insurance (reinsurance) company and an insurance holding company in order to exercise the powers authorized them by Article 48 of this Law, may create or have a subsidiary only with the prior permission of the authorized body.

      The requirement to obtain the permission of the authorized body for the creation or acquisition of a subsidiary shall not apply to insurance holding companies that indirectly own shares (having the opportunity to vote, make decisions and (or) influence on decisions, made by virtue of an agreement or otherwise) or stakes in the authorized capital of this organization through the ownership (the opportunity to vote, make decisions and (or) influence on decisions, made by virtue of an agreement or otherwise) of shares of the insurance (reinsurance) company - the resident of the Republic of Kazakhstan, that directly owns the shares (having the opportunity to vote, make decisions and (or) influence the decisions, made by virtue of an agreement or otherwise) or stakes in the authorized capital of this organization and having the appropriate permission of the authorized body.

      The procedure for granting the permission for the creation or acquisition of a subsidiary shall be defined by the regulatory legal act of the authorized body.

      Collecting which amount and a payment procedure are defined by tax laws of the Republic of Kazakhstan is paid for issue of permission to creation or acquisition of the affiliated organization.

      2. Subsidiaries of an insurance (reinsurance) company shall not have the right to create and (or) have subsidiaries, as well as to have a major participation in the capital of the organizations.

      3. Subsidiaries of insurance holding companies, except for subsidiary insurance (reinsurance) companies – the residents of the Republic of Kazakhstan, shall not have the right to create and (or) have subsidiaries.

      This requirement shall not apply to subsidiaries of the insurance holding companies that are bank holding companies. In this case, the requirements of the Law of the Republic of Kazakhstan “On Banks and Banking Activities in the Republic of Kazakhstan” shall apply to the specified persons.

      4. The application to obtain the permission to create, acquire the subsidiary shall attach the following documents:

      1) having been tired (in the presence) and the foundation agreement or the decision on organization of the affiliated organization – in case of her creation, the charter of the affiliated organization (in the presence) – in case of her acquisition;

      1-1) the document confirming payment of collecting for issue of permission;

      2) the decision of the body of an insurance (reinsurance) company and (or) an insurance holding company on the creation or acquisition of the subsidiary;

      3) data about executives of the subsidiary (or candidates, recommended for appointment or election to the post of executives);

      4) the organizational structure of the subsidiary and the data about affiliated persons.

      In case of absence of an insurance holding company of the insurance (reinsurance) company the data on the organizations, related to subsidiaries shall be additionally provided:

      management of their activities on a consolidated basis in accordance with the terms of memorandum or provisions of associations of such organizations;

      if the composition of the executive body, governing body (for joint stock companies), the supervisory board (for limited liability companies) of the said organizations in more than one-third represented by the same persons;

      5) data on the type or types of activities of the subsidiary with the submission of a business plan;

      6) data, on the basis of analysis of the legislation of the location of the subsidiary, on the absence of circumstances, suggesting the impossibility of the consolidated supervision of insurance group due to the fact that the legislation of the location of the participants of the insurance group - non-residents of the Republic of Kazakhstan makes it impossible to perform them and by the insurance group the requirements stipulated by the legislative acts of the Republic of Kazakhstan;

      7) data on the percentage and amount of participation of the insurance (reinsurance) company and (or) the insurance holding company in the authorized capital of the creating subsidiary, as well as the number of shares they buy and the amount of the advance payment of shares (stakes in the authorized capital);

      8) the report of the auditor firm and the financial statements of the acquired subsidiary, certified by the audit firm;

      9) excluded by the Law of the Republic of Kazakhstan dated 16.05.2014 No. 203-V (shall be enforced after six months after day of its first official publication);

      10) data on the amount of the authorized capital of the acquired subsidiary (if such information is not contained in the audit report), as well as on the stakes of the insurance (reinsurance) company and (or) the insurance holding company in the authorized capital or the number of shares of the acquired subsidiary, on the terms and order for acquisition of the subsidiary;

      11) data on the legal entity, by the purchase of stakes in the authorized capital or the shares of which the insurance (reinsurance) company and (or) the insurance holding company purchases a subsidiary, including:

      the name and address of the legal entity;

      data about the amount of the stakes of the insurance (reinsurance) company and (or) the insurance holding company in the authorized capital of the legal entity, its purchase price, the founder (participant) of which is the insurance (reinsurance) company and (or) the insurance holding company;

      data on the number of shares, the purchase price, their percentage to the total number of outstanding shares (net of the shares preferred and bought by the company) of a legal entity, a shareholder of which is the insurance (reinsurance) company and (or) the insurance holding company;

      data about the amount of the stakes of a legal entity (a founder, a participant, a shareholder of which is the insurance (reinsurance) company and (or) the insurance holding company), its purchase price in the authorized capital of the other legal entity;

      data about the number of shares, the purchase price, their percentage to the total number of outstanding shares (net of the shares preferred and bought by the company), purchased by a legal entity, a shareholder (a founder, a participant) of which is the insurance (reinsurance) company and (or) the insurance holding company.

      These requirements shall apply to cases of acquisition of a subsidiary by the insurance (reinsurance) company and (or) the insurance holding company through the purchase of stakes in the authorized capital or the shares of several legal entities;

      12) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

      13) analysis of the financial implications of the creation, acquisition of the subsidiary by the insurance (reinsurance) company and (or) the insurance holding company, including the expected balance of payments of the insurance (reinsurance) company and (or) the insurance holding company and the subsidiary after its creation or acquisition, as well as in the presence of plan and offer of the insurance (reinsurance) company and (or) the insurance holding company for the sale of assets of the subsidiary or making important changes in the management of the subsidiary;

      14) other documents on the basis of which it is supposed to acquire the control or confirming the control over the subsidiary, specifying the reasons of occurrence of the control.

      5. Insurance (reinsurance) company and (or) insurance holding company shall have the right to create a subsidiary subject to break-even activity on a consolidated and unconsolidated basis according to the results of each of the last two completed financial years and the compliance with the prudential standards, including on a consolidated basis, established by the authorized body during the last three months preceding the date of application for a permission to the authorized body.

      6. Grounds for refusal to grant the permission for the establishment, acquisition of a subsidiary shall be:

      1) non-compliance of the submitted documents with the requirements, specified in this Article, or non-elimination of comments of the authorized body on the submitted documents within the term established by it;

      2) non-compliance of the legislation on consolidated supervision over the financial institutions of the country of location of the established or acquired subsidiary with the requirements for the consolidated supervision established by legislative acts of the Republic of Kazakhstan;

      3) discrepancy of leading employees of the affiliated organization (or the candidates recommended for appointment or election to positions of leading employees) to requirements of subparagraphs 3), 4), 5) and 6) of point 3 of article 34 of this Law;

      4) failure to comply with the prudential standards of the insurance group that includes the insurance (reinsurance) company and (or) the insurance holding company, as a result of the alleged presence of the subsidiary of the insurance (reinsurance) company and (or) the insurance holding company;

      5) an analysis of the financial implications, suggesting deterioration in the financial condition of the insurance ( reinsurance), an insurance holding company or an insurance group as a result of the activities of the subsidiary or the planned insurance ( reinsurance) organization and ( or) the insurance holding company investments;

      6) non-compliance of risks management and internal control systems, including in relation to the risks related to the activities of the subsidiary, with the requirements of the authorized body to the risks management and internal control systems;

      7) failure to comply of the subsidiary with the established prudential standards in the cases, provided by the legislation of the country of location of the subsidiary, as well as by the insurance (reinsurance) company and (or) the insurance holding company of the prudential standards, including on the consolidated basis, and other mandatory standards and limits within the last three months preceding the date of application to the authorized body for the permission, and (or) during the consideration of the application;

      8) the presence at the insurance (reinsurance) company and (or) insurance holding, and (or) a subsidiary, proposed to acquisition of the existing measures of supervisory response and (or) administrative penalties for administrative offenses under Articles 227, 229, 230, part four of Article 239 of the Code of administrative offences on the date of application and during the consideration of documents;

      9) in case of creation or acquisition by the insurance (reinsurance) organization and (or) insurance holding of the affiliated organization – the insurance (reinsurance) organization, the bank managing an investment portfolio – residents of the Republic of Kazakhstan – non-compliance with the requirements provided by this Law, the legislation of the Republic of Kazakhstan on banks and banking activity and security market concerning issue of consent to obtaining the status of insurance or bank holding, the large participant of the insurance (reinsurance) organization, the bank managing an investment portfolio – residents of the Republic of Kazakhstan.

      7. The authorized body shall issue the permission or refuse to issue the permission within three months after the submission of the application.

      In case of refusal to issue the permission, the authorized body shall notify the applicant on the grounds for refusal.

      8. The subsidiary of the insurance (reinsurance) company and (or) the insurance holding company shall notify, within thirty calendar days the authorized body of any changes and amendments, made to the constituent documents.

      9. The subsidiary of the insurance (reinsurance) company and (or) the insurance holding company - a non-resident of the Republic of Kazakhstan, as well as the organization - a non-resident of the Republic of Kazakhstan, in which the insurance (reinsurance) company and (or) the insurance holding company has a major participation in the capital, shall disclose the necessary data to the authorized body on basis of the relevant request in order to ensure the quality and timely perform the functions imposed to the authorized body for the implementation of the consolidated supervision. In this case, the received data shall be confidential.

      10. In case of acquisition by the insurance (reinsurance) company and (or) insurance holding of the right of control over the subsidiary without obtaining the prior permission of the authorized body, the authorized body shall apply to the insurance (reinsurance) company or insurance holding the supervisory response measures provided for by this Law. In this case within six months after identification of the specified violation by authorized body, the insurance (reinsurance) company and (or) insurance holding shall be obliged to make alienation of the shares belonging to them (participation stakes in the charter capital) of the subsidiary to the persons who are not connected with them by special relations and to submit the confirming documents to the authorized body.

      11. A major participation of the insurance (reinsurance) company and (or) the insurance holding company in the capital of an organization shall be permitted only with the prior permission of the authorized body.

      The requirement to obtain the permission of the authorized body for a participation in the capital of an organization shall not apply to the insurance holding companies that indirectly own (having the opportunity to vote, make decisions and ( or) influence on the decisions, made by virtue of a contract or otherwise) shares or stakes in the authorized capital of this organization through the ownership of (the opportunity to vote, make decisions and (or) influence on the decisions, made by virtue of a contract or otherwise) shares of the insurance (reinsurance) company - the resident of the Republic of Kazakhstan that directly owns (having the opportunity to vote, make decisions and (or) to influence the decisions, made by virtue of a contract or otherwise) shares or stakes in the authorized capital of this organization and have the appropriate permission of the authorized body.

      Issuance of permission for major participation in the capital of organizations shall be carried out in the manner, specified by the regulatory legal act of the authorized body.

      Collecting the amount and a payment procedure are defined by tax laws of the Republic of Kazakhstan is paid for issue of permission to considerable equity participation of the organizations.

      In case of acquisition by the insurance (reinsurance) company and (or) insurance holding of significant participation in the capital of the organization without the prior consent of the authorized body, the authorized body shall apply to the insurance (reinsurance) company and (or) insurance holding supervisory response measures provided for by this Law. In this case, the insurance (reinsurance) company and (or) the insurance holding shall be obliged to make alienation of their shares (participation stakes in the charter capital) of the organization, in the capital of which they have a significant part to the persons, not connected with the insurance (reinsurance) company and (or) an insurance holding company by special relations, and to submit the confirming documents to the authorized body within six months.

      12. The application for obtaining permission to considerable equity participation of the organizations is submitted with application of documents, the provided subparagraphs 2), 3), 5), 6), 7), 10) and 11) of point 4 of this article and also the document confirming payment of collecting for issue of permission to considerable equity participation of the organizations.

      Refusal to issue the permission for a major participation in the capital of an organization shall be made on the grounds, provided in paragraph 6 of this Article.

      13. The authorized body shall withdraw the permission for the establishment, acquisition of the subsidiary, the major participation in the capital of an organization in the following cases:

      1) the identification of inaccurate data on the basis of which the permission was granted;

      2) the adoption of a decision by the bodies of the subsidiary of the insurance (reinsurance) company and (or) the insurance holding company, as well as the organizations in which the insurance (reinsurance) company and (or) the insurance holding company has a major participation in the capital, or by a court decision to terminate the activities of these organizations through the reorganization or liquidation;

      3) there is no evidence of control of the insurance (reinsurance) company and (or) the insurance holding company over the subsidiary;

      4) the disposal of the insurance (reinsurance) company and (or) the insurance holding company of the shares (stakes in the authorized capital) of the organization;

      5) identification of non-conformity of the activities of the subsidiary of the insurance (reinsurance) company and (or) the insurance holding company, as well as the organization in which the insurance (reinsurance) company and (or) the insurance holding company has a major participation, with the requirements of paragraph 3 of Article 48 of this Law.

      In case of withdrawal of the permission for the establishment, acquisition of the subsidiary, the major participation in the capital of the organization, the authorized body shall take the decision to cancel the previously issued permission within two months from the date of identification of the fact that is the basis to withdraw of the permission, or filing the application to withdraw by the insurance (reinsurance) company and (or) the insurance holding company.

      In case of revocation of a permit for creation, purchase of a subsidiary organization, a significant participation in the organization’s capital, the insurance (reinsurance) company and (or) the insurance holding shall be obliged, within six months to make alienation of their shares (participation stakes in the charter capital) in these organizations, to the persons not connected with the insurance (reinsurance) company and (or) an insurance holding by special relations, and to submit the confirming documents to the authorized body.

      The order for withdrawal of the permission for the establishment, acquisition of the subsidiary, the major participation in the capital of the organization shall be defined by the regulatory legal act of the authorized body.

      14. The requirements of this Article shall not apply to:

      1) non-residents of the Republic of Kazakhstan that are subsidiaries or affiliated organizations of non-residents of the Republic of Kazakhstan that are an insurance holding company, an entity with characteristics of an insurance holding company, as well as non-residents of the Republic of Kazakhstan that are an insurance holding company, an entity with characteristics of an insurance holding company, in the establishment or acquisition by them the subsidiaries and affiliated organizations – non-residents of the Republic of Kazakhstan when complying with one of the following conditions:

      the presence of an insurance holding company, having the characteristics of the insurance holding company of an individual credit rating not lower rated A of one of the rating agencies, the list of which is established by the authorized body, as well as a written confirmation from the financial supervisory authority of the country of origin of these persons that they are subject to the consolidated supervision;

      the presence of an agreement between the authorized body and the relevant supervisory body of a foreign state for the exchange of information, as well as the minimum required rating of one of the rating agencies. The minimum rating and the list of rating agencies shall be established by the regulatory legal act of the authorized body;

      2) the insurance holdings which are bank holdings or banks and having the corresponding permission of authorized body issued according to the Law of the Republic of Kazakhstan "About banks and banking activity in the Republic of Kazakhstan".

      15. If the insurance holding which is not bank holding or bank creates or purchases affiliated financial institution or purchases considerable equity participation of financial institution concerning which the legislation of the Republic of Kazakhstan provided obtaining the relevant allowing documents on equity participation, permission to creation or acquisition of the affiliated organization and (or) considerable equity participation of the organizations is issued by authorized body to insurance holding along with issue of the relevant document granting the right to own, use and dispose of shares of financial institution in the sizes established by the legislation of the Republic of Kazakhstan, without submission of the relevant documents provided by this article except for the document confirming payment of collecting for issue of permission.Requirements of part one of this point extend to the persons wishing to acquire the status of insurance holding.

      Footnote. Article 32 is in the wording of the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV (the order of enforcement see Art. 2), as amended by the Laws of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication), dated 24.12.2012 No. 60-V (shall be enforced upon expiry of ten calendar days after its first official publication), dated 26.12.2012 No. 61-V (shall be enforced from 04.02.2012 ), dated 21.06.2013 No. 106-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 16.05.2014 No. 203-V (shall be enforced after six months after day of its first official publication); dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication); dated24.11.2015 No. 422-V (shall be enforced dated 01.01.2016); dated 25.12.2017 No. 122-VI (shall be enforced dated 01.01.2018); dated 02.07.2018 № 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 № 168-VI (shall be enforced from 01.01.2009).

Article 33. Creation, closing of branches and representative offices of insurance (reinsurance) company and insurance broker

      1. Insurance (reinsurance) company-resident of the Republic of Kazakhstan on the basis of the decision of the board of directors of the insurance (reinsurance) company, insurance broker-resident of the Republic of Kazakhstan on the basis of the decision of the general meeting of participants or the general meeting of shareholders without the consent of the authorized body shall be entitled to open its separate units – branches and representative offices both in the territory of the Republic of Kazakhstan and abroad.

      2. Insurance (reinsurance) company, insurance broker within thirty working days from the date of registration of its branch and representative office in the Corporation shall be obliged to inform the authorized body about their opening with application of:

      1) copies of the regulations on branch or representative office;

      2) a notarized copy of the power of attorney issued to the first head of the branch or representative office.

      3. The branch of the insurance (reinsurance) company shall carry out insurance activities on behalf of the insurance (reinsurance) company and operate within the powers granted to it by the insurance (reinsurance) company.

      The branch of the insurance (reinsurance) company shall have a single balance sheet with the insurance (reinsurance) company, as well as the name that completely coincides with the name of the insurance (reinsurance) company.

      4. The branch of the insurance broker shall carry out its activities on behalf of the insurance broker and act within the powers granted to it by the insurance broker. The branch of the insurance broker shall have the same balance with the insurance broker, as well as the name that completely coincides with the name of the insurance broker.

      5. The representative office of the insurance (reinsurance) company shall act in the name of and on behalf of the insurance (reinsurance) company and shall not carry out insurance activities.

      6. The representative office of the insurance broker shall act in the name of and on behalf of the insurance broker and shall not carry out intermediary activities of the insurance broker for the conclusion of insurance (reinsurance) contracts.

      7. The obligatory conditions for opening of branches of the insurance (reinsurance) company, insurance brokers shall be the absence of effective sanctions, provided for by subparagraph 1) of paragraph 1 of Article 53-5 of this Law, as well as non-use by the authorized body within three months preceding the date of registration of branch in Corporation, of administrative penalties for administrative offenses provided for by part two of Article 227, Articles 229, 230, part four of Article 239 of the Code of the Republic of Kazakhstan on administrative offences.

      8. The insurance (reinsurance) company-resident of the Republic of Kazakhstan, the insurance broker-resident of the Republic of Kazakhstan shall have the right to open representative offices on condition of break-even activity of the insurance (reinsurance) company, the insurance broker following the results of the last completed financial year.

      9. When making changes and (or) additions to the regulations on the branch, representative office, requiring re-registration in the Corporation, insurance (reinsurance) company, insurance broker, who are residents of the Republic of Kazakhstan, shall be obliged, within thirty working days from the date of re-registration in the Corporation to submit to the authorized body a copy of the changes and (or) additions to the regulations on the branch, representative office.

      When making changes and (or) additions to the regulations on the branch, representative office, not requiring re-registration in the Corporation, the insurance (reinsurance) company, insurance broker shall be obliged, within thirty working days from the date of acceptance by the body authorized to receive notification about changes and (or) additions, documents of the insurance (reinsurance) company, insurance broker, to submit to the authorized body a document confirming their acceptance, copies of changes and (or) additions to the regulations on the branch, representative office.

      10. Insurance (reinsurance) organization-resident of the Republic of Kazakhstan, the insurance broker-resident of the Republic of Kazakhstan in case of opening of branches and representative offices outside the Republic of Kazakhstan shall be obliged, within thirty calendar days from the date of registration with the appropriate body of the state, in written form, to inform the authorized body about their opening with attachment of documents, confirming the registration in the appropriate body of the state.

      11. Insurance (reinsurance) company, insurance broker, being non-residents of the Republic of Kazakhstan, shall have the right to open a representative office without the consent of the authorized body.

      12. The representative office of the insurance (reinsurance company-non-resident of the Republic of Kazakhstan, insurance broker-non-resident of the Republic of Kazakhstan within thirty working days from the date of registration in the Corporation, must inform the authorized body in written form about the opening with the attachment of:

      1) copies of regulations on the representative office;

      2) a written confirmation of the insurance supervision body of the relevant state that the insurance (reinsurance) company-non-resident of the Republic of Kazakhstan has a valid license for insurance activities, or statements of the insurance supervision body that the issuance of a written confirmation is not provided for by the legislation of the country of origin of the insurance (reinsurance) company-non-resident of the Republic of Kazakhstan;

      3) a written confirmation of the insurance supervision body of the relevant state that the insurance broker-non-resident of the Republic of Kazakhstan has a valid license for the activities of the insurance broker, or electronic confirmation indicating the registration number if the activity of the insurance broker in the relevant state is not a licensed activity, or the statement of the insurance supervision body, that issue of written confirmation is not provided by the legislation of the country of origin of the insurance broker-non-resident of the Republic of Kazakhstan;

      4) a written notification of the insurance supervision body of the relevant state that it does not object to the opening of a representative office of the insurance (reinsurance) company-non-resident of the Republic of Kazakhstan, insurance broker-non-resident of the Republic of Kazakhstan in the territory of the Republic of Kazakhstan, or the statement of the insurance supervision body or authoritative legal service of the relevant state that such permission under the legislation of the state of the insurance (reinsurance) company-non-resident of the Republic of Kazakhstan, insurance broker-non-resident of the Republic of Kazakhstan is not required;

      5) a notarized power of attorney addressed to the head of the representative office of the insurance company-non-resident of the Republic of Kazakhstan, insurance broker-non-resident of the Republic of Kazakhstan.

      13. Opening of branches of insurance (reinsurance) companies-non-residents of the Republic of Kazakhstan in the Republic of Kazakhstan shall be prohibited, except for the cases provided by the legislative acts of the Republic of Kazakhstan.

      14. Representative office of insurance (reinsurance) company-non-resident of the Republic of Kazakhstan, insurance broker-non-resident of the Republic of Kazakhstan shall be obliged within thirty working days from the date of registration (re-registration) in the Corporation to inform the authorized body on changes and (or) additions to the provisions on representative office with attachment of copies of these documents.

      In case of making changes and (or) additions to the provision on representative office, which do not require re-registration, the representative office of the insurance (reinsurance) company-non-resident of the Republic of Kazakhstan, the insurance broker-non-resident of the Republic of Kazakhstan shall be obliged within thirty working days from the date of acceptance by the body authorized to receive notification about the changes and (or) additions, documents of the representative office of the insurance (reinsurance) organization-non-resident of the Republic of Kazakhstan, the insurance broker-non-resident of the Republic of Kazakhstan to submit to the authorized body the document, confirming their acceptance, notarized copies of changes and (or) additions to the provision on the branch, representative office.

      15. Insurance (reinsurance) company, insurance broker within thirty working days from the date of removal from the registration of its branch and (or) representative office in the Corporation (the relevant registering body of the state upon termination of the branch or representative office outside the Republic of Kazakhstan) must inform the authorized body in written form about the termination of their activities with a copy of the document of the Corporation (the relevant registering body of the state upon termination of the branch or representative office outside the Republic of Kazakhstan), confirming the withdrawal from the registration of the branch and (or) representative office of the insurance (reinsurance) company, insurance broker.

      16. The authorized body shall require the closure of the branch and (or) representative office of the insurance (reinsurance) company-resident of the Republic of Kazakhstan, insurance broker-resident of the Republic of Kazakhstan and representative office of the insurance (reinsurance) company-non-resident of the Republic of Kazakhstan, insurance broker-non-resident of the Republic of Kazakhstan in case of failure to comply with the requirements of paragraphs 7, 8, 12 and 14 of this Article.

      The authorized body shall apply to the insurance (reinsurance) company, insurance broker supervisory response measures in case of failure to comply with the requirements of paragraphs 2, 9, 10 and 15 of this Article.

      Footnote. Article 33 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-IV (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019); dated 02.04.2019 No. 241-VI (shall be enforced from 01.07.2019).

Article 34. Requirements imposed to leading employees of the insurance (reinsurance) organization, insurance holding and an insurance broker

      1. The heads and members of governing body, the head and members of executive body, the chief accountant and other heads of the insurance (reinsurance) organization who are exercising coordination and (or) control of activity of structural divisions of the insurance (reinsurance) organization and having right to sign of documents on the basis of which insurance and (or) investing activities, except for heads of branches and representative offices of the insurance (reinsurance) organization and their chief accountants are carried out are recognized as leading employees of the insurance (reinsurance) organization.

      The head and his deputies, the chief accountant are recognized as leading employees of an insurance broker.

      2. The insurance (reinsurance) organization, an insurance broker are obliged within hundred twenty calendar days upon termination of a financial year to represent to authorized body the reporting including data on the income paid by the insurance (reinsurance) organization, an insurance broker to all leading employees of the insurance (reinsurance) organization, an insurance broker within a financial year in the form established by a regulatory legal act of authorized body.

      Requirements to domestic policy of the insurance (reinsurance) organization, insurance broker are determined by compensation, charge of monetary rewards and also other types of a financial incentive of leading employees of the insurance (reinsurance) organization, an insurance broker by a regulatory legal act of authorized body.

      3. It cannot be appointed the person (is elected) the leading employee of the insurance (reinsurance) organization and an insurance broker:

      1) not having the higher education;

      2) not having the working life established by this article in international financial institutions which list is established by authorized body and (or) a working life in the field of providing and (or) regulation of financial services and (or) services in carrying out audit of financial institutions;

      3) not having a faultless goodwill;

      4) previously was the head, member of the management body, head, member of the executive body, chief accountant of a financial organization, a major participant – an individual, the head of a major participant(insurance holding) – a legal entity of a financial organization in the period not more than one year prior to adoption by the authorized body of the decision to classify the bank to the category of insolvent banks, on conservation of the insurance (reinsurance) company or compulsory redemption of its shares, deprivation of the license of a financial organization which entailed its liquidation and (or) termination of activity in the financial market, or entry into force of the court decision on compulsory liquidation of the financial organization or recognition it as bankrupt in the order established by the legislation of the Republic of Kazakhstan.

      This requirement shall be applied within five years after the adoption by the authorized body of the decision on classification of the bank as insolvent banks, on conservation of the insurance (reinsurance) company or forced redemption of its shares, deprivation of the license of a financial organization, which entailed to its liquidation and (or) termination of activities in the financial market, or entry into force of the court decision on compulsory liquidation of a financial organization or recognition it as bankrupt in the order established by the legislation of the Republic of Kazakhstan;

      5) at which consent to appointment (election) to leading employee position in given and (or) in other financial institution was withdrawn.

      The specified requirement is applied within the last twelve consecutive months after adoption by authorized body of the decision on a feedback of consent to appointment (election) to leading employee position.

      The leading employee of the insurance (reinsurance) organization it cannot be appointed also the person who committed a corruption crime or being attracted within three years before date of appointment (election) to disciplinary responsibility for commission of corruption offense (is elected);

      6) earlier being the head, the board member, the head, the board member, the chief accountant of financial institution, the large participant (major shareholder) – natural person, the head, the board member, the head, the member of executive body, the chief accountant of the large participant (major shareholder) – the legal person issuer who allowed a default on payment of coupon remuneration for issued issued securities within four and more consecutive periods or the outstanding amount of which on payment of coupon remuneration for issued issued securities on which the default was allowed makes quadruple and (or) more than a size of coupon remuneration, or the default size on payment of a principal debt for issued issued securities is the amount in ten thousand times exceeding the monthly settlement indicator established by the law on the republican budget on a payment date.

      The specified requirement is applied within five years from the moment of emergence of the circumstances provided by this subparagraph.

      4. The large participant of the insurance (reinsurance) organization cannot be appointed (is elected) to a position of the head of executive body of the insurance (reinsurance) organization.The number of members of executive body has to make not less than three people.

      5. Compliance to the requirement provided by the subparagraph 2) of point 3 of this article requires availability of a working life:

      1) for candidates for positions of the head or the member of the governing body which is the member of executive body of parent financial institution, the head of executive body, the chief accountant of the insurance (reinsurance) organization and the head of an insurance broker not less than three years;

      2) for candidates for positions of the head of governing body, members of executive body of the insurance (reinsurance) organization, the chief accountant and the deputy manager of an insurance broker not less than two years;

      3) for the candidates for positions of other heads of the insurance (reinsurance) organization who are exercising coordination and (or) control of activity of structural divisions of the insurance (reinsurance) organization and having right to sign of documents on the basis of which insurance and (or) investing activities, are carried out not less than one year.

      For candidates for positions of members of governing body and also the members of executive body supervising only safety issues of the insurance (reinsurance) organization, administrative questions, availability of the working life provided by the subparagraph 2) of point 3 of this article is not required.

      The working life determined by this point does not join the work in divisions of financial institution connected with implementation of business activities.

      For a member of the Government of the Republic of Kazakhstan, who is a candidate for the position of the head of the management body of an insurance company, more than fifty percent of outstanding shares of which are directly or indirectly owned by the state and (or) the national management holding, the experience provided for in this Article is not required.

      6. The managing employee shall have the right to perform the corresponding functions without coordination with the authorized body no more than sixty calendar days from the date of his (her) appointment (election, assignment with the corresponding functions) or from the date of purchase of shares of the insurance (reinsurance) company at receipt by legal entity of the status of an insurance holding.

      After the term specified in this point, and in cases of non-presentation of a complete document package approval in authorized body or refusal by authorized body in approval, the insurance (reinsurance) organization and an insurance broker are obliged to terminate the employment contract with this person or in case of lack of the employment contract to take measures for the termination of powers of this leading employee.Fulfillment of duties (substitution temporarily absent) the leading employee of the insurance (reinsurance) organization and an insurance broker without approval of authorized body over the term established by this point is forbidden.

      The authorized body considers the documents submitted for issue of consent to appointment (election) of leading employees of the insurance (reinsurance) organization, an insurance broker within thirty working days from the date of representation of a complete document package according to requirements of a regulatory legal act of authorized body.

      7. The procedure for issuing the consent of the authorized body for the appointment (election) of a senior employee of an insurance (reinsurance) company and an insurance broker, including the criteria for the absence of an impeccable business reputation, the documents necessary for obtaining consent, shall be established by regulatory legal acts of the authorized body.

      For issue of consent to appointment (election) of the leading employee of the insurance (reinsurance) organization, insurance holding and an insurance broker collecting which amount and a payment procedure are defined by tax laws of the Republic of Kazakhstan is levied.

      8. The authorized body refuses issue of consent to appointment (election) of leading employees of the insurance (reinsurance) organization and an insurance broker on the following bases:

      1) discrepancy of leading employees to requirements, the stipulated in Clause 16-2 presents of the Law, this article, subparagraph 20) of article 1, point 4 of article 54, point 2 of article 59 of the Law of the Republic of Kazakhstan "About joint-stock companies" and article 9 of the Law of the Republic of Kazakhstan "About financial accounting and the financial reporting";

      2) negative result of testing. Negative result of testing are:the result of testing of the candidate is less than seventy percent of the correct answers;violation by the candidate or translator (if this translator was provided by the candidate) an order of the testing established by authorized body;absence for testing in due time before the expiration of approval of the candidate by authorized body;

      3) not elimination by the insurance (reinsurance) organization, insurance holding, an insurance broker of notes of authorized body or representation by the insurance (reinsurance) organization, insurance holding, an insurance broker of the documents finished taking into account notes of authorized body after stipulated in Item the 6th this article of term of consideration of documents by authorized body;

      4) submission of documents after stipulated in Item the 6th this article of term during which the leading employee holds the position without approval of authorized body;

      5) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).
      6) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

      7) presence at authorized body of data (facts) that the candidate was the party of the transaction recognized as made for the purpose of manipulation in security market and (or) entailed damnification to the third party (third parties).

      This requirement is applied within one year from the date of approach of the earliest of the listed events:recognitions by authorized body of the bargain concluded in organized and (or) unorganized security markets as made for the purpose of manipulation;

      receiving by authorized body the facts confirming causing as a result of commission of this transaction of damage to the third party (third parties);

      8) presence at authorized body of data that the candidate was the worker of financial institution to which the authorized body applied sanctions and (or) limited corrective actions for the conclusion of the transaction recognized as made for the purpose of manipulation in security market and (or) the worker of financial institution whose actions entailed damnification of financial institution and (or) to the third party (third parties) participating in the transaction.

      This requirement is applied within one year from the date of approach of the earliest of the listed events:

      recognitions by authorized body of the bargain concluded in organized and (or) unorganized security markets as made for the purpose of manipulation;

      receiving by authorized body the facts confirming causing as a result of commission of this transaction of damage of financial institution and (or) to the third party (third parties).

      For the purposes of this subparagraph the worker of financial institution is understood as the leading employee or the person fulfilling his duties and (or) the trader of stock exchange which competence included decision making on questions, caused the above-stated violations.

      9. In case of termination of the employment contract with the managing employee of the insurance (reinsurance) company, insurance broker, or termination of his (her) powers, or transfer to another position in this insurance (reinsurance) company, in this insurance broker in connection with refusal of the authorized body to issue consent to his (her) appointment (election) or failure to submit to the authorized body of documents for approval within the period provided for in paragraph 6 of this Article, this person may be re-appointed (elected) to the position of a senior employee of this insurance (reinsurance) company, this insurance broker not earlier than ninety calendar days after the receipt of refusal to issue the consent to his (her) appointment (election) or termination of employment contract with him (her), or termination of powers, or transfer to another position, but not more than twice within twelve consecutive months.

      The insurance (reinsurance) company and the insurance broker shall be obliged to notify the authorized body within ten working days from the date of the decision of the relevant body of the insurance (reinsurance) company, the insurance broker about all changes that have occurred in the composition of executives, including their appointment (election), transfer to another position, termination of the employment contract and (or) termination of powers, on bringing the executive employee to disciplinary responsibility for committing corruption offences, as well as changes in the surname, name, patronymic name (if it is specified in the document proving the identity) of the managing worker with attachment of copies of the confirming documents.

      In case of bringing of the managing worker to criminal liability, the insurance (reinsurance) company and the insurance broker shall notify the authorized body within ten working days from the date when this information became known to the insurance (reinsurance) company and the insurance broker.

      10. In case of two consecutive refusals of authorized body in issue of consent to appointment (election) to leading employee position of the insurance (reinsurance) organization, an insurance broker this person can be designated (is elected) the leading employee of the insurance (reinsurance) organization, an insurance broker after twelve consecutive months from the date of adoption by authorized body of the decision on the second refusal in issue of consent to his appointment (election) in this insurance (reinsurance) organization, an insurance broker.

      11. The authorized body has the right to withdraw the issued consent to appointment (election) to leading employee position of the insurance (reinsurance) organization, an insurance broker on the following bases:

      1) detection of false information on the basis of which consent was issued;

      2) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

      3) application by the authorized body of the supervisory response measure specified in subparagraph 11) of paragraph 1 of Article 53-3 of this Law;

      4) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

      5) availability of not removed or unspent conviction.

      The feedback authorized body of consent to appointment (election) of the leading employee in the insurance (reinsurance) organization, an insurance broker is a ground for revocation earlier issued (issued) consent (soglasiya) to this leading employee in other financial institutions.

      In case of a feedback authorized body of consent to appointment (election) to leading employee position of the insurance (reinsurance) organization, an insurance broker the insurance (reinsurance) organization, an insurance broker are obliged to terminate the employment contract with this person or in case of lack of the employment contract to take measures for the termination of powers of this leading employee.

      12. In case of adoption by authorized body of the decision on forced redemption of stocks of the insurance (reinsurance) organization in the order established by this Law, the insurance (reinsurance) organization is obliged to terminate the employment contract with leading employees, being heads of governing body, the head of executive body both its deputies and the chief accountant or in case of lack of the employment contract to take measures for the termination of powers of this leading employee.

      13. Requirements of the subparagraph 4) of point 3 and point 12 of this article do not extend to the insurance (reinsurance) organizations which more than fifty percent of placed shares belong to the state and (or) national managing holding.

      14. The head and members of governing bodies, executive body, the chief accountant, other heads of insurance holding exercising coordination and (or) control of activity affiliated (affiliated) the organizations (organizations) and (or) the organization (organizations) in which, (which) the insurance holding has considerable equity participation are recognized as leading employees of insurance holding.

      15. Requirements of this article extend on leading employees of insurance holdings, behind an exception:

      1) leading employees of insurance nonresident holding of the Republic of Kazakhstan, at accomplishment of one of the following conditions:

      presence at insurance holding of individual credit rating not lower tha rate A wich is one of rating agencies which list is established by authorized body and also the written confirmation from body of financial supervision of a country of source of insurance holding that he is subject to the consolidated supervision;

      availability of the agreement between authorized body and the relevant supervisory authority of a foreign state about exchange of information and also the minimum required rating of one of rating agencies. The minimum rating and the list of rating agencies are established by a regulatory legal act of authorized body;

      2) the leading employees which received the consent of authorized body to appointment (election) of the leading employee according to the Law of the Republic of Kazakhstan "About banks and banking activity in the Republic of Kazakhstan", the insurance holdings which are the bank holdings which are a part of banking conglomerates.

      Footnote. Article 34 in edition of the Law of the Republic of Kazakhstan dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016); with the change made by the Law of the Republic of Kazakhstan dated 25.12.2017 No. 122-VI (shall be enforced dated 01.01.2018); dated 02.07.2018 № 168-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 03.04.2019 № 243-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 35. Additional requirements for insurance (reinsurance) company with the participation of non-resident of the Republic of Kazakhstan

      1. Is excluded by the Law of the Republic of Kazakhstan dated 20.02.2006 No. 128 (the order of enforcement see Art. 2).

      2. Insurance (reinsurance) company with the participation of non-residents of the Republic of Kazakhstan shall be the insurance (reinsurance) company, more than twenty-five percent of voting shares (net of preferred) of which in the aggregate shall be owned or managed by:

      1) non-resident of the Republic of Kazakhstan;

      2) legal entity - resident of the Republic of Kazakhstan, more than fifty percent of the stakes in the authorized capital or the outstanding shares of which are owned and (or) managed by non-residents of the Republic of Kazakhstan;

      3) residents of the Republic of Kazakhstan that are nominee holders of the securities of non-residents of the Republic of Kazakhstan.

      Footnote. Article 35, as amended by the Laws of the Republic of Kazakhstan dated 08.07.2005 No. 72 (the order of enforcement see Art. 2), dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2).

Article 36. Insurance broker

      Footnote. Article 36 is excluded by the Law of the Republic of Kazakhstan dated 20.02.2006 No. 128 (the order of enforcement see Art. 2).

Chapter 6-1. Features of creation and activity of Islamic insurance (reinsurance) organizations

      Footnote. The law is added with chapter 6-1 according to the Law of the Republic of Kazakhstan dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of itsfirst official publication).

Article 36-1. Principles of Islamic insurance

      The principles of Islamic insurance are:

      1) mutual protection and cross liability of insurers;

      2) prohibition on income generation from investment or providing the loans expressed as a percentage, provided by subparagraphs 1) and 2) of point 2 of article 11 of this Law;

      3) prohibition on insurance (reinsurance) or financing of the activity connected with production and (or) trade in tobacco, alcoholic products, weapon and ammunition, a gaming and also other types of business activity, insurance (reinsurance) or financing of which is forbidden by council for the principles of Islamic financing.

Article 36-2. Islamic insurance fund

      1. The Islamic insurance fund forms the Islamic insurance (reinsurance) organization at the expense of insurance premiums under agreements of Islamic insurance and also other income gained as a result of their investment, for the purpose of implementation of insurance payments under agreements of Islamic insurance.

      Rules of forming, accounting, use and distribution of Islamic insurance fund are established by a regulatory legal act of authorized body.

      2. The Islamic insurance (reinsurance) organization exercises control of Islamic insurance fund.

      3. The Islamic insurance (reinsurance) organization invests means of Islamic insurance fund in assets which list is established by council for the principles of Islamic financing, for the benefit of insurers.

      4. The Islamic insurance (reinsurance) organization does not bear liability for damages, the asset costs connected with reduction in which investments of Islamic insurance fund were made, except as specified, when such losses arose through her fault.

      5. The Islamic insurance (reinsurance) organization keeps separate account of own means from means of Islamic insurance fund.

      6. In case of insufficiency of means of Islamic insurance fund for obligation fulfillment for agreements of Islamic insurance the Islamic insurance (reinsurance) organization is obliged to contribute to Islamic insurance fund money with a condition of their return in the future at the expense of cash receipts in Islamic insurance fund. The Islamic insurance (reinsurance) organization has no right to levy remuneration for transfer of such money.

      Rules of transfer of money by the Islamic insurance (reinsurance) organization to Islamic insurance fund are established by a regulatory legal act of authorized body.

      7. Distribution of means of Islamic insurance fund between insurers is performed in proportion to a share of each insurer in Islamic insurance fund.

Article 36-3. Reward of the Islamic insurance (reinsurance) organization

      The Islamic insurance (reinsurance) organization has the right to earn reward for management of Islamic insurance fund in the form of a part of an insurance premium at signing of the contract of Islamic insurance (reinsurance) and (or) a part of income gained from investment of means of Islamic insurance fund in the order determined by a regulatory legal act of authorized body.

Article 36-4. Activity of council for the principles of Islamic financing

      1. For determination of compliance of activity, transactions and transactions to the principles of Islamic insurance specified in article 36-1 of this Law in the Islamic insurance (reinsurance) organization council for the principles of Islamic financing without fail is created.

      2. Council for the principles of Islamic financing is the independent body appointed by general meeting of shareholders of the Islamic insurance (reinsurance) organization according to the recommendation of Board of Directors.

Article 36-5. Requirements to activity of the Islamic insurance (reinsurance) organization

      1. The Islamic insurance (reinsurance) organization has no right to levy remuneration or to gain other income for management of Islamic insurance fund in any kind, in addition to the remuneration specified in article 36-3 of this Law.

      2. By the charter of the Islamic insurance (reinsurance) organization the right of determination of other requirements to activity of the Islamic insurance (reinsurance) organization obligatory for her observance can be granted to council for the principles of Islamic financing.

Article 36-6. Effects of recognition of the agreement of Islamic insurance not corresponding principles of Islamic insurance

      1. In case of recognition by council for the principles of Islamic financing of the agreement of the Islamic insurance which is at a conclusion stage, not to the corresponding principles of Islamic insurance specified in article 36-1 of this Law, such agreement cannot be signed and performed.

      2. In case of recognition by council for the principles of Islamic financing of the prisoner, but not performed or partially performed agreement of Islamic insurance not to the corresponding principles of Islamic insurance specified in article 36-1 of this Law, such agreement upon the demand of the Islamic insurance (reinsurance) organization ahead of schedule stops in the order established by the civil legislation of the Republic of Kazakhstan.

      3. In case of recognition by council for the principles of Islamic financing of the performed or partially performed agreement of Islamic insurance not to the corresponding principles of Islamic insurance specified in article 36-1 of this Law, income of the Islamic insurance (reinsurance) organization under such agreement has to be directed to charity.

Article 36-7. Additional requirements to the charter of the Islamic insurance (reinsurance) organization

      The charter of the Islamic insurance (reinsurance) organization, in addition to the data provided by legal acts of the Republic of Kazakhstan has to contain:

      1) purposes of activity of the Islamic insurance (reinsurance) organization;

      2) tasks, functions and powers of permanent body of the Islamic insurance (reinsurance) organization – council for the principles of Islamic financing and also an order of his creation and the requirement to members of council by the principles of Islamic financing;

      3) the conditions and an order of receiving remuneration for management of Islamic insurance fund approved by council for the principles of Islamic financing.

Chapter 7. Licensing

Article 37. Licensing of insurance (reinsurance) company and insurance broker

      1. The applicant shall submit the following documents to the authorized body to obtain a license to engage in insurance activities:

      1) an application for a license within the classes of insurance, specified in the business plan that submitted in receiving the permission for establishment of an insurance company or to engage in activities of reinsurance;

      1-1) documents, showing the performance of all organizational and technical measures, including of accounting and automation of accounting, that complying with the relevant requirements of the regulatory legal acts of the authorized body;

      2) a document, confirming the payment of license fee to the budget;

      3) excluded by the Law of the Republic of Kazakhstan dated 16.05.2014 No. 203-V (shall be enforced after six months after day of its first official publication);
      4) excluded by the Law of the Republic of Kazakhstan dated 16.05.2014 No. 203-V (shall be enforced after six months after day of its first official publication);

      5) a notarized copy of the charter with all amendments and supplements to it (if any);

      5-1) documents of the persons that proposed to the positions of executives of insurance (reinsurance) company, in accordance with the requirements of Article 34 of this Law;

      6) copies of documents, confirming the payment of the authorized capital, the minimum size of which is set by the regulatory legal act of the authorized body;

      7) internal rules for carrying out the insurance activities;

      8) report on the implemented organizational measures in accordance with the business plan, submitted in receiving the permission to open the insurance (reinsurance) company;

      9) data on the presence of actuary in the staff of the applicant;

      10) provisions on the internal audit service;

      11) notarially attested copy of the agreement of participation in the organization guaranteeing implementation of insurance payments to the insurers (insured to beneficiaries) at involuntary liquidation of insurance company according to insurance contracts if obligatory participation of insurance company in such organization is established by legal acts of the Republic of Kazakhstan on obligatory types of insurance;

      11-1) excluded by the Law of the Republic of Kazakhstan dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication);

      12) documents, confirming the participation in the database in accordance with the requirements of this Law and the legislative acts of the Republic of Kazakhstan on compulsory types of insurance;

      13) a document, confirming the existence of a major participant – an individual or an insurance holding company (to obtain a license to engage in compulsory types of insurance), except in cases, where more than fifty percent of the outstanding shares of the insurance (reinsurance) company directly or indirectly owned or transferred in trust administration to the state or the national management holding company.

      The requirements, set out in this paragraph shall not apply to the existing insurance (reinsurance) companies, with the exception of subparagraph 13) of this paragraph.

      2. To obtain a license for the right to carry out insurance activities for additional classes of insurance, the insurance company shall ensure the availability of risks management and internal control systems meeting the requirements of the authorized body, and also shall submit the following documents to the authorized body:

      1) an application;

      2) a business plan for the class (classes) of insurance that signed by an actuary;

      3) notarially attested copy of the agreement of participation in the organization guaranteeing implementation of insurance payments to the insurers (insured to beneficiaries) at involuntary liquidation of insurance companies if obligatory participation of insurance company in such organization is established by legal acts of the Republic of Kazakhstan on obligatory types of insurance;

      3-1) iexcluded by the Law of the Republic of Kazakhstan dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication);

      4) a copy of the payment document, confirming the payment of the license fee;

      5) a document, confirming the existence of a major participant – an individual or an insurance holding company (to get a license to engage in compulsory types of insurance ), except in cases, where more than fifty percent of the outstanding shares of an insurance (reinsurance) company directly or indirectly owned or transferred in trust administration of the state or the national management holding company;

      6) documents, confirming participation in the database in accordance with the requirements of this Law and the legislative acts of the Republic of Kazakhstan on compulsory types of insurance;

      7) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

      3. The business plan for the class of insurance shall contain the following information:

      1) the main features:

      covered risks by insurance class;

      share of the class of insurance in the structure of the insurance portfolio;

      segment of the market for providing the services for the insurance class (market size, potential policyholders, the geographical area);

      ways to implement the insurance products within the class of insurance;

      2) the requirements for the procedures of calculation of insurance rates and their economic feasibility;

      3) the forecast for the next two years on profits, losses, calculation of insurance reserves for given class of insurance, losses forecast, risk assessment in the worst and best situations, the forecast of compliance with prudential standards;

      4) the policy of reinsurance (reinsurance forms and methods, assessment criteria of reinsurance companies);

      5) the investment policy.

      4. Insurance company shall not have the right to apply to the authorized body for a license to engage in insurance activities on additional classes of insurance before the expiration of the period of performance the conditions, specified in the business plan for obtaining the permission to establish an insurance company.

      The requirement of this paragraph shall not apply in the cases of adoption of the legislative acts of the Republic of Kazakhstan providing for:

      1) the introduction of new classes and types of insurance;

      2) changing the order and conditions of the insurance activities for the individual classes and types of insurance.

      5. The license shall be subject to reissuance in case of exclusion from the license of certain classes of insurance and (or) types of activity with the exception of these classes of insurance and (or) types of activity, as well as in cases stipulated by the legislation of the Republic of Kazakhstan on permits and notifications, except for changes in the location of the licensee.

      5-1. Exclusion from the license of certain classes of insurance and (or) types of activity shall entail a ban on conclusion of new insurance (reinsurance) contracts for these classes of insurance and (or) types of activity, including the extension of existing insurance (reinsurance) contracts and their change, providing for an increase in insurance premiums, the amount of liability of the insurance (reinsurance) company.

      According to the concluded insurance (reinsurance) contracts according to the insurance policy, the insurance (reinsurance) company is obliged to fulfill its obligations either with the consent of the insurer or with the aim of transferring the insurance portfolio and (or) terminating the insurance contracts with the policyholders.

      6. To exclude the individual classes of insurance from the license to engage in insurance activities, the insurance company shall submit the following documents to the authorized body:

      1) an application;

      2) a copy of the payment document, confirming payment of the license fee;

      3) documents, confirming the transfer of the insurance portfolio in the manner, provided by Article 37-1 of this Law.

      7. To obtain a license to engage in reinsurance activity, a licensee shall submit the following documents to the authorized body:

      1) an application;

      2) a business plan for the implementation of reinsurance activity for the next two years, signed by an actuary that is licensed to operate as an actuary in the insurance market;

      3) internal rules of the insurance company, revealing the procedure for the acceptance of insurance risks to reinsurance;

      4) a copy of the payment document, confirming the payment of the license fee.

      7-1. The license for the right of implementation of Islamic insurance (reinsurance) activity is granted by authorized body only of the Islamic insurance (reinsurance) organization.

      8. To obtain a license to engage in the activities of an insurance broker, an applicant shall submit the following documents to the authorized body:

      1) an application;

      2) excluded by the Law of the Republic of Kazakhstan dated 16.05.2014 No. 203-V (shall be enforced after six months after day of its first official publication);

      3) a notarized copy of the charter that passed the state registration;

      4) documents, confirming full payment of the authorized capital;

      5) documents for approval of executives of the insurance broker, in accordance with the requirements of Article 34 of this Law;

      6) internal rules of operating, providing for the procedure of mediation on the conclusion of contracts of insurance and reinsurance;

      7) procedure for documentation and terms of customer service;

      8) a copy of the payment document, confirming the payment of the license fee;

      9) a state registration document, a written notice of the authorized body (for financial institutions - supervisors) of the corresponding state that the founder - a non-resident legal entity of the Republic of Kazakhstan shall be allowed to participate in the authorized capital of the insurance broker - resident of the Republic of Kazakhstan, or a statement that under the legislation of the corresponding state, such approval is not required;

      10) a document of the authorized body of the corresponding state, indicating the absence of the founder – an individual non-resident of the Republic of Kazakhstan of the conviction for economic and corruption crimes and offences, work as an executive of the insurance (reinsurance) company, insurance broker or other financial institution in a period not exceeding one year from the date of withdrawal of the license in accordance with legislation, the decision on the compulsory liquidation, forced redemption of shares of the insurance (reinsurance) company, insurance broker.

      The above requirement shall apply within five years after the withdrawal of the license, the date of the decision on the compulsory liquidation, forced redemption of shares of the insurance (reinsurance) company, insurance broker.

      9. For the issue (renewal) of the license, the license fee is charged, the amount and method of payment shall be determined by the legislation of the Republic of Kazakhstan.

      10. The license application shall be considered by the authorized body within thirty days from the date of submission of a complete set of documents, corresponding to the requirements of the legislation of the Republic of Kazakhstan.

      11. Information on licensing is published in periodic printing editions of authorized body, an Internet resource of authorized body in the state and Russian languages.

      12. The procedure and conditions for issuing a license to engage in insurance (reinsurance) activities and activities of an insurance broker, as well as the requirements for the content of the documents, specified in paragraphs 1 - 3, 6 - 8 of this Article, including the order for calculation of insurance rates and their economic feasibility shall be established by the regulatory legal acts of the authorized body.

      Footnote. Article 37, as amended by the Laws of the Republic of Kazakhstan dated 12.01.2007 No. 222 (shall be enforced upon expiry of 6 months from the date of its official publication), dated 07.05.2007 No. 244, dated 23.10.2008 No. 72-IV (the order of enforcement see Art. 2), dated 11.07.2009 No. 185-IV (shall be enforced from 30.08.2009), dated 30.12.2009 No. 234-IV; dated 19.03.2010 No. 258-IV; dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication), dated 05.07.2012 No.30-V (shall be enforced upon expiry of ten calendar days after its first official publication), dated 24.12.2012 No. 60-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 16.05.2014 No. 203-V (shall be enforced after six months after day of its first official publication); dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication); dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 No. 168-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.04.2019 No. 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 37-1. Transfer of the insurance portfolio

      1. An insurance (reinsurance) company with the consent of a policyholder shall have the right to transfer of the insurance portfolio in one or more classes of insurance to other insurance (reinsurance) company, licensed under this class (classes) of insurance.

      2. In case of exclusion from the license of certain classes of insurance according to Article 37 of this Law, the insurance company, in presence of the consent of the insurant, shall be obliged to transfer the insurance portfolio for this class (classes, types) of insurance or terminate insurance contracts for this class (classes, types) of insurance with the insurants.

      In case of voluntary return of the reinsurance license, the reinsurance company shall be obliged to transfer the insurance portfolio to another reinsurance company, having a reinsurance license, in presence of the consent of the reinsurant (assignor).

      In case of exclusion from the license of certain classes of insurance, voluntary return of the license for reinsurance activities, the insurance company shall not be entitled to carry out activities related to conclusion and execution of contracts for this class (classes, types) of insurance.

      3. An insurance (reinsurance) company that receives the insurance portfolio shall comply with all prudential standards and other mandatory standards and limits at the time of its acceptance, as well as in view of the newly received insurance portfolio.

      In case of violation by the insurance (reinsurance) company of the standard of sufficiency of the solvency margin within the last six consecutive months, the authorized body shall have the right to make a decision on compulsory transfer of the insurance portfolio under obligatory insurance classes, under pension annuity contracts concluded in accordance with the Law of the Republic of Kazakhstan "On Retirement Insurance in the Republic of Kazakhstan", and under annuity insurance contracts, concluded in accordance with the Law of the Republic of Kazakhstan "On Compulsory Insurance of Employee against Accidents upon Performance of Labor (Official) Duties by them".

      4. The order for transfer of the insurance portfolio shall be defined by the regulatory legal act of the authorized body.

      5. The requirement of paragraph 1 of this Article to obtain the consent of the insurant shall not apply to the transfer of the insurance portfolio between subsidiaries of insurance (reinsurance) companies of the parent bank, which carried out the operation provided for in Article 61-4 of the Law of the Republic of Kazakhstan "On Banks and Banking Activities in the Republic of Kazakhstan".

      In order to notify the insurants (beneficiaries), the insurance company shall publish an announcement of the forthcoming transfer of the insurance portfolio in two periodicals distributed throughout the territory of the Republic of Kazakhstan, in the Kazakh and Russian languages and on the Internet resource of the insurance company within five working days from the date of the decision to transfer the insurance portfolio.

      Footnote. Section is supplemented by Article 37-1 – by the Law of the Republic of Kazakhstan dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2); with the changes made by the Law of the Republic of Kazakhstan dated 27.04.2015 No. 311-V (shall be enforced 01.01.2015); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 38. Refusal to issue licenses for the right to carry out insurance activities, reinsurance activities and activities of an insurance broker

      1. Refusal to issue (reissue) licenses for the right to carry out insurance activities, reinsurance activities and activities of the insurance broker shall be made on the following grounds:

      1) non-compliance with the requirements established by Article 37 of this Law;

      2) non-compliance with the established prudential standards and other obligatory rules and limits in the period of six months prior to filing an application by the insurance group, which includes the insurance (reinsurance) company;

      3) if the applicant within six months from the date of state registration did not apply to the authorized body for a license in accordance with the legislation of the Republic of Kazakhstan;

      4) non-compliance of the submitted documents with the requirements of the legislation of the Republic of Kazakhstan;

      5) disagreement of the executive employee from among the elected bodies of the company (for the newly created insurance (reinsurance) company, insurance broker).

      2. Refusal to issue a license for the right to carry out insurance activities for additional classes of insurance or a license for the right to carry out reinsurance activities or for the right to carry out activities of an insurance broker for an additional type of brokerage activity, in addition to the grounds set out in paragraph 1 of this Article, shall be made on the following grounds:

      1) forecast of non-compliance with prudential standards, taking into account the additional class of insurance (for insurance (reinsurance) companies);

      2) non-compliance with prudential standards within the last three months before the date of filing an application and during its consideration (for insurance (reinsurance) companies);

      3) presence of a valid sanction in the form of suspension of the license for the right to carry out insurance activities or the right to carry out the activities of an insurance broker on the date of filing an application (for insurance (reinsurance) companies and insurance brokers).

      Footnote. Article 38 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 39. Licensing of the activities of an authorized auditor

      (Article is excluded by the Law of the Republic of Kazakhstan dated 5 May, 2006 No. 139 (the order of enforcement see Art. 2 of the Law No. 139).

Article 40. Licensing of actuarial activities in the insurance market

      1. Licensing of actuarial activity in the insurance market of the Republic of Kazakhstan shall be carried out by the authorized body.

      2. To obtain a license for the right to carry out actuarial activities in the insurance market, the applicant shall submit the following documents to the authorized body:

      1) an application for a license in the form established by the regulatory legal act of the authorized body;

      2) information about the applicant for obtaining a license in the form established by the regulatory legal act of the authorized body;

      3) a copy of the identity document;

      4) a notarized copy of higher education diploma;

      5) a copy of the document confirming the payment of the license fee, except for the cases of payment through the payment gateway of "electronic government";

      6) copies of documents certifying that the applicant for obtaining a license has been trained and successfully passed the relevant exams on the minimum mandatory training program of actuaries established by the regulatory legal act of the authorized body, and (or) a copy of the Master's degree complying with the requirements of the regulatory legal act of the authorized body;

      7) for individuals-non-residents of the Republic of Kazakhstan – copies of documents confirming the status of the actuary and membership in international associations of actuaries, the list and requirements to which shall be established by the authorized body;

      8) copies of documents certifying that the applicant for obtaining a license has passed the international exams complying with the requirements of the regulatory legal act of the authorized body (if any);

      9) a copy of the document confirming the existence of work experience complying with the requirements of the regulatory legal act of the authorized body.

      The application for a license shall be considered by the authorized body within one month from the date of submission of the full package of documents complying with the requirements of the legislation of the Republic of Kazakhstan.

      In case of submission by the applicant of an incomplete package of documents provided for by the legislation of the Republic of Kazakhstan for obtaining a license, the authorized body shall give a reasoned refusal to further consideration of the application within two working days from the date of receipt of the documents.

      The application for reissuance of the license, except for the cases provided for in Article 34 of the Law of the Republic of Kazakhstan "On Permissions and Notifications", shall be considered by the authorized body within fifteen working days from the date of submission of the full package of documents complying with the requirements of the legislation of the Republic of Kazakhstan.

      In case of submission by the applicant of the incomplete package of documents provided by the legislation of the Republic of Kazakhstan for reissuance of the license, the authorized body shall give a reasoned refusal to further consideration of the application within two working days from the date of receipt of the documents.

      3. The license for carrying out an actuarial activity in the insurance market shall be issued to the applicant after passing the test for knowledge of the legislation of the Republic of Kazakhstan on insurance and insurance activities. The procedure for testing shall be established by the regulatory legal act of the authorized body.

      4. Every three years, an actuary having a license to carry out actuarial activities in the insurance market shall confirm its qualification in accordance with the requirements established by the regulatory legal act of the authorized body.

      5. The grounds for refusal to issue a license shall be the following cases:

      1) non-compliance of the submitted documents with the requirements of the legislation of the Republic of Kazakhstan;

      2) availability of data on deprivation of a license on the grounds provided for in subparagraphs 2), 3) and 4) of paragraph 1 of Article 60 of this Law;

      3) negative result of testing conducted by the authorized body.

      6. Information on the issuance of a license shall be published on the Internet resource of the authorized body in Kazakh and Russian languages.

      Footnote. Article 40 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 8. The authorized body and the state regulation, control and supervision over the insurance activities

      Footnote. Title of Chapter 8 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 41. The tasks of the state regulation in the field of insurance

      1. The main tasks of the state regulation in the field of insurance shall be:

      1) the establishment and maintenance of a stable insurance system in the Republic of Kazakhstan and the formation of the infrastructure of the national insurance market;

      2) the regulation of the insurance market, the control and supervision over the insurance activities;

      3) the legislative recognition of the bases of insurance, the establishment of compulsory insurance, the principles of participation of the Republic of Kazakhstan in the system of international insurance;

      4) the protection of the rights and legitimate interests of the policyholders, the insured persons and beneficiaries.

      2. The implementation of the state policy in the field of insurance, including the provision of the state control over the situation on the insurance market, shall be carried out by the authorized body and other state bodies within their competence.

      The powers of other state bodies not regulated by this Law may be provided by the relevant separate legislative acts of the Republic of Kazakhstan regulating obligatory types of insurance.

      The interference of state bodies and their officials in the activities of an insurance (reinsurance) company and an insurance broker, except the cases that directly provided for by the legislative acts of the Republic of Kazakhstan, shall be prohibited.

      Footnote. Article 41, as amended by the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 42. The authorized body

      The state regulation, control and supervision over the insurance activities shall be carried out by the authorized body in accordance with the powers, provided by the legislation of the Republic of Kazakhstan.

      The legal status of the authorized body shall be defined by the Laws of the Republic of Kazakhstan and the acts of the President of the Republic of Kazakhstan.

      Footnote. Article 42 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 43. The competence of the authorized body

      The authorized body shall:

      1) implement the state policy to ensure the functioning of the insurance system in the Republic of Kazakhstan and formation of the infrastructure of the national insurance market, protection of the rights and legitimate interests of insurants and other participants of the insurance market;

      2) determine the principles and methods of regulation of the insurance market, the procedure for organization of control and supervision over the insurance activities;

      3) issue permits for creation of insurance (reinsurance) companies;

      4) determine taking into account the requirements of this Law, the procedure of issuing and revoking of the consent for acquisition of status of a major participant of insurance (reinsurance) company or insurance holding, issue a permit for acquisition of status of a major participant of insurance (reinsurance) company or insurance holding, establish the proportion of direct and (or) indirect ownership by the major participant of the voting (excluding the preferred ones) shares of the insurance (reinsurance) company or insurance holding;

      5) give consent to voluntary reorganization and liquidation of the insurance (reinsurance) company;

      6) issue a permit to establish a subsidiary of an insurance (reinsurance) company, an insurance holding for significant participation in the charter capital of legal entities;

      7) define the procedure for formation of the risks management and internal control system for insurance (reinsurance) companies and insurance groups;

      8) determine, taking into account the requirements of this Law, the procedure for issuing and issue licenses for the right to carry out insurance (reinsurance) activities, activities of an insurance broker, actuarial activities in the insurance market;

      9) determine the order of transfer of the insurance portfolio;

      10) establish prudential standards and other mandatory rules and limits for the insurance (reinsurance) company and insurance group, including the minimum amount of the charter capital, guarantee fund, solvency margin and ensure control over their observance;

      11) establish requirements to the minimum size of the charter and own capital of the insurance broker, provide control over their observance;

      12) define the terms and procedure for the activities of the insurance broker;

      13) exercise control over the activities of liquidation commissions of liquidated insurance (reinsurance) companies;

      14) in case of suspension of the license on the grounds provided for by subparagraph 2) of paragraph 1 of Article 54 of this Law, shall have the right to limit the increase in expenses, including administrative, insurance (reinsurance) company;

      15) give consent to the appointment (election) of executives of insurance (reinsurance) companies, insurance holdings and insurance brokers;

      16) analyze, evaluate and control the financial stability and solvency of the insurance (reinsurance) company;

      17) establish the procedure for accounting by an insurance (reinsurance) company of insurance contracts (insurance policies) and reinsurance;

      18) impose requirements to the methods of assessment and principles of calculation of insurance tariffs by classes (types) of insurance of insurance (reinsurance) companies;

      19) determine the procedure for calculating the coefficients characterizing the loss (loss ratio, cost ratio, combined ratio) of the insurance (reinsurance) company;

      20) establish the procedure for calculating the redemption amount;

      21) keep the register of insurance (reinsurance) companies, insurance brokers, branches and representative offices of insurance (reinsurance) companies and insurance brokers, actuaries;

      22) establish requirements for software and hardware of the insurance (reinsurance) company, ensuring the automation of accounting and general ledger;

      23) establish requirements for the activities of the organization for formation and maintenance of the database, including the requirements to:

      information process;

      formation of security system and establishment of minimum requirements for electronic equipment;

      the safety of database;

      rooms;

      24) establish requirements for software and hardware and Internet resources of the insurance (reinsurance) company, ensuring the conclusion of insurance contracts, the exchange of electronic information resources between the insurant and the insurer;

      25) establish requirements for organization of safe work, ensuring the safety and protection of information from unauthorized access to data stored in the insurance (reinsurance) company, as well as cybersecurity of insurance (reinsurance) company;

      26) determine the procedure and peculiarities of reinsurance activities, as well as the insurance (reinsurance) pool;

      27) adopt regulatory legal acts obligatory for execution by insurance (reinsurance) companies and other participants of the insurance market;

      28) carry out inspections of subjects of insurance activity, insurance brokers, separate divisions of subjects of insurance activity and insurance brokers, the organization guaranteeing implementation of insurance payments to insurants (insured, beneficiaries) in case of compulsory liquidation of the insurance company, and also insurance holdings and insurance groups;

      29) carry out control over observance by the insurance (reinsurance) companies and insurance brokers of the requirements of the legislation of the Republic Kazakhstan about counteraction to legalization (laundering) of incomes obtained in a criminal way and financing terrorism;

      30) impose sanctions on professional participants of the insurance market, the insurance holding, the organizations which are the part of insurance group, large participants of the insurance (reinsurance) company, the organization guaranteeing implementation of insurance payments to the insurants (insured, beneficiaries) in case of compulsory liquidation of insurance companies, and its officials;

      31) make decisions on suspension of licenses and deprivation of licenses issued to professional participants of the insurance market;

      32) coordinate the decision of the temporary administration on the transfer of the insurance portfolio in the conservation or deprivation of the license of the insurance (reinsurance) company;

      33) make a decision to apply to the court with a claim for termination of the insurance (reinsurance) company on the grounds provided by the Laws of the Republic of Kazakhstan;

      34) have the right to obtain information about the activities of the insurance (reinsurance) company, the legal status and financial state of its founders, as well as persons who are subsidiaries or separate units in relation to the insurance (reinsurance) company and its founders;

      35) have the right to receive from professional participants of the insurance market and their associations, insurance agents the necessary information for implementation of their control and supervisory functions in accordance with this Law;

      36) have the right to receive from state bodies and organizations the information necessary for implementation of their control and supervisory functions, including information constituting official or commercial secret;

      37) establish requirements for the content and procedure of insurance policies;

      38) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

      38) apply early response measures;

      39) establish the procedure for the exchange of electronic information resources between the insurant (insured, beneficiary) and the insurer;

      40) have the right to apply the measures of supervisory response obligatory for execution to professional participants of the insurance market, the insurance holding, the organization guaranteeing implementation of insurance payments, their executives, the organizations which are a part of insurance group, major participants of the insurance (reinsurance) company, the persons possessing signs of the major participant of the insurance (reinsurance) company or insurance holding;

      41) in the order provided by the legislation of the Republic of Kazakhstan, take measures for compulsory redemption of shares of the insurance (reinsurance) company;

      42) carry out cooperation and necessary exchange of information with other authorized bodies of supervision over the subjects of financial market of the Republic of Kazakhstan;

      43) represents the interests of the Republic of Kazakhstan in relations with the bodies of insurance supervision of other states, as well as international organizations on the issues of regulation of the insurance market and supervision over insurance activities;

      44) establish the order of placement of information on the Internet resource of the insurance company, insurance broker, the organization for formation and maintenance of the database and the organization guaranteeing implementation of insurance payments to the insurants (insured, beneficiaries) in the case of compulsory liquidation of insurance company, the insurance ombudsman;

      45) establish the terms of appointment and procedure of actuarial calculations by independent actuaries;

      46) have the right to demand adjustment of financial and other reporting by the insurance (reinsurance) company, the insurance broker in case of submission of the unreliable (incomplete) reporting by them;

      47) perform other functions provided by this Law, other laws of the Republic of Kazakhstan and acts of the President of the Republic of Kazakhstan.

      Footnote. Article 43 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 44. Checking the activities of insurance (reinsurance) companies, major participants of insurance (reinsurance) companies, insurance brokers, insurance holdings, insurance groups, actuaries having the license to carry out actuarial activities in the insurance market, the organization guaranteeing implementation of insurance payments

      1. Checking the activities of insurance (reinsurance) companies, major participants of the insurance (reinsurance) companies, insurance brokers, insurance holdings, insurance groups, actuaries having the license to carry out actuarial activities in the insurance market, the organization guaranteeing implementation of insurance payments shall be made by the authorized body independently or with involvement of other state bodies and (or) organizations.

      2. Insurance (reinsurance) organizations, major participants of insurance (reinsurance) companies, insurance brokers, insurance holdings, insurance groups, actuaries having the license to carry out actuarial activities in the insurance market, the organization guaranteeing implementation of insurance payments, as well as their affiliated persons shall be obliged to assist the inspection body on the issues, specified in the task of the authorized body for inspection, as well to ensure the possibility of interviewing any officials and employees and access to any sources necessary to check the information.

      3. Persons carrying out checking shall be responsible for the disclosure of information obtained during checking the activities of insurance (reinsurance) companies, major participants of insurance (reinsurance) companies, insurance brokers, insurance holdings, insurance groups, actuaries having a license to carry out actuarial activities in the insurance market, the organization guaranteeing implementation of insurance payments, constituting the secret of insurance or commercial secret.

      4. Employees of the authorized body shall be prohibited from disclosure or transfer to third parties of information obtained during checking the activities of insurance (reinsurance) companies, major participants of insurance (reinsurance) companies, insurance brokers, insurance holdings, insurance groups, actuaries having a license to carry out actuarial activities in the insurance market, the organization guaranteeing implementation of insurance payments.

      5. State bodies carrying out checking of the activities of insurance (reinsurance) companies, major participants of insurance (reinsurance) companies, insurance brokers, separate divisions of insurance (reinsurance) companies, insurance brokers, insurance holdings, insurance groups, actuaries having a license to carry out actuarial activities in the insurance market, the organization guaranteeing implementation of insurance payments, within the powers granted to them by the legislation of the Republic of Kazakhstan, shall be obliged to inform the authorized body about the identified violations of the legislation of the Republic of Kazakhstan on insurance and insurance activities.

      6. The requirements of paragraphs 1 and 2 of this Article shall not apply to non-residents of the Republic of Kazakhstan who are a major participant in the insurance (reinsurance) company – a legal entity, an insurance holding, a person possessing the signs of a major participant of the insurance (reinsurance) company or insurance holding if one of the following conditions is met:

      availability of an individual credit rating not lower than the rating A of one of the rating agencies, the list of which is established by the authorized body, as well as written confirmation from the financial supervision body of the country of origin of the insurance holding, a person possessing the signs of the insurance holding, that these specified non-residents of the Republic of Kazakhstan shall be subject to consolidated supervision;

      availability of an agreement between the authorized body and the relevant supervisory body of a foreign state on the exchange of information, as well as the minimum required rating of one of the rating agencies. The minimum rating and the list of rating agencies shall be established by the regulatory legal act of the authorized body.

      Footnote. Article 44 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 44-1. Disclosure of information by authorized body within the international treaties and other agreements providing exchange of confidential information

      The authorized body provides the information which is an insurance secret, to the organizations specified in point 4 of article 61 of the Law of the Republic of Kazakhstan "About National Bank of the Republic of Kazakhstan" on the conditions provided by the specified article.

      The authorized body provides information obtained according to the international treaties of the Republic of Kazakhstan, agreements providing exchange of confidential information, to other state bodies of the Republic of Kazakhstan only with the consent of the party which provided him such information.

      Footnote. Chapter 8 is added with article 44-1 according to the Law of the Republic of Kazakhstan dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016).

Chapter 9. Regulation of the activities of an insurance (reinsurance) company

Article 45. Solvency and financial stability of an insurance (reinsurance) company

      Footnote. Article 45 is excluded by the Law of the Republic of Kazakhstan dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2).

Article 46. Prudential standards and other mandatory norms and limits

      1. Control and supervision of solvency and financial stability of the insurance (reinsurance) company and individuals, that are subject to the supervision on a consolidated basis shall be made by means of the control and supervision over the execution or compliance with the established by the authorized body prudential standards and (or) other mandatory norms and limits.

      2. Prudential standards for insurance (reinsurance) companies shall include:

      minimum amount of the authorized capital;

      adequacy of solvency margin;

      adequacy of highly liquid assets;

      standards of asset diversification.

      Prudential standards for insurance groups shall be an adequacy of solvency margin.

      The authorized body shall have the right to establish the additional prudential standards, including the investment of assets, covering the insurance reserves for annuity insurance.

      The authorized body shall have the right to establish additional prudential standards for insurance companies having a license to carry out activities for the management of the investment portfolio in the securities market.

      The authorized body in accordance with the legislation of the Republic of Kazakhstan shall take measures to bring to justice the insurance (reinsurance) companies and (or) insurance holding companies or their officials, and (or) the major participants of the insurance (reinsurance) companies or insurance holding companies for breach of the prudential standards and (or) other mandatory standards and limits by the insurance (reinsurance) company.

      3. In the case of a breach of the solvency margin adequacy standards established by the regulatory legal acts of the authorized body by the insurance (reinsurance) company, insurance group, the insurance (reinsurance) company, insurance holding company shall submit a recapitalization plan to the authorized body. The plan shall be submitted within one month from the date of violation of adequacy solvency margin with a detailed description of events and deadlines for the correction of violations.

      4. The insurance holding company, as well as major participants of the insurance (reinsurance) company – individuals owning directly or indirectly more than twenty-five percent of the voting (minus preferred) shares of the insurance (reinsurance) company, shall be obliged to take measures provided for by regulatory legal acts of the authorized body to maintain prudential standards at a level not lower than the established ones.

      In case of deterioration of financial position of the insurance (reinsurance) company or insurance group, the insurance holding, a major participant of the insurance (reinsurance) company shall be obliged, including at the request of the authorized body, to take measures on improving the financial position of the insurance (reinsurance) company or insurance group, on increasing the equity capital of the insurance (reinsurance) company or insurance group in the amount sufficient to ensure the financial stability of the insurance (reinsurance) company or insurance group.

      In case of failure to comply with the requirements provided for by this paragraph, the authorized body shall be entitled to apply to the insurance holding, a major participant of the insurance (reinsurance) company compulsory supervisory response measures provided for in Article 53-4 of this Law.

      4-1. The measures referred to in this Article may also be applied to the affiliated persons of major participants of the insurance (reinsurance) company, if the authorized body establishes that violations, illegal action or inaction of these persons, their officials or employees have worsened the financial state of the insurance (reinsurance) company.

      5. The solvency margin shall be the excess of assets over the liabilities of the insurance (reinsurance) company.

      6. The guarantee fund shall be established in order to ensure the financial stability and solvency of the insurance (reinsurance) company by reducing the solvency margin below the minimum specified amount.

      7. The requirements to calculation of the size of own deduction of the insurance (reinsurance) company under the contract (contracts) of insurance, reinsurance, co-insurance (joint reinsurance) shall be established by regulatory legal acts of the authorized body.

      8. Is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

      9. Insurance (reinsurance) company shall submit the data on the availability and restriction of the use of derivative financial instruments, not included in the financial statements to the authorized body.

      10. Normative values ??and methods of calculation of the prudential standards of insurance (reinsurance) company and insurance group and other mandatory norms and limits, shall be established by the regulatory legal acts of the authorized body.

      10-1. Normative values and techniques of calculations of prudential standards of the Islamic insurance (reinsurance) organization and other regulations and limits, obligatory to observance, are established by regulatory legal acts of authorized body taking into account the features of implementation by the Islamic insurance (reinsurance) organizations of an Islamic insurance activity provided by this Law.

      10-2. In order to determine the cost of assets taken into account in calculation of prudential standards, the authorized body shall have the right to require from the insurance (reinsurance) company, the insurance holding to assess their cost at the appraiser or through the chamber of appraisers.

      In case of non-fulfillment by the insurance (reinsurance) company, insurance holding of the requirements of the authorized body established by part one of this paragraph, the corresponding asset shall be excluded from the subsequent calculation of prudential standards.

      11. In case of failure of the insurance (reinsurance) company, the participant of an insurance group the requirements of the authorized body, specified in a written prescription, to adjust the data in the financial and (or) other accounting, the calculation of prudential standards and other mandatory norms and limits shall be carried out by the authorized body on the basis of the statements, corrected by it.

      Note of the RCLI!
      Article 46 is provided to supplement by paragraph 12 in accordance with the Law of the Republic of Kazakhstan dated 24.11.2015 No. 422-V (shall be enforced from 16.12.2020).
      Footnote. Article 46 is in the wording of the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication), as amended by the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of itsfirst official publication); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 No. 168-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 46-1. The obligation of major participants

      Footnote. Section is supplemented by Article 46-1, in accordance with the Law of the Republic of Kazakhstan dated 23.12.2005 No. 107 (the order of enforcement see Art. 2), is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 47. Insurance reserves

      1. To ensure the fulfillment of obligations under insurance and reinsurance contracts, an insurance (reinsurance) company shall be obliged to have formed insurance reserves in the amount calculated by the actuary having a license to carry out actuarial activities in the insurance market.

      2. Funds of insurance reserves are intended solely for making by the insurance (reinsurance) company of insurance payments related to the performance of its obligations under insurance and reinsurance contracts.

      3. The requirements for formation, method of calculation of insurance reserves and their structure shall be established by regulatory legal acts of the authorized body.

      4. Assessment of sufficiency of insurance (reinsurance) reserves formed by the insurance company shall be carried out by the authorized body, including the use of reasoned judgment.

      Footnote. Article 47 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication)); as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 48. The activities, prohibited or restricted for insurance (reinsurance) companies and insurance holding companies

      1. (Reinsurance) organization acquisition of shares in authorized capitals or events of legal entities, creation and participation in activity of non-profit organizations, except for membership in National chamber of entrepreneurs of the Republic of Kazakhstan and also the cases established by this Law and implementation of the security transactions in cases, stipulated in paragraph 4 of the present article.

      2. Implementation of transactions and transactions as business activity and also acquisition of shares in authorized capitals or events of legal entities, creation and participation in activity of non-profit organizations, except for membership in National chamber of entrepreneurs of the Republic of Kazakhstan and also the cases established by this Law and implementation of the security transactions in cases, stipulated in Item 4 these articles are prohibited insurance holdings.

      3. The prohibition, in paragraphs 1 and 2 of this Article shall not apply to the following cases of establishment, as well as purchase of shares or stakes in the authorized capital:

      1) by insurance (reinsurance) companies:

      organization for the formation and maintenance of the database;

      legal entities, carrying out activities of an insurance agent as an exclusive activity;

      organizations, that guarantee the insurance payments to policyholders (insured persons, beneficiaries) in the case of the compulsory liquidation of insurance companies;

      legal entities in the amount of ten percent of the outstanding (net of preferred and repurchased by the company shares) shares (stakes in the authorized capital), subject to the compliance of the purchased shares (stakes in the authorized capital) with the requirements of the regulatory legal act of the authorized body;

      financial institutions, as well as non-resident legal entities of the Republic of Kazakhstan, having the status of banks, insurance companies, pension funds, professional participants of the securities market, in the amount of ten or more percent of the outstanding (net of preferred and repurchased by the company shares) shares (stakes in the authorized capital) if it has an insurance holding company. At the same time the requirement for availability of insurance holding does not extend to the insurance (reinsurance) organizations which more than fifty percent of voting shares belong to the state or national managing holding;

      2) by insurance holding companies:

      financial institutions;

      non-resident legal entities of the Republic of Kazakhstan, having the status of banks, insurance companies, pension funds, professional participants of the securities market.

      The purchase of the stakes in the authorized capital or shares of the legal entities, specified in paragraph 1) of the first part of this paragraph by the insurance (reinsurance) company, shall not exceed the per legal entity ten percent of the equity capital of the insurance (reinsurance) company.

      This restriction shall apply to the ownership of the insurance (reinsurance) company of the stakes in the authorized capital or shares of the specified legal entities, including in cases of their establishment.

      The total value of stakes of the insurance (reinsurance) company in the authorized capital of legal entities or shares shall not exceed fifty percent of the equity capital of the insurance (reinsurance) company.

      Subsidiaries of insurance (reinsurance) companies shall have the right to purchase only the shares or stakes in the authorized capital of legal entities that meet the requirements, established by the regulatory legal act of the authorized body. This requirement shall not apply to subsidiary banks - residents of the Republic of Kazakhstan.

      Subsidiaries of an insurance holding company shall have the right to purchase only the shares or stakes in the authorized capital of legal entities that meet the requirements, established by the regulatory legal act of the authorized body. This requirement shall not apply to:

      affiliated insurance (reinsurance) companies - residents of the Republic of Kazakhstan;

      subsidiary banks - residents of the Republic of Kazakhstan;

      legal entities, in which the insurance holding company shall be the parent organization through the ownership (the availability to vote, make decisions and (or) influence on the decisions, made by virtue of a contract or otherwise) of shares of the insurance (reinsurance) company or bank-residents of the Republic of Kazakhstan that directly own (having the ability to vote, make decisions and (or) influence on the decisions, made by virtue of a or otherwise) the shares or stakes in the authorized capital of these entities;

      non-residents of the Republic of Kazakhstan that are subsidiaries of non-residents of the Republic of Kazakhstan that is an insurance holding company, in case of implementation of any of the following conditions:

      the presence of an insurance holding company an individual credit rating not lower rated A of one of the rating agencies, the list of which is established by the authorized body, as well as a written confirmation from the financial supervisory authority of the country of origin of these persons that they are subject to the consolidated supervision;

      the existence of an agreement between the authorized body and the relevant supervisory authority of a foreign state for the exchange of information, as well as the minimum required rating of one of the rating agencies. Minimum rating and list of rating agencies shall be established by the regulatory legal act of the authorized body.

      4. The prohibition, in paragraphs 1 and 2 of this Article shall not apply in cases of purchase to the ownership:

      1) by insurance holding companies:

      bonds of international financial institutions, the list of which is set by the authorized body;

      bonds with a minimum required rating. The minimum required rating and list of rating agencies shall be established by the regulatory legal act of the authorized body;

      2) by insurance (reinsurance) companies:

      financial instruments (except for shares and stakes in the authorized capital), the list of which shall be established by the regulatory legal acts of the authorized body.

      The restrictions, established by this Article shall not apply to the cases of purchase by the insurance (reinsurance) company, insurance holding company the bonds, instead of the previously purchased, the organizations that are in the process of restructuring, subject to the inclusion of obligations on the previously issued bonds in the list of the restructured obligations of the organization.

      5. Insurance (reinsurance) companies shall be prohibited to:

      1) to release other types of securities, except events and also not secured bonds corresponding to conditions, the stipulated in Clause 25-1 this Law;

      2) to raise borrowings from banks for the term exceeding three months in a size exceeding the equity size except for attraction of a loan without providing corresponding to conditions, the stipulated in Clause 25-1 this Law;

      2-1) to attract borrowed funds from individuals and legal entities, except for attracting the loans without collateral, complying with the conditions provided for in Article 25-1 of this Law;

      3) provide financial assistance on a grant basis, except for financial assistance to officials and employees of the insurance (reinsurance) company in an amount, not exceeding hundred times of the monthly calculation index;

      4) provide loans by any means, except for the cases, established by the legislation of the Republic of Kazakhstan;

      5) payment of any types of remuneration to the insurants, including through third parties, unless otherwise provided by the legislation of the Republic of Kazakhstan;

      6) to issue the employees and affiliated persons of the insurance (reinsurance) company money without primary accounting documents.

      6. In addition to the activities specified in paragraph 2 of this Article, the insurance holding companies shall have the right to engage in the following activities:

      1) the purchase of property from a person other than an affiliated person of an insurance holding company, purchased for its own needs;

      2) the provision of advisory services on matters related to the financial activities;

      3) the sale of own property to a person that is a non- affiliated person of an insurance holding company.

      7. Insurance reinsurance) organizations and insurance holdings forbids implementation of transactions with the derivative financial instruments, except for the transactions made for the purpose of hedging of risks.

      8. The total percentage of shares (stakes in the authorized capital) of the parent organization of group insurance, the insurance (reinsurance) company or the insurance holding company, owned by subsidiaries of the insurance (reinsurance) company or the insurance holding company, the organizations, in which the insurance (reinsurance) company or the insurance holding company has a major participation, shall not exceed the limits defined by the regulatory legal act of the authorized body.

      9. The requirements of this article shall not apply to:

      1) non-residents of the Republic of Kazakhstan that are an insurance holding company, a person with characteristics of an insurance holding company, in the implementation of any of the following conditions:

      the presence of an individual’s credit rating not lower rated A of one of the rating agencies, the list of which shall be established by the authorized body, as well as a written confirmation from the financial supervisory authority of the country of origin of the insurance holding company, the person having the characteristics of the insurance holding company, the fact that the persons - non -residents of the Republic of Kazakhstan shall be subject to the consolidated supervision;

      the existence of an agreement between the authorized body and the relevant supervisory authority of a foreign state for the exchange of information, as well as the minimum required rating of one of the rating agencies. Minimum rating and list of rating agencies shall be established by the regulatory legal act the authorized body;

      2) insurance holding companies, that are bank holding companies, including to the banking conglomerates;

      3) on the insurance holding companies, indirectly owning (having the ability to vote, make decisions and (or) influence on the decisions, made by virtue of a contract or otherwise) the shares of the insurance (reinsurance) company through the ownership of (the possibility to vote, make decisions and (or) influence on the decisions, made by virtue of a contract or otherwise) shares or stakes in the authorized capital of the insurance holding company - resident of the Republic of Kazakhstan, that directly owns (having the ability to vote, make decisions and (or) influence on the decisions, made by virtue of a contract or otherwise) the shares of the specified insurance (reinsurance) company;

      4) insurance holding companies - residents of the Republic of Kazakhstan, that are financial institutions.

      10. Insurance (reinsurance) company shall transfer the part of its accepted insurance risks from affiliates of insurance (reinsurance) company, exceeding the amount of the self-retention of the insurance (reinsurance) company to the insurance (reinsurance) companies with an international credit rating not lower the sovereign rating of the Republic of Kazakhstan. The list of rating agencies shall be established by the regulatory legal act of the authorized body.

      11. The requirements of this Article shall not apply to the investment of assets formed at the expense of part of insurance premiums received from the insurants for investment purposes and income (losses) received from their investment under insurance contracts providing for the condition of participation of the insurant in investments.

      Footnote. Article 48 is in the wording of the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV (the order of enforcement see Art. 2), as amended by the Law of the Republic of Kazakhstan dated 26.12.2012 No. 61 -V (shall be enforced from 04.02.2012); dated 10.06.2014 No. 206-V (shall be enforced after ten calendar days after day of its first official publication); dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication); dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 49. Performing major transactions on insurance


      1. The transaction on insurance (reinsurance) shall be recognized as major, if the insured sum (the accepted volume of obligations) under the separate concluded insurance contract or the accepted volume of obligations under the separate reinsurance contract of the insurance (reinsurance) company exceeds the standard established by the regulatory legal act of the authorized body.

      2. The decision on performing a major transaction shall be made in accordance with the Law of the Republic of Kazakhstan "On Joint Stock Companies" on the basis of the conclusion of an actuary having a license to carry out actuarial activities in the insurance market.

      Footnote. Article 49 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 50. Transactions with securities and promissory notes

      1. Transactions, made with the shares of insurance (reinsurance) company shall be registered in accordance with the legislation of the Republic of Kazakhstan with the specifications, prescribed in this Law.

      2. The insurance (reinsurance) company shall not issue a golden share.

      Footnote. Article 50 as amended –by the Law of the Republic of Kazakhstan dated 23 December, 2005 No. 107 (the order of enforcement see Article 2 of the Law No. 107), dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2).

Article 51. Control over the transactions with shares of the insurance (reinsurance) company

      1. The person, receiving the right of ownership or control over the voting (net of preferred) shares of the insurance (reinsurance) company in an amount more than five percent of the total number of the voting (net of preferred) shares, shall submit a written notice within ten calendar days to the authorized body on making the transaction with supporting documents.

      2. Is excluded by the Law of the Republic of Kazakhstan dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004).
      3. Is excluded by the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2).

      4. The requirements of this Article shall apply to all types of transactions with shares of insurance (reinsurance) companies and depositary receipts, issued for shares of insurance (reinsurance) companies.

      Footnote. Article 51, as amended by the Laws of the Republic of Kazakhstan dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004), dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2).

Article 52. Participation of the insurance (reinsurance) company in joint activities

      1. The insurance (reinsurance) company shall have the right to participate in creation of a consortium or a simple partnership in accordance with the requirements established by Article 13 of this Law.

      2. Supervision over the activities of the insurance (reinsurance) company, affiliated with it and its founders, persons and organizations participating in consortia and simple partnerships with participation of insurance (reinsurance) companies may be carried out on a consolidated basis. The rules of consolidated supervision shall be approved by the authorized body.

      Footnote. Article 52 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 52-1. The system of risk management and internal control

      1. Insurance (reinsurance) companies form a system of risk management and internal control that shall include:

      1) the powers and functional responsibilities for risk management and internal control of the board of directors, governing body, subdivisions of insurance (reinsurance) company, their responsibilities;

      2) internal policies and procedures for risk management and internal controls;

      3) limits on the permissible extent of risks, separately by types of activities of the insurance (reinsurance) company;

      4) internal reporting procedures for risk management and internal control to the bodies of the insurance (reinsurance) company;

      5) internal criteria for evaluating the effectiveness of the risk management system.

      The order for formation of the system of risk management and internal control shall be established by the regulatory legal act of the authorized body.

      The specifics of forming a risks management system by the insurance companies having a license for implementation of activity on management of an investment portfolio in the securities market shall be determined by the regulatory legal act of the authorized body provided in this paragraph.

      1-1. Insurance companies, carrying out activity on investment management of assets, shall form a system of risks management and internal control in the manner prescribed by the regulatory legal act of the authorized body.

      2. Insurance group shall have a system of risk management and internal control, corresponding to the requirements, established by the regulatory legal act of the authorized body.

      The parent organization of the insurance group shall ensure the compliance with the requirements of the system of risk management and internal control on a consolidated basis.

      The parent organization of the insurance group shall be responsible for compliance of the participants of the insurance group with the requirements of the system of risk management and internal controls.

      3. The authorized body shall assess the compliance of the risks management and internal control system with the requirements established by this Article.

      Footnote. Chapter 9 is supplemented by Article 52-1 in accordance with the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication); as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2009).

Article 52-2. Prohibition on advertising that do not correspond to reality

      1. Insurance (reinsurance) companies shall be prohibited from advertising and their activities that do not correspond to reality on the day of its publication.

      2. The authorized body shall have the right to require the insurance (reinsurance) company to make the changes in the advertising that do not correspond to reality, its termination or publication of its denial.

      In the case of non-fulfillment of the requirements in the established by the authorized body term, the authorized body may publish the information on inaccurate data, contained in the advertising, or define them at the expense of the insurance (reinsurance) company that published such advertising.

      3. It is prohibited to act as an advertiser of services, provided by insurance (reinsurance) companies, to the following persons:

      legal entities that are not licensed by the authorized body in the field “life insurance” or “general insurance”, as well as carrying out the activity on reinsurance;

      individuals that are not employees of the insurance (reinsurance) company and not authorized insurance (reinsurance) companies.

      Footnote. Chapter 9 is supplemented by Article 52-2 in accordance with the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 10. Supervisory response measures, sanctions and other measures of influence

      Footnote. The title of chapter 10 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

Article 53. Early response measures

      1. In order to protect the legitimate interests of the insurant, to ensure the financial stability of insurance (reinsurance) companies, to prevent deterioration of their financial position and increase the risks associated with insurance activities, the authorized body shall analyze the activities of insurance (reinsurance) companies to identify factors affecting the deterioration of the financial position of insurance (reinsurance) companies, established by the regulatory legal act of the authorized body.

      2. In order to ensure the financial stability of the insurance group, to prevent deterioration of its financial position and increase the risks associated with the activities of the insurance group, the authorized body shall analyze the activities of the insurance group to identify factors affecting the deterioration of the financial position of the insurance group established by the regulatory legal act of the authorized body.

      3. In case of identification of the factors, specified in paragraph 1 of this Article, as a result of the analysis of financial position of the insurance (reinsurance) company and (or) following the results of its check, the authorized body shall send to the insurance (reinsurance) company and (or) its shareholders the requirement in written form on representation of the action plan, providing measures of early reaction for the increase of financial stability of the insurance (reinsurance) company, preventing deterioration of its financial position and increasing the risks associated with insurance activity.

      The insurance (reinsurance) company and (or) its shareholders shall be obliged to develop and submit to the authorized body the action plan with indication of the terms of execution on each point and responsible executives within no more than five working days from the date of receipt of the specified requirement..

      Upon approval of the action plan by the authorized body, the insurance (reinsurance) company and (or) its shareholders shall proceed to its implementation, notifying the authorized body of the results of its execution within the terms established by the plan.

      In case of disapproval of the action plan, the authorized body shall apply to the insurance (reinsurance) company and (or) its major participants (insurance holdings) the supervisory response measures provided for by this Law.

      4. In case of detection of the factors specified in paragraph 2 of this Article, as a result of analysis of the financial position of the insurance group and (or) by the results of audit of the insurance holding or participants of the insurance group, the authorized body shall send to the insurance holding and (or) its major participant the requirement in written form on representation of the action plan, providing measures of early reaction for the increase of financial stability of the insurance group, preventing deterioration of its financial position and increasing the risks, associated with the activities of the insurance group.

      The insurance holding and (or) its major participants shall be obliged to develop and submit to the authorized body the action plan with indication of the terms of execution on each point and responsible executives within no more than five working days from the date of receipt of the specified requirement.

      Upon approval of the action plan by the authorized body, the insurance holding and (or) its major participants shall proceed to its implementation, notifying the authorized body of the results of its execution within the terms established by the plan.

      In case of disapproval of the action plan, the authorized body shall apply to the insurance holding and (or) its major participants the supervisory response measures provided for by this Law.

      5. In case of non-submission within the terms established by paragraphs 3 and 4 of this Article, of an action plan aimed at improving the financial stability of the insurance (reinsurance) company (insurance group), failure to perform or untimely execution of the activities of this plan, the supervisory response measures provided for by this Law shall be applied to the insurance (reinsurance) company (insurance holding) and (or) its (its) major participants.

      In case of non-elimination of the factor (factors) influencing deterioration of financial position of the insurance (reinsurance) company (insurance group), after completion of terms and actions of the corresponding plan (plans), supervisory response measures provided by this Law shall be applied to the insurance (reinsurance) company (insurance holding) and (or) to the executives of the insurance (reinsurance) company (insurance holding).

      6. If there is no possibility of execution by the insurance (reinsurance) company, insurance holding and (or) a major participant of actions in the terms established in the action plan, due to the reasons beyond their control, the term of execution of the action plan may be prolonged by the authorized body according to the petition of the insurance (reinsurance) company, insurance holding and (or) a major participant.

      7. The procedure for approval of the action plan providing for early response measures and the method of determining the factors affecting the deterioration of financial position of the insurance (reinsurance) company (insurance group) shall be established by the regulatory legal act of the authorized body.

      Footnote. Article 53 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

Article 53-1. Supervisory response measures.

      1. In order to protect the legitimate interests of the insurants (beneficiaries) of the insurance (reinsurance) company, to ensure financial stability of the insurance (reinsurance) company and the insurance group, to prevent deterioration of their financial position and increase the risks associated with insurance activities, the authorized body shall apply to the insurance (reinsurance) company, insurance broker, insurance holding company, organization guaranteeing implementation of insurance payments, their executives, organizations that are part of the insurance group, to the major participants of the insurance (reinsurance) company, the persons possessing signs of a major participant of the insurance (reinsurance) company or insurance holding, the actuary having a license for implementation of actuarial activity in the insurance market, the measures of supervisory response.

      2. The grounds for application of supervisory response measures shall be:

      1) violation of the legislation of the Republic of Kazakhstan on the issues within the competence of the authorized body;

      2) shortcomings and (or) risks in the activities of the insurance (reinsurance) company, insurance broker, insurance holding, organization guaranteeing implementation of insurance payments, organizations that are part of the insurance group, an actuary having a license to carry out actuarial activities in the insurance market, identified by the authorized body in the framework of the functions of control and supervision, including the use of substantiated judgment, which can lead to creation of a position, threatening the stable functioning of the insurance (reinsurance) company, and (or) interests of its insurants (beneficiaries), and (or) stability of the insurance system of the Republic of Kazakhstan;

      3) identification of illegal actions or inaction of the executives of the insurance (reinsurance) company, insurance broker, insurance holding, organization guaranteeing implementation of insurance payments that may threaten their stable functioning and (or) the interests of the insurants (beneficiaries);

      4) sufficient data for recognition the actions (inaction) of the executive (executives) not complying with the requirements of the legislation of the Republic of Kazakhstan on the issues within the competence of the authorized body, and (or) testifying of the damage caused to the insurance (reinsurance) company, the insurance broker, the organization guaranteeing implementation of insurance payments, and (or) to the insurants (beneficiaries);

      5) committing of actions by the person possessing signs of a major participant of the insurance (reinsurance) company or insurance holding, and also by the major participant of the insurance (reinsurance) company (including the organizations over which a major participant has control), the insurance holding or the organizations which are a part of insurance group as a result of which the insurance (reinsurance) company has been caused or may be caused a damage;

      6) unstable financial position of the persons possessing signs of a major participant of the insurance (reinsurance) company or insurance holding, and also major participants of the insurance (reinsurance) company (including the organizations over which a major participant of the insurance (reinsurance) company has control), insurance holding or the organizations which are a part of insurance group;

      7) failure to comply with the supervisory response measures previously applied in accordance with this Law;

      8) non-submission to the authorized body or submission of unreliable reports or information, as well as other information requested by the authorized body;

      9) preventing the insurance (reinsurance) company, insurance broker, insurance holding company, insurance group, organizations that are a part of the insurance group, major participants of the insurance (reinsurance) company, the organization guaranteeing implementation of insurance payments, the actuary having a license to carry out actuarial activities in the insurance market, the conduct of audit, which caused the impossibility of its conduct in the established terms;

      10) non-elimination by the insurance (reinsurance) company, insurance holding, an organization that is a part of the insurance group, of the shortcomings that affect the financial state of the insurance (reinsurance) company or insurance group, specified in the audit report, within the terms provided in paragraph 10 of Article 20 of this Law.

      3. In determining the appropriateness of applying the supervisory response measures and selection of the measure of supervisory response shall be taken into account:

      1) the level of risk, nature of violations and (or) shortcomings and their consequences;

      2) the scale and significance of the violations and (or) shortcomings and their consequences;

      3) regularity and duration of violations and (or) shortcomings;

      4) the impact of violations and (or) shortcomings on the financial state;

      5) the ability to adjust the situation as a result of applying the selected measure of supervisory response;

      6) availability and effectiveness (efficiency) of previously applied supervisory response measures;

      7) adequacy of the applied supervisory response measure to the grounds for its application;

      8) the reasons which caused occurrence of the revealed violations and (or) shortcomings and (or) risks;

      9) acceptance by the insurance (reinsurance) company, insurance broker, insurance holding, the organizations which are part of insurance group, a major participant of the insurance (reinsurance) company, the organization guaranteeing implementation of insurance payments, the actuary having a license for implementation of actuarial activity in the insurance market, independent measures directed on elimination of violations and (or) shortcomings revealed in the activity, effectiveness of implementation (non-implementation) of specific measures to implement the applied measures taken in this regard and (or) readiness to take such measures.

      4. The authorized body shall apply the following supervisory response measures:

      1) recommendatory measures of supervisory response in accordance with Article 53-2 of this Law;

      2) measures to improve the financial state and (or) minimize risks in accordance with Article 53-3 of this Law;

      3) compulsory supervisory response measures in accordance with Article 53-4 of this Law.

      5. The authorized body shall have the right to apply to the insurance (reinsurance) company, insurance broker, insurance holding company, organization guaranteeing implementation of insurance payments, their executives, persons possessing signs of a major participant in the insurance (reinsurance) company or insurance holding, organizations that are part of the insurance group, major participants in the insurance (reinsurance) company, an actuary having a license to carry out actuarial activities in the insurance market, any of the supervisory response measures determined in paragraph 4 of this Article, regardless of the supervisory response measures previously applied to them.

      6. The procedure of applying the measures of supervisory response shall be established by the regulatory legal act of authorized body.

      Footnote. Article 53-1 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

Article 53-2. Recommendatory measures of supervisory response

      1. The authorized body shall apply recommendatory measures of supervisory response in cases when the shortcomings, risks or violations identified in the activities of the insurance (reinsurance) company, insurance broker, insurance group and (or) organizations that are part of the insurance group, insurance holding, a major participant of the insurance (reinsurance) company, the organization guaranteeing implementation of insurance payments, the actuary having a license to carry out actuarial activities in the insurance market, including the use of reasoned judgment, do not make a significant impact on financial stability of the insurance (reinsurance) company and (or) insurance group, do not pose a threat to their financial position and (or) interests of the insurants (beneficiaries) of the insurance (reinsurance) company.

      2. Recommendatory measures of supervisory response shall include:

      1) notification about the identified shortcomings, risks or violations with bringing (if necessary, determined by the authorized body) this information to the attention of individual bodies of the insurance (reinsurance) company, insurance broker, organization that is a part of the insurance group, insurance holding, a major participant of the insurance (reinsurance) company, organization guaranteeing implementation of insurance payments;

      2) providing recommendations of the authorized body on elimination of the revealed shortcomings, risks or violations;

      3) warning about the possibility of applying other measures of supervisory response in case of repeated detection by the authorized body of shortcomings, risks or violations, as well as non-compliance with the recommendatory measures of supervisory response.

      3. Recommendatory measure of supervisory response shall be issued by the letter of the authorized body.

      Footnote. The head is added with article 53-2 according to the Law of the Republic of Kazakhstan dated 20.02.2006 N 128 (an order of enforcement see Art. 2); is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

Article 53-3. Measures on improving financial state and (or) minimizing risks

      1. The authorized body in order to eliminate shortcomings, risks or violations, including those identified with the use of reasoned judgment, shall apply the measures on improving financial state and (or) minimizing the risks of the insurance (reinsurance) company, insurance broker, insurance holding, insurance group and (or) organizations that are part of the insurance group, a major participant of the insurance (reinsurance) company, the organization guaranteeing implementation of insurance payments, an actuary having a license to carry out actuarial activities in the insurance market, through the submission of claims for:

      1) maintaining the standard of sufficiency of the solvency margin and (or) the standard of sufficiency of highly liquid assets above the minimum values established by the authorized body;

      2) suspension and (or) restriction of certain types of transactions, including insurance (reinsurance) contracts, or establishment of a special procedure for their implementation;

      3) reduction of expenses, including by means of termination or restriction of additional employment of employees, closing of separate branches and representative offices, subsidiaries, restriction of monetary rewards and other types of material incentives of executives;

      4) suspension and (or) restriction of investments in certain types of assets or establishment of their special order of implementation;

      5) additional formation of insurance reserves;

      6) recognition of an individual and (or) a legal entity as a person related to an insurance (reinsurance) company, an insurance holding by special relations;

      7) change of the terms of the transaction made on preferential terms with the person connected with the insurance (reinsurance) company, insurance holding by special relations, to the terms of similar transactions with third parties concluded on the date of the transaction with preferential terms;

      8) restriction of operations with persons connected with the insurance (reinsurance) company, insurance holding by special relations;

      9) termination of accrual and (or) payment of dividends on common and (or) preferred shares;

      10) revision of internal policies and procedures, limits on the permissible amount of risks, procedures for assessing the effectiveness of risks management and internal control system;

      11) suspension from performance of official duties of the persons specified in Article 34 of this Law, including in case of suspension by the insurance (reinsurance) company, insurance holding, insurance broker of the persons, specified in Article 34 of this Law from performance of official duties before application by the authorized body of this measure of supervisory response. When applying this supervisory response measure to the executive, the authorized body shall withdraw the consent to the appointment (election) to the position of the executive;

      12) carrying out assessment of the cost of property owned by a major participant of the insurance (reinsurance) company and (or) insurance holding;

      13) elimination of the causes and (or) conditions that contributed to the violation of the rights and legitimate interests of the insurants (beneficiaries) of insurance (reinsurance) companies;

      14) exclusion of the insurance agent from the register of insurance agents;

      15) ensuring compliance of their activities with the legislation of the Republic of Kazakhstan.

      2. The measures provided for in paragraph 1 of this Article shall be applied in the form of a written instruction or agreement.

      3. The written instruction is an indication of the insurance (reinsurance) company, the insurance broker, the organization guaranteeing implementation of insurance payments, the actuary having a license for implementation of actuarial activity in the insurance market, the organizations which are part of insurance group, the insurance holding, a major participant of the insurance (reinsurance) company for acceptance of the measures obligatory to execution established by paragraph 1 of this Article, and (or) on necessity of submission in the established term of the plan of actions for their execution (hereinafter - the plan of actions).

      The action plan shall include a description of shortcomings, risks or violations, the reasons for their occurrence, a list of planned activities, terms of their implementation, as well as responsible executives.

      4. The written agreement is a written agreement concluded between the authorized body and the insurance (reinsurance) company, or insurance holding company, or organizations that are part of the insurance group, or a major participant in the insurance (reinsurance) company, or insurance broker, or organization guaranteeing implementation of insurance payments, on execution of measures, established by paragraph 1 of this Article, indicating the terms of elimination of revealed shortcomings, risks or violations and (or) the list of restrictions, which are assumed by the specified persons before elimination of the revealed violations and (or) shortcomings.

      The written agreement shall be subject to mandatory signing by the insurance (reinsurance) company, or insurance holding, or organizations that are part of the insurance group, or a major participant in the insurance (reinsurance) company, insurance broker, organization guaranteeing implementation of insurance payments.

      5. The insurance (reinsurance) company, insurance holding, the organization which is a part of insurance group, a major participant of the insurance (reinsurance) company, the insurance broker, the organization guaranteeing implementation of insurance payments, the actuary having a license to carry out actuarial activity in the insurance market shall be obliged to notify the authorized body on execution of the measures, specified in the written instruction and the written agreement in the terms provided by these documents.

      6. In case of absence of possibility of elimination of violation in the terms, established in the written instruction and (or) the action plan, the written agreement, for the reasons beyond the control of the insurance (reinsurance) company, the insurance holding, the organizations which are part of insurance group, a major participant of the insurance (reinsurance) company, the insurance broker, the organization guaranteeing implementation of insurance payments, the actuary having a license to carry out actuarial activity in the insurance market, the term on execution of the written instruction and (or) the action plan, the written agreement may be prolonged until the date, established by the authorized body.

      Footnote. Section is supplemented by Article 53-3, in accordance with the Law of the Republic of Kazakhstan dated 20.02.2006 No. 128 (the order of enforcement see Art. 2); is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

Article 53-4. Compulsory measures of supervisory response

      1. The authorized body shall apply compulsory measures of supervisory response to the persons, possessing the signs of a major participant of the insurance (reinsurance) company or insurance holding, as well as to major participants of the insurance (reinsurance) company, the insurance holding and the organizations that are part of the insurance group, in the following cases:

      1) provided by paragraph 10 of Article 20, paragraph 14-1 of Article 26, paragraph 4 of Article 46 of this Law;

      2) if the application of other measures of supervisory response cannot ensure protection of legitimate interests of the insurants (beneficiaries), financial stability of the insurance (reinsurance) company and (or) insurance group, minimizing the risks associated with the activities of the insurance (reinsurance) company, insurance holding;

      3) if the actions (inaction) of the insurance holding and (or) a major participant of the insurance (reinsurance) company can lead to further deterioration of financial position of the insurance (reinsurance) company, the insurance holding.

      2. If there are cases provided for in paragraph 1 of this Article, the authorized body shall have the right to:

      1) demand from the person, possessing signs of a major participant of the insurance (reinsurance) company, and also from the major participant of the insurance (reinsurance) company, reduction of the share of its direct or indirect ownership to the level below ten percent of voting shares of the insurance (reinsurance) company;

      2) demand from the person possessing signs of insurance holding, and also from the insurance holding, reduction of the share of its direct or indirect ownership to the level below twenty five percent of voting shares of the insurance (reinsurance) company and to suspend implementation of operations (direct and indirect) between it and the insurance (reinsurance) company exposing the insurance (reinsurance) company to the risk;

      3) demand from the insurance (reinsurance) company and insurance holding in respect of organizations where insurance (reinsurance) company or insurance holding is a shareholder (participant), as well as organizations which are part of the insurance group, to suspend operations (direct and indirect) between them, exposing the insurance (reinsurance) company and (or) the insurance holding or organizations, that are part of the insurance group, to the risk;

      4) demand from the insurance (reinsurance) company or a person possessing signs of an insurance holding, as well as an insurance holding, alienation of its share of ownership or control over a subsidiary or organizations in the capital of which they have a significant participation;

      5) demand from the organizations which are part of insurance group to suspend implementation of operations (direct and indirect) between them and their affiliated persons exposing the organizations which are part of insurance group to the risk;

      6) in order to increase the equity of the insurance (reinsurance) company or insurance group in an amount sufficient to ensure the financial stability of the insurance (reinsurance) company or insurance group, demand from the insurance holding, a major participant of the insurance (reinsurance) company to take measures for additional capitalization of the insurance (reinsurance) company or insurance group.

      3. In case of non-fulfillment by a major participant of an insurance (reinsurance) company, an insurance holding or a person possessing signs of a major participant of an insurance (reinsurance) company or an insurance holding, of the requirements provided for in paragraph 2 of this Article, as well as in part two of paragraph 10 of Article 20 of this Law, on the basis of the decision of the authorized body, a trust management of shares of an insurance (reinsurance) company belonging to a major participant of an insurance (reinsurance) company, an insurance holding or a person having the signs of a major participant in the insurance (reinsurance) company or insurance holding shall be established. These shares shall be transferred to the trust management of the authorized body for up to three months.

      The authorized body shall have the right to make a decision on the transfer of shares of the insurance (reinsurance) company owned by a major participant of the insurance (reinsurance) company, the insurance holding or a person possessing the signs of a major participant of the insurance (reinsurance) company or insurance holding, to the trust management of the national managing holding.

      In case of transfer of the shares of the insurance (reinsurance) company belonging to the major participant of the insurance (reinsurance) company, insurance holding or the person possessing the signs of a major participant of the insurance (reinsurance) company or insurance holding to trust management to the national managing holding, the term for which trust management of shares is established shall be determined in the decision of authorized body on establishment of trust management.

      During implementation by the authorized body or national managing holding of trust management of the shares of the insurance (reinsurance) company, the owner of shares shall have no right to perform any actions concerning the shares which are in trust management.

      A major participant of an insurance (reinsurance) company, an insurance holding or a person possessing the signs of a major participant of an insurance (reinsurance) company or an insurance holding, shall have the right to apply to the authorized body for the sale of all shares of the insurance (reinsurance) company to the persons, specified in the petition.

      The petition shall be satisfied by the authorized body in case of fulfillment of the requirements of legislative acts of the Republic of Kazakhstan, specified in the petition by the acquirers of shares.

      At non-elimination of the grounds for the transfer of shares of the insurance (reinsurance) company belonging to the major participant of the insurance (reinsurance) company, the insurance holding or the person possessing signs of a major participant of the insurance (reinsurance) company or insurance holding in trust management before the expiration of term on which trust management was established, the authorized body or national managing holding shall alienate the shares of the insurance (reinsurance) company, which are in trust management, through their sale on the organized securities market at the market value prevailing at the date of making the decision on the sale of shares. In the absence of information on the market value of shares, the share sale price may be determined by the appraiser in accordance with the legislation of the Republic of Kazakhstan. The proceeds from the sale of these shares shall be transferred to the persons, whose shares have been transferred to trust management.

      Actions for the sale of shares of the insurance (reinsurance) company belonging to a major participant of the insurance (reinsurance) company, the insurance holding or the person possessing signs of a major participant of the insurance (reinsurance) company or insurance holding shall be performed at the expense of means of the insurance (reinsurance) company.

      The procedure for trust management of the shares of an insurance (reinsurance) company belonging to a major participant of an insurance (reinsurance) company, an insurance holding or a person possessing the signs a major participant of an insurance (reinsurance) company or an insurance holding, as well as actions of the authorized body or national managing holding during the period of trust management shall be established by the regulatory legal act of the authorized body.

      Footnote. Is supplemented by Article 53-4 in accordance with the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

Article 53-5. Sanctions

      1. The authorized body shall have the right to apply the following sanctions to the insurance (reinsurance) company, insurance holding, organizations that are part of the insurance group, major participants of the insurance (reinsurance) company, insurance broker, actuary having a license to carry out actuarial activities in the insurance market, the organization guaranteeing implementation of insurance payments, regardless of the previously applied supervisory response measures:

      1) suspension of the license on the grounds established by Articles 54 and 59 of this Law;

      2) introduction of conservation on the grounds and in the manner prescribed by Articles 55-1, 55-2, 55-3, 55-4 and 55-5 of this Law;

      3) deprivation of a license on the grounds provided for in Articles 55 and 60 of this Law;

      4) revocation of permission for creation of an insurance (reinsurance) company on the grounds provided for in Article 29 of this Law;

      5) making a decision on compulsory purchase of shares of an insurance (reinsurance) company from its shareholders and selling them to a new investor in accordance with the terms of Article 61 of this Law;

      6) making a decision on compulsory transfer of the insurance portfolio on the ground provided for in paragraph 3 of Article 37-1 of this Law.

      2. When determining the appropriateness of applying sanctions and selection of a sanction in the form of suspension or deprivation of a license, the following shall be taken into account:

      1) level of risk, nature of violations and (or) shortcomings and their consequences;

      2) the scale and significance of violations and (or) shortcomings and their consequences;

      3) regularity and duration of violations and (or) shortcomings;

      4) the impact of violations and (or) shortcomings on the financial state;

      5) the reasons which caused the occurrence of revealed violations and (or) shortcomings;

      6) adoption by an insurance company, insurance broker, actuary having s license to carry out actuarial activities in the insurance market, of independent measures aimed at eliminating shortcomings, risks or violations revealed in the activity.

      Footnote. Is supplemented by Article 53-5 in accordance with the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

Article 54. Suspension of the license of an insurance (reinsurance) company and an insurance broker

      1. The license of an insurance (reinsurance) company and an insurance broker may be suspended for a period of up to six months in one of the following grounds:

      1) failure to comply with the requirements of supervisory response measures applied by the authorized body;

      1-1) review the status of the insurance holding company, the major participant of the insurance (reinsurance) company from an individual that owns twenty-five or more percent of the outstanding (net of preferred and bought by the insurance (reinsurance) company shares) shares of the insurance (reinsurance) company, in the absence of the insurance (reinsurance) company of another insurance holding company or a major participant – an individual that owns twenty-five or more percent of the shares of the insurance (reinsurance) company;

      2) failure to comply with prudential standards and other mandatory norms and limits, set by the legislation of the Republic of Kazakhstan;

      2-1) identify the violation of the legislative acts of the Republic of Kazakhstan, regulating the compulsory types of insurance, summed up in the use of unreasonable insurance rates, unjustified refusal in the insurance payments, late insurance payment, non-fulfillment or improper fulfillment of the obligations, arising from the conditions and procedures for compulsory types of insurance;

      2-2) violation of the prohibition established by Article 15-1 of this Law on granting preferential conditions to the persons connected with the insurance (reinsurance) company by special relations;

      2-3) violation of the prohibition, specified in paragraph 3-1 of Article 11 of this Law;

      2-4) violation of the prohibition established by paragraph 4 of Article 17 of this Law;

      2-5) failure by the insurance broker to comply with the requirements for the minimum amount of equity established by the regulatory legal act of the authorized body;

      2-6) identification of the fact of participation of the insurance broker in public procurement for the provision of services related to conclusion of the insurance contract;

      2-7) failure to comply with the conditions and procedure for the activities of the insurance broker, as determined by the regulatory legal act of the authorized body;

      3) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

      4) refusal to provide the documents and information, requested by the authorized body within its jurisdiction in connection with the verification of the insurance activities and the activities of an insurance broker;

      5) violation of the requirements, relating to the coordination of the executives of an insurance (reinsurance) company, an insurance broker;

      6) (Is excluded – dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2);

      7) identification of violation of the legislation, related to the improper reflection in the accounting of financial transactions for insurance (reinsurance), as well as conducting other forms of mandatory accounting forms;

      8) establishment of the fact for providing the inaccurate information in the documents that were the basis for issuance of the license;

      8-1) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

      9) non-payment, late payment or payment of mandatory or extraordinary contributions, as well as additional contributions in an incomplete amount two or more times during the last twelve months to the organization that guarantees the insurance payments to policyholders (insured persons, beneficiaries) under the compulsory liquidation of an insurance company for insurance contracts;

      10) implementation of the insurance agent activity by the insurance broker;

      10-1) implementation by the insurance broker of intermediary activity on conclusion of insurance (reinsurance) contracts without having a valid contract of insurance of its civil liability before the third parties, the object of which are the risks connected with professional liability of the insurance broker;

      11) systematic (three and more times during twelve consecutive calendar months) violation of requirements, stipulated by the legislation the Republic of Kazakhstan about counteraction of legalization (washing) of income gained in the criminal way and to terrorism financing;

      12) absence of the insurance (reinsurance) company the contract of participation in the database in the cases, provided for in this Law;

      13) absence at the insurance (reinsurance) organization of the agreement of participation in the organization guaranteeing implementation of insurance payments to the insurers (insured to beneficiaries) in case of involuntary liquidation of insurance companies which availability is provided by legal acts of the Republic of Kazakhstan on obligatory types of insurance;

      13-1) absence at the insurance (reinsurance) organization of the large participant – natural person or insurance holding at implementation of the obligatory types of insurance, except as specified, provided by part second of point 3-1 of article 11 of this Law;

      14) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication);

      15) failure by the insurance holding company, a major participant in the insurance (reinsurance) company to comply with the requirements of the authorized body to increase the equity of the insurance (reinsurance) company, as well as the requirements imposed in accordance with paragraph 2 of Article 53-4 of this Law;

      16) non-compliance of the risks management and internal control system with the requirements of the authorized body.

      1-1. The license of the insurance (reinsurance) company may be suspended in all classes and for individual classes of insurance.

      2. Suspension of the license of the insurance (reinsurance) company entails a prohibition on the conclusion of the new insurance (reinsurance) contract by it, including the extension of the existing insurance (reinsurance) contracts and their changes, provided for the increase in insurance premiums, extent of the liability of the insurance (reinsurance) company, as well as the implementation of the insurance mediation as an insurance agent. The insurance (reinsurance) company shall meet its obligations under the previously concluded insurance (reinsurance) contracts.

      3. The decision to suspend the license shall contain the grounds and the period of suspension of the license.

      The license shall be considered as suspended from the date of bring such decision to the attention of the executive body of the licensee.

      Information on the decision to suspend the license shall be published on the Internet resource of the authorized body in the Kazakh and Russian languages.

      4. The requirements of subparagraph 2) of paragraph 1 of this Article shall not apply in respect of an insurance broker.

      Footnote. Article 54, as amended by the Laws of the Republic of Kazakhstan dated 11 June, 2003 No. 436, dated 23 December, 2005 No. 107 (the order of enforce see Art. 2 of the Law No. 107), dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2), dated 19 February, 2007 No. 230 (the order of enforcement see Art. 2), dated 7 May, 2007 No. 244, dated 23.10.2008 No. 72-IV (the order of enforcement see Art. 2), dated 28.08.2009 No. 192-IV (shall be enforced from 08.03.2010), dated 30.12.2009 No. 234-IV; dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 10.06.2014 No. 206-V (shall be enforced after ten calendar days after day of its first official publication); dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication); dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

Article 54-1. Transfer of the insurance portfolio in the conservation or revocation of the license

      1. Transfer of the insurance portfolio may be carried out by the temporary administration of the insurance (reinsurance) company on the stage of conservation or before the entry into force of a court decision on the compulsory liquidation of the insurance (reinsurance) company in order to improve its financial situation or protect the rights of policyholders.

      Transfer of the insurance portfolio to other insurance (reinsurance) company (insurance (reinsurance) companies) shall be allowed in the case of sufficient assets to secure the insurance contracts.

      The temporary administration shall notify the authorized body about the decision on the transfer of the insurance portfolio in case of conservation or deprivation of the license of the insurance (reinsurance) company.

      2. The temporary administration shall publish the announcement on the transfer of the insurance portfolio in two periodicals distributed throughout the territory of the Republic of Kazakhstan, in the Kazakh and Russian languages and on the Internet resource of the insurance (reinsurance) company no later than five working days from the date of notification of the authorized body on the decision to transfer the insurance portfolio.

      When transferring the insurance portfolio at the stage of conservation, the order, terms of submission of objections and addresses to which the objections of the insurants are accepted in case of their disagreement with the transfer of the insurance contract shall be specified in the announcement.

      3. At the stage of conservation, the temporary administration shall make a decision on partial (on one or several classes of insurance) or full transfer of the insurance portfolio with the consent of the insurant to transfer the insurance contract.

      The absence of a written objection of the policyholder within ten calendar days from the date of publication of the announcement shall be considered as consent of the policyholder to transfer the insurance portfolio.

      The temporary administration shall form a list of policyholders that agree to transfer the insurance portfolio within three calendar days from the date of the expiration of the period, established by the second part of this paragraph for the presentation of a written objection by the policyholder.

      4. At the revocation of the license of the insurance company, the transfer of the insurance portfolio shall be carried out without the consent of the policyholder in full.

      5. The order and features of the transfer of the insurance portfolio in conservation or revocation of the license of the insurance (reinsurance) company shall be determined by the regulatory legal acts of the authorized body.

      Footnote. Law is supplemented by Article 54-1, in accordance with the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2); as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 55. Revocation of the license of an insurance (reinsurance) company and an insurance broker

      1. The authorized body shall have the right to make the decision on the revocation of the license for one of the following grounds:

      1) failure to eliminate in the specified period, the circumstances, giving rise to the suspension of the license;

      2) repeated (twice in the last twelve months) suspension of the license;

      2-1) repeated (two or more times within twelve consecutive calendar months) failure to comply with the supervisory response measures applied by the authorized body;

      2-2) repeated (two or more times during the twelve consecutive calendar months) violations of the legislative acts of the Republic of Kazakhstan, regulating the compulsory types of insurance;

      2-3) repeated (two or more times during the twelve consecutive calendar months) non-compliance with the requirements of the prudential standards and other mandatory norms and limits, set by the legislation of the Republic of Kazakhstan;

      3) the court’s decision on the termination of the activities of the insurance (reinsurance) company or the insurance broker;

      4) failure to exercise the licensed activities by the insurance (reinsurance) company or the insurance broker within twelve months from the date of issuance of the license;

      5) is excluded by the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2);

      6 ) inconsistency of the final predicted results in the business plan, submitted by the insurance (reinsurance) company in the issuance of the permission for its creation with the changes and additions to it, either in the business plan for the class (classes) of insurance with the changes and additions to it by the actual final results of the insurance (reinsurance) company at the end of the period of execution of the business plan;

      7) violation of requirements, repeated within the last twelve consecutive months, stipulated by the legislation the Republic of Kazakhstan about counteraction of legalization (washing) of income gained in the criminal way and to terrorism financing for which the sanction in the form of suspension of the license on the bases provided by the subparagraph 11) of point 1 of article 54 of this Law was applied;

      8) participation of an insurance (reinsurance) company, an insurance broker in transactions, related to money laundering or financing of terrorism.

      1-1. The insurance company may be deprived of a license for all classes and for certain classes of insurance and (or) activities.

      2. The decision on the revocation of the license shall specify the ground of its revocation.

      3. The insurance (reinsurance) company that is revoked of a license, shall not be entitled to carry out the insurance or other activity, shall cease all operations on the existing bank accounts, with the exception of the operations, a list of which is determined by the authorized body.

      4. An insurance broker, that is revoked a license, shall not be entitled to carry out its activity, shall cease all operations on the existing bank accounts, except in cases related to the current maintenance costs, transfer of money flowing to the insurance broker.

      Footnote. Article 55, as amended by the Laws of the Republic of Kazakhstan dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004), dated 23.12.2005 No. 107 (the order of enforcement see Art. 2 of the Law No. 107), dated 20.02.2006 No. 128 (the order of enforcement see Art. 2), dated 12.01.2007 No. 222 (shall be enforced upon expiry of 6 months from the date of its official publication), dated 07.05.2007 No. 244, dated 28.08.2009 No. 192-IV (shall be enforced from 08.03.2010), dated 30.12.2009 No. 234-IV; dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2); dated 10.06.2014 No. 206-V (shall be enforced after ten calendar days after day of its first official publication); dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019); dated 02.04.2019 No. 241-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 55-1. Conservation of insurance (reinsurance) company

      Footnote. The title of Article 55-1 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

      1. Conservation of insurance (reinsurance) company is the forced conduct under the decision of the authorized body of the range of administrative, legal, financial, organizational, technical and other measures and procedures in respect of the insurance (reinsurance) company to the rehabilitation of its financial position and improvement of the quality of work.

      2. Insurance (reinsurance) company may be subject to conservation for any of the following grounds:

      1) failure to comply with the adequacy of the solvency margin;

      2) on the grounds, provided for in paragraph 1 of Article 54 of this Law.

      3. The establishment of conservation involves the appointment of the temporary administration by the authorized body for administering the insurance (reinsurance) company for a limited (up to one year) period of time.

      4. Conservation of insurance (reinsurance) company shall be funded at the expense of the insurance (reinsurance) company.

      5. The decision of the authorized body on the conservation may be appealed to the court by the shareholders of the insurance (reinsurance) company within ten days. Appeal of the decision shall not suspend the conservation of the insurance (reinsurance) company.

      Footnote. Law is supplemented by Article 55-1 in accordance with the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2); as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 55-2. Temporary administration for administering the insurance (reinsurance) company

      1. The temporary administration is appointed by authorized body from among his workers or other persons conforming to requirements, stipulated in Item 3 articles 34 of this Law.

      2. The rights and responsibilities, as well as the conditions of payment for the head and members of the temporary administration (except for the employees of the authorized body) shall be established by a separate agreement, concluded between the authorized body and the temporary administration.

      3. The temporary administration shall be governed by this Law, regulatory legal acts of the authorized body and other legislation of the Republic of Kazakhstan.

      4. The authorized body shall have the right to replace the members of the temporary administration at any time.

      5. The head and members of the temporary administration shall be liable for damage, caused by the insurance (reinsurance) company in accordance with the laws of the Republic of Kazakhstan. Laying on the head and members of the temporary administration the responsibility for any damage that may be classified as normal business risks shall not be allowed.

      Footnote. Law is supplemented by Article 55-2 in accordance with the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2); with the change made by the Law of the Republic of Kazakhstan dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016).

Article 55-3. The decision to conduct the conservation of the insurance (reinsurance) company

      1. The decision of the authorized body to conduct the conservation of the insurance (reinsurance) company shall contain:

      1) the name of the insurance (reinsurance) company and its location;

      2) justification of the decision on conservation of the insurance (reinsurance) company;

      3) beginning of the action and term of conservation;

      4) the list of restrictions of activity, imposed on the insurance (reinsurance) company;

      5) personnel of the temporary administration;

      6) instruction to the senior employees of the insurance (reinsurance) company which is in the conservation mode on preparation of the report on their work, the declaration on incomes, data on existence and sizes of property and submission of these documents to the temporary administration;

      7) recommendations of the temporary administration.

      2. The decision to conduct the conservation of the insurance (reinsurance) company shall be published by the authorized body in two periodicals distributed throughout the Republic of Kazakhstan, in the Kazakh and Russian languages and on the Internet resource of the authorized body.

      Footnote. The Law is supplemented by Article 55-3 in accordance with the Law of the Republic of Kazakhstan dated 15.07.2010 № 338-IV (the order of enforcement see Article 2); is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 № 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 55-4. Features of administering the insurance (reinsurance) company in the conservation period. Powers of the temporary administration for administering the insurance (reinsurance) company

      1. With the beginning of conservation and its term:

      1) the rights of the shareholders of the insurance (reinsurance) company on the use and disposal of shares, issued by the insurance (reinsurance) company shall be suspended;

      2) the powers of the bodies of the insurance (reinsurance) company shall be suspended and its executives shall be suspended from work;

      3) all powers to manage the insurance (reinsurance) company, as well as the rights of shareholders of the insurance (reinsurance) company for use the shares, issued by the insurance (reinsurance) company shall be moved to the temporary administration;

      4) all transactions, made on behalf of and at the expense of the insurance (reinsurance) company, without the knowledge and written consent of the temporary administration shall be deemed as invalid.

      2. The temporary administration shall have the right:

      1) to make decisions on all matters of the insurance (reinsurance) company in accordance with Article 55-5 of this Law;

      2) if necessary, to completely or partially suspend the obligations of the insurance (reinsurance) company under the concluded contracts of insurance during the conservation period;

      3) if necessary, to terminate the concluded by the insurance (reinsurance) company contracts, providing the investment of the insurance (reinsurance) company funds, or make the unilaterally changes and additions to them, including the change of rates, tariffs and expiry dates;

      4) to sign any contracts and documents on behalf of the insurance (reinsurance) company;

      5) to submit the claims on behalf of and in the interests of the insurance (reinsurance) company;

      6) to issue orders, including the orders of dismissal, demotion in a post or temporary suspension from office, the division of responsibilities between the employees of the insurance (reinsurance) company;

      7) to set off the mutual claims due to coincidence of the creditor and the debtor in one person;

      8) to transfer the insurance portfolio in part or in full, to other insurance (reinsurance) company in accordance with the regulatory legal acts of the authorized body.

      Footnote. Law is supplemented by Article 55-4 in accordance with the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2).

Article 55-5. Control over the activity of the temporary administration (temporary manager) of the insurance (reinsurance) company

      1. During the period of conservation of the insurance (reinsurance) company control over the activity of the temporary administration (temporary manager) of the insurance (reinsurance) company shall be carried out by the authorized body, which has the right to:

      1) make recommendations on the main directions of activity during the period of conservation of the insurance (reinsurance) company (propose a plan of main actions);

      2) give obligatory to execution written instructions;

      3) require the provision of information about its activities and the activities of the insurance (reinsurance) company;

      4) hear a report on the work done;

      5) extend the period of conservation;

      6) make a decision on the completion of the conservation of the insurance (reinsurance) company.

      2. Specifics of activity of the temporary administration (temporary manager) of the insurance (reinsurance) company and principles of its relationship with third parties shall be determined by regulatory legal acts of the authorized body.

      Footnote. The Law is supplemented by Article 55-5 in accordance with the Law of the Republic of Kazakhstan dated 15.07.2010 № 338-IV (the order of enforcement see Article 2); is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 № 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 55-6. Termination of conservation

      1. Conservation of the insurance (reinsurance) company shall be terminated on the following grounds:

      1) the expiration of the conservation period, established by the decision of authorized body;

      2) the adoption of the decision on the early termination of conservation by the authorized body.

      2. Termination of conservation of the insurance (reinsurance) company (including the early termination) in connection with the recovery of the financial position and improvement of the quality of work entails the abolition of all restrictions with respect to this insurance (reinsurance) company, established by the authorized body or the temporary administration. The changes and additions, made during the conservation period in the constituent documents, the governing bodies and the composition of the insurance (reinsurance) company shall remain in force.

      3. If conservation of the insurance (reinsurance) company does not lead to rehabilitation of its financial position and improvement of the quality of work, the authorized body shall have the right to revoke a license to engage in insurance activities, reinsurance activity on the grounds, stipulated by this Law.

      Footnote. Law is supplemented by Article 55-6 in accordance with the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2).

Article 56. Consequences of withdrawal of the license of the insurance entities and insurance broker

      1. The decision on deprivation of licenses of the subjects of insurance activity and the insurance broker shall enter into force from the date of its adoption by the authorized body. Information on the taken decision on deprivation the license shall be published on the Internet resource of the authorized body in the Kazakh and Russian languages.

      2. The authorized body shall apply to the court for the compulsory termination of the activity (liquidation) of the insurance broker in accordance with legislation within fifteen days from the date of withdrawal of the license.

      3. The authorized body shall appoint the temporary administration of the insurance (reinsurance) company from the date of entry into force of the decision on the withdrawal of the license and the powers of all bodies of the insurance (reinsurance) company shall transfer to it.

      Powers of the previously existing bodies of the insurance (reinsurance) company shall be suspended. Shareholders of the insurance (reinsurance) companies shall have the right to appeal the decision on withdrawal of the license in court.

      3-1. Temporary administration of the insurance (reinsurance) company within ten working days from the date of deprivation of the license of the insurance (reinsurance) company operating in the sector "general insurance", shall take a decision to transfer the insurance portfolio in the manner prescribed by Article 54-1 of this Law and the regulatory legal act of the authorized body.

      Temporary administration of the insurance company within two working days from the date of deprivation of the license of the insurance company, carried out activities in the sector of "life insurance" shall:

      form and transfer to the organization, guaranteeing implementation of insurance payments to the insurants (insured, beneficiaries) in case of compulsory liquidation of insurance companies, the registries of annuity insurance contracts of an insurance company, being liquidated from the databases of the organization for formation and maintenance of the database and insurance company, being liquidated for annuity classes of insurance for which the guarantee is provided in accordance with subparagraph 1) of paragraph 2 of Article 15-1 of the Law of the Republic of Kazakhstan "On Insurance Payments Guarantee Fund";

      publish the announcement on implementation by the organization, guaranteeing implementation of insurance payments to the insurants (insured, beneficiaries) in case of compulsory liquidation of insurance companies, of guarantee payments on annuity classes of insurance. The announcement about the guarantee payments for annuity classes of insurance shall be published in two periodicals distributed throughout the territory of the Republic of Kazakhstan, in the Kazakh and Russian languages and on the Internet resource of the insurance company.

      The authorized body after the transfer by the temporary administration of the insurance (reinsurance) company of the insurance portfolio or rejection of its decision to transfer the insurance portfolio in the period, established by the first part of this paragraph, shall apply to the court for compulsory termination of the activity (liquidation) of the insurance (reinsurance) company in manner established by the legislation of the Republic of Kazakhstan.

      4. The temporary administration shall carry out its activities in the period before the appointment of the liquidation commission of the insurance (reinsurance) company by the authorized body.

      Control over the activities of the temporary administration of the insurance (reinsurance) company shall be carried out by the authorized body before the appointment of the liquidation commission of the insurance (reinsurance) company.

      For the purpose of activity control of temporary administration the authorized body has the right at identification in activity of temporary administration of requirement violations of the legislation of the Republic of Kazakhstan, the rights and legitimate interests of creditors to take out written instructions, obligatory for execution by temporary administrations, about elimination established violations and (or) the reasons and also conditions promoting their commission, at the scheduled time and (or) representation at the scheduled time of the actions plan.

      In the actions plan submitted in time, established by the written instruction, descriptions of violations, the reasons which led to their emergence, the list of the planned actions, terms of their implementation and also responsible officials are specified.

      The appeal of the written instruction of authorized body in court does not stop his execution.

      5. Report of the temporary administration (temporary manager) of the insurance (reinsurance) company on the executed work shall be submitted to the authorized body for approval.

      Acceptance-transfer of documents and property of the insurance (reinsurance) company from the temporary administration to the chairman of the liquidation commission shall be executed by ??an act that is made in four copies. One copy of the acceptance-transfer act shall be sent to the authorized body, the other – to the court, ordered the liquidation of the insurance (reinsurance) company.

      6. The temporary administration of the insurance (reinsurance) company shall not be entitled to carry out debit transactions, except as provided for in paragraph 3 of Article 55 of this Law during its activity.

      7. The operating procedure of the insurance (reinsurance) organization, appointment of her temporary administration (the interim administrator), powers of temporary administration (the interim administrator) and also an order, forms and terms of providing by temporary administration (the interim administrator) of the reporting and other information in authorized body are defined by regulatory legal acts of authorized body.

      8. It is prohibited to financing by the authorized body of expenses on termination of activity of insurance (reinsurance) companies on the grounds of compulsory liquidation, except for the expenses connected with payment of work of employees of the authorized body included in the structure of temporary administration (temporary administrator) of the insurance (reinsurance) company and liquidation commission, and also of expenses on publication in official periodicals of the central body of justice of information on the decision made by the court on compulsory liquidation of the insurance (reinsurance) company and the expenses connected with state registration of termination of activity of the insurance (reinsurance) company on the ground of compulsory liquidation by the Corporation, and delivery of documents for storage in the archive after the liquidation of the insurance (reinsurance) company in the absence of the property of the insurance (reinsurance) company or if its value is insufficient to cover these costs.

      Footnote. Article 56, as amended by the Laws of the Republic of Kazakhstan dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004), dated 20.02.2006 No. 128 (the order of enforcement see Art. 2), dated 12.01.2007 No. 222 (shall be enforced upon expiry of 6 months from the date of its official publication), dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016); dated 02.07.2018 № 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 № 168-VI (shall be enforced from 01.01.2019); dated 02.04.2019 № 241-VI (shall be enforced from 01.07.2019).

Article 57. Suspension of a license of the authorized auditor

      (Is excluded by the Law of the Republic of Kazakhstan dated 5 May, 2006 No. 139 (the order of enforcement see Art. 2 of the Law of the Republic of Kazakhstan No. 139)

Article 58. Withdrawal of a license of the authorized auditor

      (Is excluded by the Law of the Republic of Kazakhstan dated 5 May, 2006 No. 139 (the order of enforcement see Art. 2 of the Law of the Republic of Kazakhstan No. 139).

Article 59. Suspension of the actuary license

      1. The validity of the actuary's license may be suspended by the authorized body for a period of up to three months on one of the following grounds:

      1-1) failure to comply with the requirements of supervisory response measures applied by the authorized body, and other requirements of the authorized body;

      1-2) failure to comply with the requirements of paragraph 4 of Article 40 of this Law;

      2) implementation of actuarial activities in violation of the legislation of the Republic of Kazakhstan on insurance and insurance activities;

      3) establishment of the fact of providing unreliable information in the documents sent to the authorized body, including those that were the grounds for the issuance of a license;

      4) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication);
      5) is excluded by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication);

      6) if the actuary did not pass the exams on the minimum mandatory training program of actuaries approved by the regulatory legal act of the authorized body within the terms established by the authorized body.

      2. The decision to suspend the license shall specify the grounds and the period of the license suspension. The license shall be deemed as suspended from the date of bringing such a decision to the licensee.

      Information on the decision to suspend the actuary's license shall be published on the Internet resource of the authorized body in the Kazakh and Russian languages.

      Footnote. Article 59, as amended by the Laws of the Republic of Kazakhstan dated 23.12.2005 No. 107 (the order of enforcement see Art. 2 of the Law No. 107), dated 20.02.2006 No. 128 (the order of enforcement see Art. 2), dated 19.02.2007 No. 230 (the order of enforcement see Art. 2), dated 30.12.2009 No. 234-IV (shall be enforced from 01.01.2012), dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 No. 168-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 60. Withdrawal of the actuary license

      1. The authorized body shall have the right to decide on the withdrawal of the license for one of the following grounds:

      1) failure to remove the circumstances in a timely manner, that giving rise to the suspension of the license;

      2) repeated (twice in the last twelve months) suspension of the license;

      3) disclosure or transfer to third parties (except the authorized body) the data obtained in the course of actuarial calculations, as well as acting as an independent actuary and those that are the subject of security secrets or commercial secrets;

      4) failure to meet the requirements of paragraph 6 of Article 19 of this Law;

      5) the court decision on the termination of entrepreneurial activity of an actuary.

      2. The decision on the withdrawal of the license shall specify the ground of its withdrawal. Licensee shall be deemed to be withdrawing of the license from the date of bringing such a decision to the licensee.

      Footnote. Article 60, as amended by the Laws of the Republic of Kazakhstan dated 12 January, 2007 No. 222 (shall be enforced upon expiry of 6 months from the date of its official publication), dated 15.07.2010 No. 338-IV (shall be enforced from 01.01.2012).

Article 61. Compulsory redemption of shares

      1. Upon establishment by the authorized body at the insurance (reinsurance) company of a negative difference between the value of assets calculated taking into account their classification by quality and liquidity, and obligations, the authorized body shall have the right to make a decision on compulsory redemption of shares of the insurance (reinsurance) company from its shareholder (shareholders) and sell them to a new investor (investors), who wished to purchase them on the terms that guarantee the performance by the latter of all obligations under the insurance and reinsurance contracts.

      2. The compulsory redemption by the authorized body of shares of the insurance (reinsurance) company shall be carried out at a price determined on the basis of the size of its actual solvency margin on the date of its decision on the compulsory redemption of shares of the shareholder of the insurance (reinsurance) company for the purpose of their subsequent sale to a new investor (investors).

      3. Sale of the redeemed shares of the insurance (reinsurance) company shall be made by the authorized body at the price of their purchase.

      The rights and obligations of the owners of all compulsory redeemable shares of the insurance (reinsurance) company shall be transferred to a new investor (investors).

      4. The procedure for compulsory redemption of shares of the insurance (reinsurance) company and their subsequent sale to a new investor (investors) shall be established by the authorized body.

      Footnote. Article 61 is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 11. Reorganization

Article 62. Voluntary reorganization of the insurance (reinsurance) company and insurance holding company

      1. Voluntary reorganization (merger, consolidation, split-up, spin-off, transformation) of the insurance (reinsurance) company (insurance holding company) shall be carried out in accordance with the legal acts of the Republic of Kazakhstan with the specifications, established by this Law and the regulatory legal acts of the authorized body.

      2. Voluntary reorganization of the insurance (reinsurance) company (insurance holding company) can be carried out with the permission of the authorized body.

      The insurance (reinsurance) company shall, within one week return all the previously issued licenses to the authorized body in obtaining the permission for voluntary reorganization into a legal entity, not carrying out the insurance activities.

      3. The ground for filing an application for permission to conduct a voluntary reorganization of the insurance (reinsurance) company (insurance holding company) shall be a decision of the general meeting of shareholders (participants) of the insurance (reinsurance) company (insurance holding company).

      4. An application for permission of the authorized body to conduct the voluntary reorganization of the insurance (reinsurance) company ( insurance holding company) shall be accompanied by the following documents:

      1) decision of the supreme body of the insurance (reinsurance) company (insurance holding company) on its voluntary reorganization;

      2) documents, describing the assumed conditions, forms, procedures and terms of voluntary reorganization of the insurance (reinsurance) company (insurance holding company);

      3) financial forecast for consequences of the voluntary reorganization, including the balance of payments of the insurance (reinsurance) company (insurance holding company) after its voluntary reorganization and (or) legal entities, formed as a result of the voluntary reorganization of the insurance (reinsurance) company (insurance holding company).

      5. Application for permission to conduct the voluntary reorganization of the insurance (reinsurance) company (insurance holding company) shall be considered by the authorized body within two months from the date of submission of all required documents.

      6. The reorganized insurance (reinsurance) company (insurance holding) within two weeks from the date of receipt of the permit of the authorized body to conduct reorganization, shall be obliged to inform about the forthcoming changes all its insurants by direct notification and publication of the corresponding announcement not less than in two periodicals, distributed throughout the territory of the Republic of Kazakhstan, in the Kazakh and Russian languages and on the Internet resource of the insurance (reinsurance) company.

      7. State registration or re-registration of the legal entities, formed as a result of the reorganization shall be carried out, in accordance with the legislative acts of the Republic of Kazakhstan.

      8. The procedure for issuing the permission for voluntary reorganization of the insurance (reinsurance) company (insurance holding company) or refusal to issue this permission shall be determined by the regulatory legal act of the authorized body.

      9. The requirements of this article shall not apply to non-residents of the Republic of Kazakhstan that are an insurance holding company, a person with characteristics of the insurance holding company, subject to one of the following conditions:

      availability of an individual credit rating not lower than A rated of one of the rating agencies, the list of which is established by the authorized body, and a written confirmation from the financial supervision authority of the country of origin of the insurance holding company, the person having the characteristics of the insurance holding company, that these non-residents of the Republic of Kazakhstan shall be subject to the consolidated supervision;

      existence of an agreement between the authorized body and the relevant supervisory authority of the foreign state on information exchange, as well as the minimum required rating of one of the rating agencies. Minimum rating and list of rating agencies shall be established by the regulatory legal act of the authorized body.

      Footnote. Article 62 is in the wording of the Law of the Republicio of Kazakhstan dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication), as amended by the Law of the Republic of Kazakhstan dated 26.12.2012 No. 61-V (shall be enforced from 04.02.2012); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 63. Refusal to issue a permission for voluntary reorganization

      1. Refusal to issue a permission for voluntary reorganization of the insurance (reinsurance) company (insurance holding company) shall be made by the authorized body for the following reasons:

      1) breach of the legitimate interests of policyholders and other creditors as a result of the assumed voluntary reorganization;

      2) violation of the minimum conditions to ensure the financial sustainability and other mandatory norms and limits and other requirements, established by this Law and the regulatory legal acts of the authorized body as a result of the assumed reorganization;

      2-1) absence of the relevant decisions of the supreme bodies of the reorganized insurance (reinsurance) companies (insurance holding companies);

      2-2) violation as a result of expected requirement reorganization of the legislation of the Republic of Kazakhstan in the protection field of the competition;

      3) non-elimination of comments of the authorized body on the submitted documents within the period established by it;

      4) inconsistency of the submitted documents with the legislation of the Republic of Kazakhstan.

      2. The authorized body shall notify the applicant on the refusal to issue the permission for its voluntary reorganization with indication of the reasons.

      Footnote. Article 63, as amended by Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 29.10.2015 No. 376-V (shall be enforced dated 01.01.2016); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 64. Specific aspects of the forced reorganization of the insurance (reinsurance) company

      Footnote. Article is excluded by the Law of the Republic of Kazakhstan dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2).

Chapter 12. Liquidation

Article 65. Types and grounds for liquidation of insurance (reinsurance) company

      1. Liquidation of the insurance (reinsurance) company, including on the ground of bankruptcy, shall be carried out in accordance with this Law and other regulatory legal acts of the Republic of Kazakhstan.

      2. Insurance (reinsurance) company may be liquidated on the following grounds:

      1) by the decision of its shareholders with the permit of the authorized body (voluntary liquidation);

      2) by the court decision in cases provided by the legislation of the Republic of Kazakhstan (compulsory liquidation).

      Footnote. Article 65 as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 66. The creditors’ committee of the voluntarily and compulsorily liquidated insurance (reinsurance) companies

      1. The committee of creditors shall be created in order to ensure the interests of creditors and making the decision with their participation in the procedures for voluntary and compulsory liquidation of the insurance (reinsurance) company.

      The committee of creditors of the liquidated insurance (reinsurance) company shall be approved by the authorized body by the representation of the liquidation commission of the insurance (reinsurance) company.

      2. Features of formation and activities of the creditors’ committee shall be established by the regulatory legal acts of the authorized body.

      Footnote. Article 66, as amended by the Law of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004).

Article 67. Specific aspects of voluntary liquidation of the insurance (reinsurance) company

      1. After adoption the decision by the general meeting of shareholders of the insurance (reinsurance) company for its voluntary liquidation, the insurance (reinsurance) company shall take measures for the transfer of the insurance portfolio, consisting of the obligations of the insurance (reinsurance) company for the concluded insurance (reinsurance) contracts to another insurance (reinsurance) company, having the license to the transmitted insurance classes and that is a member of the guarantee insurance payments.

      The procedure for issuing the permission for voluntary liquidation of the insurance (reinsurance) companies or refusal to issue this permission, as well as the order of transfer of the insurance portfolio shall be determined by the regulatory legal act of the authorized body.

      After the transfer of the insurance portfolio, the insurance (reinsurance) company shall have the right to apply to the authorized body with the application for the permission for its voluntary liquidation.

      2. Application for the permission to conduct the voluntary liquidation shall be accompanied by the documents, the list of which is determined by the regulatory legal acts of the authorized body.

      3. Application for the permission to conduct the voluntary liquidation of the insurance (reinsurance) company shall be considered by the authorized body within two months from the date of receipt of all required documents.

      4. After obtaining a permit for voluntary liquidation, the insurance (reinsurance) company shall be obliged to return the license and (or) the appendix to the license to the authorized body within ten working days.

      5. After obtaining a permit of the authorized body for voluntary liquidation, the insurance (reinsurance) company shall create a liquidation commission, to which the powers to manage the property and affairs of the insurance (reinsurance) company shall be transferred in accordance with the procedure established by the legislation of the Republic of Kazakhstan.

      6. The liquidation commission of the voluntarily liquidated insurance (reinsurance) company shall provide the authorized body on its request any data about its activities and data, relating to the liquidated insurance (reinsurance) company.

      7. The liquidation commission shall be obliged within ten calendar days from the date of approval by the general meeting of shareholders of the report on liquidation and liquidation balance of the insurance (reinsurance) company, to submit them to the Corporation and the authorized body.

      8. If funds are insufficient to satisfy the claims of creditors, the insurance (reinsurance) company shall be subject to compulsory liquidation on the grounds of bankruptcy.

      9. Control over the activities of the liquidation commission of the voluntarily liquidated insurance (reinsurance) company shall be carried out by the authorized body.

      Specific aspect of the activities of the liquidation commission of the voluntarily liquidated insurance (reinsurance) company shall be determined by regulatory legal acts of the authorized body.

      10. Due to the impossibility of completion of the voluntary liquidation of the insurance (reinsurance) company, the authorized body shall have the right to apply to the court for its compulsory liquidation.

      Footnote. Article 67, as amended by the Laws of the Republic of Kazakhstan dated 10 July, 2003 No. 483 (shall be enforced from 1 January, 2004), dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2), dated 23.10.2008 No. 72-IV (the order of enforcement see Art. 2), dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication), dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 № 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.04.2019 № 241-VI (shall be enforced from 01.07.2019).

Article 68. Refusal to issue the permission for voluntary liquidation

      1. Refusal to issue the permission for voluntary liquidation of the insurance (reinsurance) company shall be made ??by the authorized body for the following reasons:

      1) breach of the legitimate interests of policyholders and other creditors as a result of the assumed voluntary liquidation;

      2) non-elimination of comments of the authorized body on the submitted documents within the period established by it;

      3) inconsistency of the submitted documents with the legislation of the Republic of Kazakhstan;

      4) insufficiency of funds of the insurance (reinsurance) company to settle its obligations;

      5) failure to take measures to transfer the insurance portfolio to another insurance (reinsurance) company.

      2. The authorized body shall notify the applicant of the refusal to issue the permission for its voluntary liquidation, with indication of the reasons.

      Footnote. Article 68, as amended by Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 69. Specific aspects of compulsory liquidation of the insurance (reinsurance) company

      1. Temporary administration shall lay down its powers and transfer the documents and property of the insurance (reinsurance) company to the chairman of the liquidation commission within a period not exceeding a month. If the compulsorily liquidated insurance company is a member of the guarantee insurance payments, the temporary administration shall provide to the organization that guarantees the insurance payments to policyholders (insured persons, beneficiaries) in the case of compulsory liquidation of the insurance company, the information in the amount and timing, that are provided by the regulatory legal act of the authorized body.

      2. From the date of withdrawal of the insurance (reinsurance) company license:

      1) founders (participants) of the insurance (reinsurance) company shall not have the right to dispose of property of the insurance (reinsurance) company;

      2) execution of previous decisions of courts in respect of the liquidated insurance (reinsurance) company shall be suspended;

      3) creditors ' claims to the liquidated insurance (reinsurance) company may be presented in the liquidation proceedings, except for the requirements related to the costs provided for in paragraph 3 of Article 55 of this Law, as well as during the period of guarantee payments for annuity classes of insurance in the cases provided for by the Law of the Republic of Kazakhstan "On Insurance Payments Guarantee Fund";

      4) recovery of money from the bank accounts of the insurance (reinsurance) company under the requirements of creditors, bodies of state revenues, including those subject to the satisfaction in indisputable (acceptance-free) procedure, as well as foreclosure on the property of the insurance (reinsurance) company shall not be allowed;

      5) alienation of the belonging them shares of the insurance (reinsurance) company shall be prohibited to the shareholders of the insurance (reinsurance) company;

      6) executives, and if necessary, other employees shall be suspended from work in accordance with the labour legislation of the Republic of Kazakhstan.

      3. In the case of compulsory liquidation of the insurance (reinsurance) company the court shall notify the authorized body and within ten calendar days send it a copy of the decision on the compulsory liquidation of the insurance (reinsurance) company.

      3-1. From the date of entry into force of the court decision on the compulsory liquidation of the insurance (reinsurance) company, the powers of the previously existed bodies of the insurance (reinsurance) company shall be terminated, the executives and if necessary, other employees shall be dismissed in the manner prescribed by the labour legislation of the Republic of Kazakhstan.

      3-2. From the date of entry into force of the court decision on the compulsory liquidation of the insurance (reinsurance) company, the consequences provided for in subparagraphs 1) -5) of paragraph 2 of this Article shall occur.

      4. If the court makes the decision on the compulsory liquidation of the insurance (reinsurance) company on the grounds, not involving the withdrawal of the licenses by the authorized body, the authorized body shall consider the question of withdrawing its license in the manner, prescribed by the legislation of the Republic of Kazakhstan.

      5. excluded by the Law of the Republic of Kazakhstan dated 07.03.2014 No. 177-V (shall be enforced after ten calendar days after day of its first official publication).
      Footnote. Article 69 is in the wording of the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), as amended by the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 07.03.2014 No. 177-V (shall be enforced after ten calendar days after day of its first official publication); dated 07.11.2014 No. 248-V (shall be enforced after ten calendar days after day of his first official publication); dated 28.11.2014 No. 257 (an order of enforcement see subitem 12) Art. 10); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 69-1. Transfer of the insurance portfolio from the date of entry into force of the court decision on the compulsory liquidation of the insurance ( reinsurance) company

      1. From the date of entry into force of the court decision on the compulsory liquidation of the insurance (reinsurance) company, the liquidation commission of the compulsorily liquidated insurance (reinsurance) company shall transfer the insurance portfolio without the consent of the policyholder for the guaranteed types of insurance, included in the system to guarantee the insurance payments, in full.

      The measures, provided for in this Article shall be made within three months from the date of entry into force of the court decision on the compulsory liquidation of the insurance (reinsurance) company.

      2. Insurance portfolio of the compulsorily liquidated insurance (reinsurance) company may be transferred by the liquidation commission of the compulsorily liquidated insurance (reinsurance) company to one or several insurance (reinsurance) companies with a license for the guaranteed type of insurance and (or) under the reinsurance, and in accordance with its (their) requirements, established by the regulatory legal act of the authorized body.

      Transfer of the insurance portfolio shall be carried out at the expense of the organization, guaranteeing the insurance payments to policyholders (insured persons, beneficiaries) in the compulsory liquidation of the insurance company under the insurance contracts.

      2-1. If none of the insurance companies operating in the field “life insurance” does not correspond to the requirements, established by the regulatory legal act of the authorized body, or none of the insurance companies, operating in the field “life insurance” does not declare the intentions to take the insurance portfolio of the compulsorily liquidated insurance company, the transfer of the insurance portfolio shall be carried out by the insurance company, operating in the field “life insurance”, with the participation of the state.

      3. Insurance contracts, for which the obligations of the compulsorily liquidated insurance (reinsurance) company for insurance payments of the insured events are occurred, the occurrence of which is announced and for which the insurance payments are not made or not made in full, shall not be included in the transmitted insurance portfolio.

      In the absence of the insurance contract in the register of insurance contracts and (or) database of the compulsorily liquidated insurance (reinsurance) company, a policyholder under the insurance contract, concluded with the compulsorily liquidated insurance company (original, copy, duplicate), the validity of which has not expired, shall apply to the liquidation commission of the compulsorily liquidated insurance (reinsurance) companies with the right to claim a part of the insurance premium in proportion to the remaining period of time, during which the contract shall be valid.

      At the same time the insurance contract, concluded with the compulsorily liquidated insurance (reinsurance) company shall be prematurely terminated on the basis of the application to refund the insurance premium, submitted by a policyholder to the liquidation commission of the compulsorily liquidated insurance (reinsurance) company.

      The provisions of this paragraph shall not apply to the cases of transfer of the insurance portfolio under annuity classes of insurance by an organization guaranteeing implementation of insurance payments to the insurants (insured, beneficiaries) in the case of compulsory liquidation of insurance companies.

      4. From the date of transmission (reception) of the insurance portfolio of the compulsorily liquidated insurance (reinsurance) company, the obligations, arising under the received insurance contracts shall be performed by the received insurance (reinsurance) company (received insurance (reinsurance) companies).

      The transmitted insurance contract shall be valid until the end of the period, specified in it.

      Conclusion of a new insurance contract with policyholders of the compulsorily liquidated insurance (reinsurance) company or making changes in the insurance contract, concluded with policyholders of the compulsorily liquidated insurance (reinsurance) company, shall not be required.

      5. The announcement on the transfer of the insurance portfolio shall be published by the liquidation commission of the compulsory liquidated insurance (reinsurance) company in periodicals distributed throughout the Republic of Kazakhstan, in the Kazakh and Russian languages and on the Internet resource of the insurance (reinsurance) company within five working days from the date of acceptance by the insurance (reinsurance) company (insurance (reinsurance) companies) of the insurance portfolio of the compulsory liquidated insurance (reinsurance) company.

      The announcement shall include the information about:

      1) the date of transfer of the insurance portfolio;

      2) the name of the insurance (reinsurance) company (insurance (reinsurance) companies) that take the insurance portfolio of the compulsorily liquidated insurance (reinsurance) company, and the location with the contact phone numbers;

      3) the location of the liquidation commission of the compulsorily liquidated insurance company and organization, guaranteeing the insurance payments to policyholders (insured persons, beneficiaries) under the compulsory liquidation of the insurance company, with the contact phone numbers.

      6. The order and features of transfer of the insurance portfolio from the date of entry into force of the court decision on the compulsory liquidation of the insurance (reinsurance) company shall be established by the regulatory legal act of the authorized body.

      Footnote. Law is supplemented by Article 69-1 in accordance with the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), as amended by the Law of the Republic of Kazakhstan dated 21.06.2013 No. 106-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 70. The liquidation commission of the compulsorily liquidated insurance (reinsurance) company

      1. After deciding on the liquidation of the insurance (reinsurance) company, including the reason of bankruptcy, the court shall initiate the liquidation proceedings and assign the duty to the authorized body to establish the liquidation commission of the insurance (reinsurance) company with regard to its branches and representative offices.

      The procedure for appointment and dismissal of the liquidation commission of the compulsorily liquidated insurance (reinsurance) companies and the requirements for the chairman and members of the liquidation commission shall be determined by regulatory legal acts of the authorized body.

      The rights and obligations of the chairman and a member of the liquidation commission, including the right to compensation, the amount of powers to manage the affairs and property of the compulsorily liquidated insurance (reinsurance) company shall be governed by the regulatory legal acts of the authorized body and the agreement, concluded between it and the creditors’ committee, subject to the requirements established by the legislation of the Republic of Kazakhstan.

      1-1. The liquidation commission of the liquidated insurance (reinsurance) company may be required to recognize the transaction concluded by the insurance (reinsurance) company within one year prior to the deprivation of its license, invalid by the court on the following grounds:

      1) unequal counter-performance of obligations by the other party:

      if the transaction price and (or) its other terms differ significantly in the worst part for the insurance (reinsurance) company from the price and (or) other terms under which similar transactions are made in comparable circumstances;

      if the market value of the property transferred by the insurance (reinsurance) company or other performance of obligations performed by it significantly exceeds the cost of the received counter performance of obligations determined taking into account the terms and circumstances of such counter performance of obligations;

      if the transaction was made free of charge or in respect of a person connected with an insurance (reinsurance) company by special relations, in violation of the requirements of the legislation of the Republic of Kazakhstan;

      2) commission by the insurance (reinsurance) company of calculations in relation to a separate creditor or other person, which entailed the provision of preference to one of creditors before other creditors in satisfaction of claims, if the transaction resulted in satisfaction of requirements of one creditors, the deadline of which at the time of transaction has not occurred, in the presence of not executed obligations before other creditors in due time.

      The limitation period for disputes related to the invalidity of transactions concluded by the insurance (reinsurance) company within one year before the deprivation of its license is five years from the date of their reveal.

      In case of invalidation of the transaction, the consequences of invalidity of the transaction established by the Civil code of the Republic of Kazakhstan (General part) shall be applied.

      2. The interim liquidation balance sheet and the register of creditors’ requirements of the liquidated insurance (reinsurance) company shall be approved by the authorized body.

      3. The liquidation commission of the liquidated insurance (reinsurance) company shall provide reports on its work to the authorized body and on its written request for the additional information, data about its activities and data, relating to the liquidated insurance (reinsurance) company.

      4. The liquidation bankruptcy assets of the insurance (reinsurance) company shall be formed in the order, established by the legislation of the Republic of Kazakhstan, with the specifications established by this Law.

      Monthly amount of remuneration paid to the chairman, members of the liquidation commission of the insurance (reinsurance) company and other attracted employees shall not exceed for each of them ten times of the amount of the minimum wage, established to the corresponding financial year by the law on the republican budget.

      Sale of assets of the liquidated insurance (reinsurance) company shall be made by the liquidation commission in the manner, specified by the regulatory legal acts of the authorized body.

      Control over the activities of the liquidation commission of the insurance (reinsurance) company shall be carried out by the authorized body.

      5. The liquidation commission shall submit to the court the agreed with the authorized body report on the liquidation and the liquidation balance.

      Court shall approve the report of liquidation and the liquidation balance and make a ruling on the completion of the liquidation proceedings.

      The liquidation commission shall send a copy of the court ruling to the Corporation as well as to the authorized body.

      The liquidation commission shall be obliged within thirty calendar days after the approval of the liquidation balance sheet and the liquidation report to submit them to the Corporation, and copies of these documents – to the authorized body.

      Order of liquidation and requirements to the liquidation commission of the compulsorily liquidated insurance (reinsurance) company shall be determined by the regulatory legal acts of the authorized body.

      Upon completion of the liquidation of the insurance (reinsurance) company, the liquidation commission shall in the prescribed manner pass the documents to the archive and notify the authorized body about it.

      6. Is excluded by the Law of the Republic of Kazakhstan dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004).

      7. After registration of the termination of the insurance (reinsurance) company, the liquidation commission shall, within five business days, submit a copy of the order for registration of the termination of the insurance (reinsurance) company to the authorized body.

      Footnote. Article 70, as amended by the Laws of the Republic of Kazakhstan dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004), dated 20.02.2006 No. 128 (the order of enforcement, see Art. 2), dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication), dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 № 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.04.2019 № 241-VI (shall be enforced from 01.07.2019).

Article 71. Recognition of insurance (reinsurance) company as bankrupt

      1. Insolvency of the insurance (reinsurance) organization is established taking into account the conclusion of the authorized body brought into court, made taking into account a method of calculation of prudential standards and other regulations and limits, obligatory to observance, the size of the capital of the insurance (reinsurance) organization, including presence at the insurance (reinsurance) organization of the monetary commitments and other requirements of monetary character which are not performed by the insurance (reinsurance) organization within three and more months from the moment of approach of term of their execution.

      The insurance (reinsurance) organization is insolvent at her inability to fulfill monetary commitments and other requirements of monetary character within three months from the moment of approach of term of their execution.

      2. Rehabilitation procedures for insurance (reinsurance) company may be assigned by the court in the presence of the appropriate conclusion of the authorized body.

      3. Rehabilitation procedures for insurance (reinsurance) company may be in the form of financial rehabilitation or in the form of transfer of insurance liabilities and their corresponding amount of assets to the concerned insurance (reinsurance) companies through a public auction, conducted in accordance with the procedure established by the legislation of the Republic of Kazakhstan.

      4. Insurance (reinsurance) company may be declared as bankrupt by the court only in the manner prescribed by the legislation. Extrajudicial liquidation procedure of the insolvent insurance (reinsurance) company under the decision of its creditors and the insurance (reinsurance) company shall not be permitted.

      5. Conclusion of a settlement agreement by the parties shall not be permitted in the bankruptcy case of the insurance (reinsurance) company.

      Footnote. Article 71 with the change made by the Law of the Republic of Kazakhstan dated 07.03.2014 No. 177-V (shall be enforced after ten calendar days after day of its first official publication).

Article 72. Priority of creditors of the insurance (reinsurance) company

      1. Claims of creditors of the insurance company, recognized in the manner, established by the legislation, shall be satisfied in the following order:

      1) first of all, the claims of the creditors on insurance payments for insurance cases that occurred before the entry into force of the court decision on liquidation of the insurance company shall be satisfied;

      1-1) in the second, the claims for payment of withheld wages, and (or) other maintenance income, as well as the demands of citizens to whom the liquidated insurance company is responsible for damage to life or health, through the capitalization of the corresponding time payments on the grounds, not related to the liability under the insurance contracts, shall be satisfied;

      Note of the RCLI!
      Sub-paragraph 2) is provided to change by the Law of the Republic of Kazakhstan dated 02.08.2015 No. 342-V (shall be enforced from 01.01.2020).

      2) in the third, the calculations on payment of wages and compensation to persons, who worked under an employment contract, outstanding social contributions to the State Social Insurance Fund, payment of mandatory pension contributions withheld from wages, as well as royalties under the copyright contracts shall be paid;

      3) in the fourth stage, the claims of creditors under the insurance contracts, related to the insured person shall be satisfied;

      4) in the fifth stage, the claims of creditors - individuals under the contracts, concluded by them on property insurance and other types of insurance, not related to the insured person, shall be satisfied;

      5) in the sixth place, the claims of the creditors under concluded insurance contracts other than those specified in subparagraphs 3) and 4) of this paragraph, as well as the requirements of the organization guaranteeing implementation of insurance payments to the insurants (insured, beneficiaries) in case of compulsory liquidation of insurance companies, under insurance contracts, on the implemented guarantee payments, expenses related to the payment of the insurance portfolio of the compulsory liquidated insurance company transferred to another insurance company shall be satisfied in the manner and on the terms, provided by the legislation of the Republic of Kazakhstan on insurance and insurance activities, and other expenses related to their implementation;

      6) in the seventh stage, the claims of creditors under the obligations, secured by a pledge of assets of the liquidated insurance company within the amount of security, shall be satisfied;

      7) in the eighth stage, the liabilities for taxes, duties and other obligatory payments to the budget, as well as the repayment of loans, granted from the republican budget shall be paid;

      8) in the ninth stage, the settlements with other creditors shall be carried out in accordance with the legislative acts of the Republic of Kazakhstan.

      2. Costs, associated with the liquidation procedure of the insurance (reinsurance) company shall be paid out of turn.

      3. Claims of creditors of the reinsurance companies, recognized in the manner, established by the legislation, shall be satisfied in the following order:

      1) Firstly, the claims for payment of withheld wages, and (or) other maintenance income, as well as the demands of citizens to whom the liquidated reinsurance company is responsible for damage to life or health, through the capitalization of corresponding time payments for grounds, not related to the liability under the reinsurance contracts, shall be satisfied;

      Note of the RCLI!
      Sub-paragraph 2) is provided to change by the Law of the Republic of Kazakhstan dated 02.08.2015 No. 342-V (shall be enforced from 01.01.2020).

      2) in the second, the calculation on payment of wages and compensation to persons, who work under an employment contract, outstanding social contributions to the State Social Insurance Fund, the payment of mandatory pension contributions withheld from wages, as well as the royalties under copyright contracts, shall be paid;

      3) in the third, the claims of assignors, arising out of contracts for “life insurance” shall be satisfied;

      4) in the fourth stage, the claims of assignors, arising out of contracts for “general insurance” shall be satisfied;

      5) in the fifth stage, the claims of creditors under the obligations, secured by a pledge of assets of the liquidated reinsurance company within the amount of security, shall be satisfied;

      6) in the sixth stage, the liabilities for taxes, duties and other obligatory payments to the budget, as well as the repayment of loans granted from the republican budget shall be paid;

      7) in the seventh stage, the settlements with other creditors shall be carried out in accordance with the legislative acts of the Republic of Kazakhstan.

      4. The claims of each subsequent turn shall be satisfied after full satisfaction of the previous turn.

      When addressing the claims of creditors of one queue, the funds shall be apportioned between them in proportion to the amounts of claims, subject to satisfaction.

      5. Upon the occurrence of the relevant queue, the claim of the creditor with his consent can be satisfied in ways, not contrary to the legislation of the Republic of Kazakhstan, including in cash and (or) through the transfer of assets in kind in compliance with the principle of proportionality calculations.

      6. Creditors' claims expressed in foreign currency shall be satisfied in tenge at the rate established by the National Bank of the Republic of Kazakhstan on the date of entry into force of the court decision on compulsory liquidation of the insurance (reinsurance) company.

      Footnote. Article 72, as amended by the Laws of the Republic of Kazakhstan dated 11.06.2003 No. 436, dated 10.07.2003 No. 483 (shall be enforced from 01.01.2004), dated 20.02.2006 No.128 (the order of enforcement see Art. 2), dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 73. Supervisory powers of the authorized body in the process of liquidation of insurance (reinsurance) companies

      1. In order to exercise control over the activities of the liquidation commissions of voluntarily and compulsorily liquidated insurance (reinsurance) companies, including the reason of bankruptcy, the authorized body shall:

      1) receive the progress reports from the liquidation commissions, and if necessary the additional information;

      2) establish the form, terms and periodicity of submission of reports and additional information by the liquidation commissions;

      3) conduct inspections of liquidation commission activities, in the manner prescribed by the Laws of the Republic of Kazakhstan;

      4) upon identification of shortcomings and (or) risks in the activity of liquidation commissions, which may lead to creation of a provision threatening the interests of the insurants (beneficiaries) and (or) other creditors, violations of the legislation of the Republic of Kazakhstan, the rights and legitimate interests of creditors, to make obligatory for execution by liquidation commissions written instructions on elimination of violations and (or) causes, as well as conditions that contributed to their commission, within the established period and (or) submission of the action plan within the established period.

      In the actions plan submitted in time, established by the written instruction, descriptions of violations, the reasons which led to their emergence, the list of the planned actions, terms of their implementation and also responsible officials are specified.

      The appeal of the written instruction of authorized body in court does not stop his execution;

      5) in case of failure by the liquidation commission to replace the members of the liquidation commission or to demand their replacement in the case of voluntary liquidation of the insurance (reinsurance) company, to apply the measures provided by the legislation of the Republic of Kazakhstan, as well as to apply to the court or the Prosecutor's office for protection of the rights and interests of creditors protected by the Law;

      6) establish the specific aspects and the procedure for formation and approval of estimates of liquidation expenses;

      7) define the requirements for the implementation by the liquidation commissions the rules of storage of cash on hand, commission of credit and debit transactions with cash, conducting of cash instruments to ensure the expenditure of cash, cash balances limits and terms of delivery of cash in the current account of the liquidation commission.

      2. In the case of breach of the legislation of the Republic of Kazakhstan by the liquidation commission, the chairman, the head of unit of the liquidation commission shall be liable in accordance with the Laws of the Republic of Kazakhstan.

      Footnote. Article 73 is in the wording of the Law of the Republic of Kazakhstan dated 10.07.2003 No. 483 (shall be enforced from 1 January, 2004), as amended by the Laws of the Republic of Kazakhstan dated 23.12.2005 No. 107 (the order of enforcement see Article 2 of the Law No. 107), dated 31.01.2006 No. 125, dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication), dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 24.11.2015 No. 422-V (shall be enforced dated 01.01.2016); dated 02.07.2018 No. 168-VI (shall be enforced from 01.01.2019).

Chapter 13. Reporting and other issues

Article 74. Financial and other reports

      1. An insurance (reinsurance) company and an insurance broker shall perform the registration of their operations in accordance with international financial reporting standards, the legislation of the Republic of Kazakhstan on accounting and financial reporting.

      1-1. The insurance (reinsurance) company and the insurance broker shall be obliged to timely submit reliable and complete financial and other statements to the authorized body.

      2. The list, forms or requirements for forms, the terms and procedure for submission of financial and other reports of an insurance (reinsurance) company and an insurance broker, including financial and other reporting on a consolidated basis, shall be established by the authorized body.

      2-1. Is excluded by the Law of the Republic of Kazakhstan dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      3. An insurance (reinsurance) company and an insurance broker shall submit to the authorized body, upon its request, the data about their property, including outside the Republic of Kazakhstan, about the size of the taken risks, provided guarantees and warranties, on the concluded and concluding transactions on insurance and reinsurance, the data about the participation in the authorized capital of legal entities, including the data constituting the insurance secret, in order to implement the controlling and supervisory functions.

      4. Is excluded by the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2).
      Footnote. Article 74, as amended by the Laws of the Republic of Kazakhstan dated 11.06.2004 No. 562, dated 08.07.2005 No. 69, dated 20.02.2006 No. 128 (the order of enforcement see Art. 2), dated 05.05.2006 No. 139 (the order of enforcement see Art. 2 of the Law of the Republic of Kazakhstan No. 139), dated 28.02.2007 No. 235 (the order of enforcement see Art. 2), dated 19.03.2010 No. 258-IV; dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2), dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.07.2018 № 168-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 74-1. Reporting of a major participant of an insurance (reinsurance) company and insurance holdings

      1. The list, forms, and also terms and the order of submission by major participants of insurance (reinsurance) companies and insurance holdings of the financial and other reporting to the authorized body shall be established by the regulatory legal act of the authorized body.

      2. A major participant of an insurance (reinsurance) company being an individual, in addition to the reporting provided for in paragraph 1 of this Article, must within one hundred and twenty calendar days after the end of the financial year submit to the authorized body a copy of the declaration on individual income tax with a notification to the tax authority confirming the adoption of the tax declaration.

      Footnote. The chapter is supplemented by Article 74-1 in accordance with the Law of the Republic of Kazakhstan dated 23.12.2005 N 107 (the order of enforcement, see Article 2 of the Law N 107); is in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 № 168-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 75. Obligatory actuarial report

      1. Obligatory actuarial report on insurance reserves is an integral part of the annual financial statements of the insurance (reinsurance) company and shall be subject to the provision of the authorized body.

      2. The requirements for the content and the order of presentation of an obligatory actuarial report shall be established by the regulatory legal acts of the authorized body.

Article 75-1. Coefficients, characterizing the unprofitability

      1. Insurance (reinsurance) companies in order to analyze their activities during all or certain classes (types) of insurance shall calculate the coefficients, characterizing unprofitability (loss ratio, cost ratio, combined ratio).

      2. Coefficients, characterizing the unprofitability (loss ratio, cost ratio, combined ratio) are the relative indicators, reflecting the unprofitability of the insurance (reinsurance) company activity in the implementation of all or certain classes (types) of insurance.

      Procedure for calculating the coefficients, characterizing the unprofitability (loss ratio, cost ratio, combined ratio) shall be established by the regulatory legal acts of the authorized body.

      Footnote. Section is supplemented by Article 75-1 – by the Law of the Republic of Kazakhstan dated 20 February, 2006 No. 128 (the order of enforcement see Art. 2). Article is in the wording of the Law of the Republic of Kazakhstan dated 7 May, 2007 No. 244.

Article 76. Publication of the basic indicators of the insurance (reinsurance) company, insurance broker and insurance holding company

      Insurance (reinsurance) company and insurance broker shall publish the consolidated annual financial statements, and in the absence of a subsidiary (subsidiaries) organization (s) – the non-consolidated annual financial statements and the audit report in the manner and within the time, established by the authorized body, after an independent audit validation of their submitted information and approval of the annual financial statements by the annual meeting of shareholders of the insurance (reinsurance) company.

      Insurance (reinsurance) companies shall quarterly publish a balance sheet, profit and loss statement, corresponding to the international accounting standards, in the manner and terms, established by the authorized body, without their audit confirmation.

      Insurance holding companies shall publish their consolidated annual financial statements, and in the absence of a subsidiary (subsidiaries) organization(s) – the non-consolidated financial statements, as well as the audit report in the manner and terms, set by the authorized body.

      The requirements of this section shall not apply to non-residents of the Republic of Kazakhstan that are insurance holding companies.

      Footnote. Article 76 is in the wording of the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 77. Procedure and terms of document storage

      1. Professional participants of the insurance market, insurance agents, engaged in entrepreneurial activities shall generate data on insurance (reinsurance), insurance mediation and provide the registration and storage of documents, related to their activities in accordance with the legislation of the Republic of Kazakhstan.

      Insurance (reinsurance) company shall maintain a register of insurance (reinsurance) contracts in the manner, prescribed by the regulatory legal act of the authorized body. Contract of insurance (reinsurance) shall be entered in the register of insurance (reinsurance) contracts within one business day from the date of its conclusion.

      Information about a policyholder (insured person) (surname, first name, middle name (if available) or name of a legal entity, the number of the insurance contract, the date of its conclusion, the entry into force of the insurance contract and the expiration period, personal identification number or business identification number), contained in the register of insurance contracts and in the database shall match.

      2. The list of documents, subject to the mandatory storage, the order and terms of their storage by the professional participants of the insurance market, insurance agents, engaged in entrepreneurial activities, shall be established by the authorized body in consultation with the authorized body for managing the archives and documentation.

      Footnote. Article 77 is in the wording of the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2).

Article 78. Appeal against a decision of the authorized body

      1. A decision of the authorized body may be appealed by the concerned person within ten days from the date of its entry into force in accordance with the legislative acts of the Republic of Kazakhstan.

      2. Appeal against the decision of the authorized body on application of supervisory response measures (except for the recommendatory measures of supervisory response) and (or) sanctions, as well as actions of the temporary administration for management of the insurance (reinsurance) organization (temporary manager) at the stage of conservation, temporary administration (temporary administrator) of the insurance (reinsurance) company until the entry into force of the court decision on compulsory liquidation of the insurance (reinsurance) company shall not suspend the execution of the appealed decision or actions (inaction).

      Footnote. Article 78 as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VI ((shall be enforced from 01.01.2019).

Chapter 14. Activity on the formation and maintenance of the database

      Footnote. The Law is supplemented by Chapter 14 in accordance with the Law of the Republic of Kazakhstan dated 15.07.2010 No. 338-IV (the order of enforcement see Art. 2).

Article 79. The establishment procedure and main functions of organization for the formation and maintenance of database

      1. The organization for forming and maintaining the database with the state participation (further – the organization) is the non-profit organization created in a legal form of joint-stock company which hundred percent of voting shares belong to authorized body.

      Note of the RCLI!
      Part two of paragraph 1 is provided in the wording of the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-IV (shall be enforced from 01.01.2022).

      The organization shall carry out the formation and maintenance of a database on the compulsory insurance of civil liability of owners of vehicles under this Law and legislative acts of the Republic of Kazakhstan on compulsory insurance.

      The organization shall carry out maintenance of a single register of insurance agents.

      2. Excluded by the Law of the Republic of Kazakhstan dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication).
      3. Excluded by the Law of the Republic of Kazakhstan dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication).
      4. Excluded by the Law of the Republic of Kazakhstan dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of first official publication).

      5. The input order of the database by classes (types) of insurance consists of the following stages:

      1) excluded by the Law of the Republic of Kazakhstan dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication);

      2) putting into service the management system of database;

      3) organization of information process on the formation of database;

      4) testing of the information process, referred to in subparagraph 3) of this paragraph, with information providers who concluded a contract on the provision of information with them.

      Accomplishment check by the database of necessary actions for commissioning of a management system is performed by the commission of authorized body which results are reflected in the act of input of the database management system in operation in a form installed by authorized body.

      Implementation of the activities of the organization shall be allowed only if the act of putting into service of the management system of the database and the internal rules are available.

      The requirements for the content of internal rules, establishing the procedure for the organization shall be determined by the regulatory legal act of the authorized body. The regulatory legal act of the authorized body shall be binding on providers of information, referred to in subparagraph 1) of paragraph 3 of Article 80 of this Law, in respect of their activities as information providers to participate in the creation and protection of databases.

      6. The organization in it activity shall be obliged to:

      1) have technical and other premises for safe placement and operation of information systems, databases;

      2) in the formation and use of information systems for placement of the database and means of protection of the specified information systems, use the certified equipment and software;

      3) conduct an annual audit of the organization's software and hardware, including information and communication technologies used by the organization in its activities;

      4) provide the authorized state bodies exercising state control over the subjects of the database in accordance with the requirements of the legislation of the Republic of Kazakhstan, round-the-clock access to the information listed in paragraph 2 of Article 80 of this Law, in real time in accordance with the requirements of the Law of the Republic of Kazakhstan "On Informatization" and other laws of the Republic of Kazakhstan.;

      5) ensure immediate notification of the conclusion of the insurance contract in electronic form in the cases provided by the legislative acts of the Republic of Kazakhstan;

      6) ensure storage of information on insurance contracts in electronic form;

      7) provide the insurant (insured, beneficiary) with access to the information system of the organization to view information on insurance contracts in electronic form, concluded with the insurant, round- the-clock in real time through the user's personal account on the Internet resource of the organization in cases provided for by legislative acts of the Republic of Kazakhstan;

      8) comply with other requirements established by the legislation of the Republic of Kazakhstan and (or) contracts on provision of information and (or) receipt of insurance reports.

      7. The main functions of the organization shall be:

      1) collection of information provided for in paragraphs 1 and 2 of Article 81 of this Law;

      2) formation and issuance of insurance reports, the requirements for the content of which are established by this Law and separate legislative acts of the Republic of Kazakhstan regulating obligatory types of insurance;

      3) formation of insurance statistics, including those necessary for actuarial researches in the field of insurance and insurance activities;

      4) creation and maintenance of information analytical system for statistical accounting, analysis and synthesis of data on the insurance market and their submission to the authorized body and suppliers on their request through the Internet resource of the organization;

      5) automatic calculation of insurance premiums under the contracts of obligatory insurance in accordance with separate legislative acts of the Republic of Kazakhstan, regulating compulsory types of insurance;

      6) maintenance of an electronic database of insurance contracts to store information on insurance contracts in electronic form for each insurant (insured, beneficiary);

      7) placement on its Internet resource of the list of Internet resources of the insurance companies used for the conclusion of insurance contracts in electronic form.

      8. In order to ensure high-quality and timely performance of functions for implementation of the requirements provided for by legislative acts of the Republic of Kazakhstan and this Law, the organization shall have the right to receive information from individuals and legal entities, as well as state bodies, including information constituting the secret of insurance.

      In order to ensure that insurance companies comply with the requirements of the legislation of the Republic of Kazakhstan on combating the legalization (laundering) of proceeds, received by criminal way, and financing terrorism, the organization shall have the right to receive access to the relevant information systems and databases of state bodies in accordance with the requirements of the Law of the Republic of Kazakhstan "On Informatization" and other laws of the Republic of Kazakhstan.

      Employees of the company shall be responsible for disclosure of information obtained in the course of their functions, constituting official, commercial secrets, insurance secrets or other secrets protected by the Law, in accordance with the Laws of the Republic of Kazakhstan.

      Footnote. Article 79, as amended by the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication), dated 05.07.2012 No. 30-V (shall be enforced upon expiry of ten calendar days after its first official publication); dated 27.04.2015 No. 311-V (an order of enforcement see Art. 2); dated 24.11.2015 No. 419-V (shall be enforced dated 01.01.2016); dated 24.11.2015 No. 422-V (an order of enforcement see Art. 2); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 80. Database

      1. The structure of the database is defined by the organization with the requirements established by this Law.

      2. Insurance report is divided into the following types:

      1) an insurance report of the limited access is the insurance report, containing the data about the double insurance, insurance payments, the paid insurance premiums, about the size of the insured amount and other data, relating to the identity of the policyholder, the insured person or the beneficiary;

      2) an insurance report of standard access– an insurance report containing information on the insured events, the object of insurance, insurance agents, and other information not related to the insurance secret.

      3. Providers of information for the formation of database shall be:

      1) insurers on the basis of contracts concluded with the organization on provision of information;

      2) authorized state bodies exercising state control over the subjects of the database in accordance with the requirements of certain legislative acts of the Republic of Kazakhstan regulating obligatory types of insurance;

      3) an authorized body;

      4) other persons on the basis of contracts on provision of information.

      4. Recipients of the insurance report shall be:

      1) the authorized body;

      2) the authorized state bodies, exercising the state control over the subjects of the database in accordance with the legislative acts of the Republic of Kazakhstan on compulsory types of insurance;

      2-1) the state body, carrying out within its competence, statistical activity in the field of legal statistics and special accounts for the purpose of providing information concerning the contracts of obligatory insurance of civil liability of owners of vehicles by the authorized state body by means of system of information exchange of law enforcement, special state and other bodies;

      3) insurers on the basis of concluded contracts with the organization on the receipt of insurance reports;

      4) subjects of database (an insurant, insured, beneficiary);

      5) consulting and scientific-research organizations providing consulting services in the field of insurance and actuarial calculations;

      6) other persons in the order provided by separate legislative acts of the Republic of Kazakhstan regulating obligatory types of insurance;

      7) the insurance ombudsman;

      8) the persons, specified in subparagraphs 1), 2), 3), 4) and 4-4) of paragraph 5 of Article 830 of the Civil code of the Republic of Kazakhstan (Special part);

      9) banks, organizations, carrying out certain types of banking operations, microfinance organizations, on the basis of a contract concluded with the organization on provision of information and (or) obtaining insurance reports and the consent of the database subject.

      It is not allowed to provide information to other persons not specified in this paragraph.

      5. Issuance of insurance reports from the database to the recipients of insurance report, referred to in paragraph 4 of this Article, shall be carried out depending on the access levels and types of insurance reports:

      1) recipients of insurance reports, referred to in subparagraphs 1) - 3) of paragraph 4 of this Article, shall be entitled to receive the insurance reports of limited access and standard access on all subjects of the database;

      2) recipients of insurance report, referred to in subparagraph 4) of paragraph 4 of this Article, shall be entitled to receive the insurance report of limited access and standard access only to themselves;

      3) recipients of insurance report, referred to in subparagraph 5) of paragraph 4 of this Article, shall be entitled to receive the insurance reports of limited access and standard access, containing the summary information on the number of concluded insurance contracts, the amount of insurance premiums, insurance events, as well as the amounts of insurance payments (in terms of payment for property and health);

      4) recipients of insurance report, referred to in subparagraph 6) of paragraph 4 of this Article shall be entitled to receive the insurance reports, containing the information, prescribed by the legislative acts of the Republic of Kazakhstan on compulsory types of insurance;

      5) the recipient of insurance report, referred to in subparagraph 7) of paragraph 4 of this Article, shall be entitled to receive the insurance reports of limited access and standard access on the subjects of the database, in resolving the issues in the order, established by the legislative acts of the Republic of Kazakhstan on compulsory types of insurance;

      6) the recipients of the insurance report specified in subparagraph 9) of paragraph 4 of this Article shall be entitled to receive insurance reports of limited and standard access on the subjects of the database subject to the conclusion of a contract with the organization on provision of information and (or) receipt of insurance reports, as well as with the consent of the database subject.

      Recipients of the insurance report specified in sub-paragraphs 1), 2), 2-1), 3), 6), 7) and 9) paragraph 4 of this Article shall be responsible for the disclosure of information obtained in the course of their functions, constituting official, commercial secrets, insurance secrets or other secrets protected by the Law in accordance with the Laws of the Republic of Kazakhstan.

      6. The basis for submission of the insurance report shall be the request of the recipients of the insurance report referred to in paragraph 4 of this Article.

      The request shall be filed on behalf of the recipients of the insurance report, specified in subparagraphs 4) and 5) of paragraph 4 of this Article, by the authorized person responsible for filing the request to the database, the information on which is contained in the register of recipients of the database.

      Submission of the insurance report by the organization to the recipients, specified in subparagraphs 1), 2), 2-1) and 5) of paragraph 4 of this Article shall be carried out on the basis of their request on paper or in the form of an electronic document, certified by an electronic digital signature.

      The insurance report shall be submitted to the subject of the database on the basis of his (her) request on paper or in the form of an electronic document certified by an electronic digital signature, in the manner prescribed by the legislation of the Republic of Kazakhstan on information, electronic document and electronic digital signature.

      Submission of the insurance report by the organization to the recipients, specified in subparagraph 9) of paragraph 4 of this Article shall be carried out in accordance with the terms of the contract concluded with the organization for the provision of information and (or) receipt of insurance reports.

      Submission of the insurance report by the organization to the recipient, specified in subparagraph 7) of paragraph 4 of this Article shall be carried out on the basis of his (her) request on paper or in the form of an electronic document, certified by an electronic digital signature.

      Persons, specified in subparagraphs 2), 4), 7) and 8) of paragraph 4 of this Article shall have the right to obtain an insurance report through the Internet resource of the organization for the purposes and in the manner prescribed by the legislation of the Republic of Kazakhstan.

      6-1. The authorized state bodies exercising state control over the subjects of the database in accordance with the requirements of legislative acts of the Republic of Kazakhstan shall have the right to receive the information, listed in paragraphs 1 and 2 of this Article round-the-clock in real time using information systems integrated with the relevant software in accordance with the requirements of the Law of the Republic of Kazakhstan "On Informatization" and other laws of the Republic of Kazakhstan.

      7. Non-performance and (or) untimely accomplishment of the duties provided in point 1 of article 82 of this Law the organization bears the responsibility established by the Code of the Republic of Kazakhstan about administrative offenses for distortion of information obtained from suppliers of information.

      Footnote. Article 80, as amended by the Law of the Republic of Kazakhstan dated 28.12.2011 No. 524-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 81. Information, provided for the formation of a database

      1. The information providers, specified in subparagraph 1) of paragraph 3 of Article 80 of this Law shall provide information on each concluded insurance contract, on the volumes of insurance premiums, on insurance cases, insurance agents, as well as the amounts of insurance payments (in the context of payments for property and health) in the manner, terms and volume that are provided for in the contract on the provision of information and (or) receipt of insurance reports, taking into account the requirements provided for by this Law and the regulatory legal act of the authorized body.

      2. Regulatory legal act of the authorized body may establish the additional requirements for the content of information, provided by the providers of information, referred to in subparagraph 1) of paragraph 3 of Article 80 of this Law, in the database.

      3. Information, listed in paragraphs 1 and 2 of this Article, shall be provided by the providers of information, referred to in subparagraph 1) of paragraph 3 of Article 80 of this Law, in electronic form with using information systems, united by the appropriate software, in the terms established by the regulatory legal act of the authorized body.

      4. The suppliers of information specified in subparagraphs 1) and 3) of point 3 of article 80 of this Law bear the responsibility established by the Code of the Republic of Kazakhstan about administrative offenses for distortion of information by its providing in the database, non-performance and (or) untimely accomplishment of the duties provided in point 3 of article 82 of this Law.

      Footnote. Article 81 with the changes made by the Law of the Republic of Kazakhstan from 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 82. Rights and obligations of persons, involved in the formation and maintenance of a database

      1. The organization shall:

      1) carry out the formation of insurance reports;

      2) provide insurance reports in the manner, prescribed by this Law and the regulatory legal acts of the authorized body;

      3) not prevent the disclosure of information, contained in the insurance reports, except as provided in this Law;

      4) provide to the recipient of the insurance report and the subject of the database the corrected insurance report, if the insurance report presented to the recipient, as a result of actions or omissions of the employees of the organization contain the information, not corresponding to the information, provided to the organization by the providers of information, within five business days from the date of detection of the specified mismatch.

      If necessary the confirmation by the provider of information of the fact of discrepancy of the insurance report, issued by the organization, the calculation of the term for provision of the information of the corrected insurance report to the recipient of the insurance report and the subject of a database, shall be carried out from the time of receipt by the organization of the relevant information from the provider of information in the period specified in subparagraph 7) of paragraph 3 of this Article;

      5) at the request of the subject of a database, provide it with information about the provider of information, that provided the information, contested by the subject of a database;

      6) refuse to represent the insurance report, if the request on its submission is made in violation of the requirements, established by the legislation of the Republic of Kazakhstan;

      7) keep records of requests for presentation of insurance reports and record of the presented insurance reports;

      8) contact the provider of information with the requirement for an adjustment, supplement of the received information, that shall be subject to reissuance or clarification in the presence of relevant grounds;

      9) to use electronic information resources and information systems according to the legislation of the Republic of Kazakhstan;

      10) ensure the equal conditions for participation of providers of information referred to in paragraph 3 of Article 80 of this Law, in the creation of and access to the information resources of a database;

      11) provide the information, requested by the authorized body for the implementation of its powers, stipulated by the legislation of the Republic of Kazakhstan, including:

      the information on failure to provide, untimely provision or provision of incomplete information by the providers of information, referred to in subparagraph 1) of paragraph 3 of Article 80 of this Law, which provision is required by this Law, the regulatory legal act of the authorized body and the contracts for provision of information and (or) receiving the insurance reports;

      the information on the amount of insurance premiums, calculated by the providers of information referred to in subparagraph 1) of paragraph 3 of Article 80 of this Law, in violation of the requirements of the legislative acts of the Republic of Kazakhstan on compulsory types of insurance;

      12) provide the access to a database to the authorized body;

      13) within two working days from the date of application of the subject of database, provide him (her) with information on the presence in the database of data on the insurance contract, concluded by the insurant with the insurer (information provider), whose duties include entering information into the database under the insurance contract;

      14) within three business days from the date of receipt of the written request of the injured or the person, who is entitled under the Laws of the Republic of Kazakhstan to compensation in connection with the death of the injured, submit in writing the information on the presence or absence of the insurance policy in the cases, stipulated by legislation of the Republic of Kazakhstan on compulsory types of insurance;

      15) comply with other requirements, established by the legislation of the Republic of Kazakhstan and (or) by contracts for provision of information and (or) receipt of insurance reports;

      16) maintain a unified register of insurance agents, including:

      provide information to the insurer about the presence of an insurance agent in the unified register and confirm the powers of insurance agents to provide intermediary services in the conclusion of insurance contracts;

      exclude from the unified register of insurance agents on the grounds provided for by this Law.

      2. Organization shall have the right to:

      1) conclude the contracts for the provision of information with providers of information and (or) the receipt of insurance reports with the recipients of insurance reports;

      2) require from the providers of information the complete and accurate information, providing for the formation of a database;

      3) return the information, provided by the provider of information without using it in the database, due to its improper or incomplete design, inconsistency of the data of the provider of information, the recipient of the insurance report, the subject of a database with the requirements of the used information system;

      3-1) to purchase information materials related to entrepreneurial activities from a self-regulatory organization;

      3-2) for formation and use of the database to obtain information from databases and information systems of state bodies and organizations;

      3-3) to provide the recipients of insurance reports with information on the history of the insured vehicle;

      4) have other rights, stipulated by legislative acts of the Republic of Kazakhstan and the contracts, concluded in accordance with this Law.

      3. Providers of information shall:

      1) conclude the contract with the organization for the provision of information and (or) the receipt of insurance reports;

      2) provide the information to the database for its formation in the volume, manner and time as defined by the contracts for provision of information and (or) receipt of insurance reports;

      3) make corrections to the information, transmitted to the organization, at the request of the subject of a database;

      4) provide the information to the organization in strict accordance with the data, available on the subject of a database;

      5) to use electronic information resources and information systems according to the legislation of the Republic of Kazakhstan.

      6) provide the appropriate conditions for obtaining and processing the information at their own expense;

      7) provide, within three business days, the information to the organization in the cases, stipulated by subparagraph 4) of paragraph 1 of this Article.

      4. Provider of information shall have the right to:

      1) require the use by the organization of the information, provided in accordance with this Law;

      2) have other rights in accordance with the legislative acts of the Republic of Kazakhstan and (or) the contract for provision of information and (or) receipt of information.

      5. Recipients of insurance reports, referred to in subparagraphs 3) and 5) of paragraph 4 of Article 80 of this Law shall:

      1) report on the changes in the data, submitted by them in the register as a recipient of the information;

      2) comply with the confidentiality of the received information and not disclose it to third parties;

      3) use the received information only for the purposes, provided in this Law;

      4) introduce the subject of a database at its request with the content of the information or provide him a copy of this information in accordance with the internal regulations;

      5) pay for services to provide the information from a database in the order, amount and terms that are defined by the contract for provision and (or) receipt of insurance reports;

      6) have other duties in accordance with the legislative acts of the Republic of Kazakhstan and (or) the contract for provision of information and (or) receipt of insurance reports.

      6. Recipient of information shall have the right to receive the insurance report and have other rights in accordance with the legislative acts of the Republic of Kazakhstan.

      7. Subject of a database shall have the right to:

      1) receive in accordance with the requirements, established by this Law, the insurance report of itself;

      2) in the conclusion of the insurance contract, require the recipient of the insurance report, referred to in subparagraph 3) of paragraph 4 of Article 80 of this Law, the acquaintance with the insurance report or issue him a copy of the insurance report, obtained by this recipient from the database;

      3) disagree with the information, contained in the insurance report, with obtaining the information about the provider of information;

      4) contact the provider of information and the organization, demanding the correction of incorrect information;

      5) have other rights in accordance with the legislative acts of the Republic of Kazakhstan.

      Footnote. Article 82 with the changes made by the Law of the Republic of Kazakhstan dated 24.11.2015 No. 419-V (shall be enforced dated 01.01.2016); dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 83. Mandatory terms of the contract for provision of information and (or) receive of insurance reports

      Contract for provision of information and (or) receipt of insurance reports shall contain:

      1) full name of the parties, data about their location and bank details;

      2) indication of the subject matter of the contract in accordance with this Law;

      3) list and forms of insurance reports, submitted from the database;

      4) rights and obligations of the parties, in accordance with this Law;

      5) procedure for payment of services to provide the information from the database;

      6) types, amount, periods (frequency), procedure for provision of information for the formation of a database;

      7) types, periods (frequency), volume of information, contained in the insurance reports, and the order to obtain the insurance reports;

      8) term of the contract, grounds and procedure for its changing, termination at the unilateral refusal to perform the contract in the cases, provided by this Law, as well as the size of the forfeit for non-fulfillment or improper fulfillment of obligations under the contract;

      9) obligation of the provider of information on compliance with the confidentiality in respect of all information, sent to the organization;

      10) obligation of the organization on compliance with the confidentiality in respect of all the received information;

      11) provisions for the responsibilities of the parties for breach of contract.

      Unilateral refusal on performance of the contract for provision of information shall be possible only in cases of voluntary return, and deprivation of a license of the insurance company to conduct the insurance activities. At the same time the insurance company shall, prior to the expiration of the insurance contract, provide to the organization the information, prescribed in Article 81 of this Law.

      When concluding a contract for provision of information and (or) receive of insurance reports with providers of information, referred to in subparagraph 1) of paragraph 3 of Article 80 of this Law, the following conditions shall be included in the contract for provision of information and (or) receive the insurance reports:

      1) on the list and forms of information, required by paragraph 2 of Article 81 of this Law;

      2) on mandatory joint implementation of organizational, technical measures and technological requirements for the protection of software, used in the formation and operation of information systems, used to create the database and the protection means of the specified information systems.

Article 84. Registration in the organization

      For registration in the organization, the providers of information, referred to in paragraph 3 of Article 80 of this Law, shall submit the following documents:

      1) an application for registration in the organization;

      2) a certificate of the state registration (reregistration) of a legal entity;

      3) the information about the surname, first name, middle name (if any) of the officials, authorized to make the requests to the database in the order, established by the organization.

      If necessary, this information shall be certified by a digital signature of these individuals.

      Footnote. Article 84, as amended by Law of the Republic of Kazakhstan dated 24.12.2012 No. 60-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 85. Reorganization and liquidation of organizations

      Footnote. Article 85 is excluded by the Law of the Republic of Kazakhstan dated 27.04.2015 No. 311-V (shall be enforced after ten calendar days after day of its first official publication).

Chapter 15. Insurance ombudsman

      Footnote. The Law is supplemented by Chapter 15 in accordance with the Law of the Republic of Kazakhstan dated 02.07.2018 No. 166-VI (shall be enforced upon expiry of ten calendar days after its first official publication).

Article 86. Insurance ombudsman, his status, principles of activity, procedure of election and early termination of his powers

      1. The insurance ombudsman shall be an individual who is independent in his/her activity and carries out the settlement of disputes:

      1) between the insurance companies arising on the issues of compulsory and voluntary insurance;

      2) between the insurants (insured, beneficiaries) and insurance companies arising from insurance contracts.

      The insurance ombudsman shall carry out the settlement of disputes, in which individuals and (or) subjects of small entrepreneurship act as the insurants (insured, beneficiaries). Other legal entities may apply to the insurance ombudsman only on the class (type) of obligatory insurance of civil liability of vehicle owners.

      The sum of the requirements for the differences of persons specified in part two of this paragraph, shall not exceed ten thousand times the monthly calculation index.

      2. The insurance ombudsman shall be guided by the following principles in his/her activity:

      1) equality of the parties;

      2) objectivity and impartiality in making a decision by the insurance ombudsman;

      3) keeping secrecy of insurance and other secrets protected by the Law;

      4) respect for the rights and interests of the parties protected by the Law;

      5) transparency and justification of the decision-making procedure.

      3. Election and early termination of the powers of the insurance ombudsman shall be carried out by the council of representatives of the insurance ombudsman.

      4. The insurance ombudsman shall be elected by a majority vote of the council of representatives of the insurance ombudsman. Each member of the board of representatives of the insurance ombudsman shall have one vote. In case of equality of votes, the vote of the representative of the authorized body shall be decisive.

      5. The meeting of the council of representatives of the insurance ombudsman shall be deemed competent, and the quorum conditions shall be met, if the members of the council of representatives of the insurance ombudsman present at the meeting have in total not less than two thirds of the total votes.

      6. The insurance ombudsman shall be elected for a term of three years.

      7. The same person may not be elected as an insurance ombudsman more than twice in a row.

      8. Early termination of the powers of the insurance ombudsman on its initiative shall be carried out on the basis of a written notification of the council of representatives of the insurance ombudsman one month before the termination of powers.

Article 87. Council of representatives of the insurance ombudsman and its competence

      1. The council of representatives of the insurance ombudsman shall be formed by one representative from:

      1) each insurance company having a license for the right to carry out insurance activities;

      2) the authorized body.

      2. The competence of the council of representatives shall include:

      1) election of the insurance ombudsman from among the candidates meeting the requirements established by Article 88 of this Law;

      2) approval of the structure and staff (office of the insurance ombudsman);

      3) determination of the procedure for financing the activities (budget) of the insurance ombudsman;

      4) approval of the internal rules of the insurance ombudsman in coordination with the authorized body;

      5) early termination of the powers of the insurance ombudsman in cases of non-compliance of the insurance ombudsman with the requirements provided for by Article 88 of this Law or failure to comply with the requirements provided for by paragraph 3 of Article 91 of this Law;

      6) other issues related to the activities of the insurance ombudsman in accordance with this Law.

Article 88. Requirements for the insurance ombudsman

      1. A person may be recommended for election as an insurance ombudsman:

      1) having higher legal education and (or) higher economic education;

      2) having an impeccable business reputation;

      3) having experience in the field of insurance for more than five years;

      4) previously not being a senior employee of an insurance company or other legal entity in the period not more than one year prior to the adoption by the authorized body of the decision on conservation of the insurance company, compulsory redemption of its shares, deprivation of the license of the insurance company, as well as compulsory liquidation of the insurance company or other legal entity or recognition them as bankrupt in accordance with the legislation of the Republic of Kazakhstan.

      A person recognized incapable or partially capable by the court in accordance with the procedure established by the Law of the Republic of Kazakhstan, as well as a person against whom criminal prosecution is carried out may not be recommended as an insurance ombudsman.

      2. The insurance ombudsman shall not be entitled to hold any of the positions in insurance companies and (or) to be an affiliated person of insurance companies.

Article 89. Rights and duties of the insurance ombudsman

      1. The insurance ombudsman shall have the right to:

      1) request from the insurance companies the information necessary for consideration of application of the applicant;

      2) publish in the media materials on the activities of the insurance ombudsman in compliance with the requirements of subparagraph 2) of paragraph 2 of this Article;

      3) the formation of the staff (office of the insurance ombudsman).

      2. The insurance ombudsman shall be obliged to:

      1) be guided in their activities by the principles provided for in paragraph 2 of Article 86 of this Law;

      2) keep confidentiality in respect to information obtained in the course of dispute resolution, and not to disclose it to the third parties;

      3) report annually to the council of representatives of the insurance ombudsman on its activities.

Article 90. Decision-making procedure by the insurance ombudsman

      1. The decision shall be taken by the insurance ombudsman individually and shall be communicated in written form to the parties involved in the dispute.

      2. When making decisions, the insurance ombudsman is guided by the legislation of the Republic of Kazakhstan and the terms of contracts.

      3. The decision of the insurance ombudsman on the disputes between insurance companies shall be obligatory for insurance companies.

      The decision of the insurance ombudsman on the disputes between the insurant (insured, beneficiary) and the insurance company shall be obligatory for the insurance company in case of its acceptance by the insurant (insured, beneficiary).

      4. In case of non-fulfillment by the insurance company of the decision of the insurance ombudsman within the period established by him/her, the insurance ombudsman shall be obliged to inform the authorized body no later than three working days with attachment of documents confirming the violation of the requirements of this Law and regulatory legal acts of the authorized body.

      5. In case of disagreement with the decision of the insurance ombudsman, the insurant (insured, beneficiary), the insurer shall have the right to apply to the court for protection of their right in accordance with the legislation of the Republic of Kazakhstan. In this case, execution of the decision of the insurance ombudsman for the insurant (insured, beneficiary) shall not be obligatory.

Article 91. Activities of the insurance ombudsman

      1. The activity of the insurance ombudsman, including the procedure and terms of consideration of applications for settlement of disputes and decision-making, shall be carried out on the basis of internal rules of the insurance ombudsman.

      2. In order to properly perform the assigned functions, the activities of the insurance ombudsman shall be financed by contributions from insurance companies, members of the council of representatives of the insurance ombudsman. The conditions and procedure for payment of contributions shall be determined by internal rules of the insurance ombudsman.

      3. Settlement of disputes in the cases provided for in paragraph 1 of Article 86 of this Law shall be carried out by the insurance ombudsman free of charge.

Article 92. Features of the settlement of disputes arising from obligatory insurance contracts

      Features of settlement of disputes arising from obligatory insurance contracts shall be established by separate legislative acts of the Republic of Kazakhstan regulating obligatory types of insurance.

      The President of the Republic of Kazakhstan

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