RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of August 27, 2018 No. 203

About approval of Rules and features of implementation of activities for reinsurance, and also insurance (reinsurance) pool

According to the Law of the Republic of Kazakhstan of December 18, 2000 "About insurance activity" the Board of National Bank of the Republic of Kazakhstan DECIDES:

1. Approve the enclosed Rules and features of implementation of activities for reinsurance, and also insurance (reinsurance) pool.

2. To department of regulation of the non-bank financial organizations (Kosherbayeva A. M.) in the procedure established by the legislation of the Republic of Kazakhstan to provide:

1) together with Legal department (Sarsenov N. V.) state registration of this resolution in the Ministry of Justice of the Republic of Kazakhstan;

2) within ten calendar days from the date of state registration of this resolution its direction in the Kazakh and Russian languages in the Republican state company on the right of economic maintaining "The republican center of legal information" for official publication and inclusion in Reference control bank of regulatory legal acts of the Republic of Kazakhstan;

3) placement of this resolution on official Internet resource of National Bank of the Republic of Kazakhstan after its official publication;

4) within ten working days after state registration of this resolution submission to Legal department of data on execution of the actions provided by subitems 2), 3) of this Item and Item 3 of this resolution.

3. To management on consumer protection of financial services and external communications (Terentyev A. L.) provide within ten calendar days after state registration of this resolution the direction it to the copy on official publication in periodic printing editions.

4. To impose control of execution of this resolution on the vice-chairman of National Bank of the Republic of Kazakhstan Kurmanov Zh. B.

5. This resolution becomes effective after ten calendar days after day of its first official publication.

Approved by the Resolution of Board of National Bank of the Republic of Kazakhstan of August 27, 2018 No. 203

Rules and features of implementation of activities for reinsurance, and also insurance (reinsurance) pool

1. These rules and features of implementation of activities for reinsurance, and also insurance (reinsurance) pool (further - Rules) are developed according to the Law of the Republic of Kazakhstan "About insurance activity" and determine procedure and features of implementation of activities for reinsurance, and also insurance (reinsurance) pool.

2. For the purposes of Rules the following concepts are used:

1) бордеро - the document provided to the overcautious person by the reinsurer and containing list of the obligations and awards which are subject to transfer under the agreement of reinsurance;

2) clause - the standard condition on restriction or expansion of covering of risk applied by the international insurance (reinsurance) organizations and accepted in the international practice according to business customs;

3) the reinsurance commission - the remuneration paid by the overcautious person to the reinsurer for transfer of objects (risks) to the last to reinsurance;

4) reinsurance compensation - the amount of money received by the reinsurer from the overcautious person under the agreement of reinsurance, consisting of share of payment of the overcautious person from the insurance payment which is actually performed by the insurer and the coverings of the expenses made by the reinsurer, connected with settlement of loss according to the insurance contract;

5) the agreement of reinsurance - the agreement between the reinsurer (assignor) and the overcautious person in accordance with the terms of whom the reinsurer (assignor) reports and the overcautious person accepts everything or part of insurance risks according to one or several insurance contracts (reinsurance);

6) limit of responsibility of the overcautious person - the maximum reinsurance covering on all or separate risks transferred under the agreement of reinsurance during the specified period of time established over own deduction of the reinsurer (assignor);

7) net - reinsurance award of the overcautious person - amount of money which is subject to payment of the reinsurance organization for adoption of obligations by it only on implementation of insurance payments without covering of other expenses;

8) the subscription list – the document processed by insurance broker, branch of the insurance nonresident broker of the Republic of Kazakhstan as appendix to reinsurance slip on which the overcautious person makes mark (the signature and (or) stamp) with indication of share of the risk accepted by it on reinsurance. The subscription list, in case of its registration, is integral part of reinsurance slip;

9) sublimit - restriction in reinsurance compensation by separate types of the insurance risks determined within limit of responsibility of the overcautious person;

10) obligatory reinsurance - reinsurance form in case of which the reinsurer (assignor) shall report to the overcautious person to reinsurance, and the overcautious person to accept everything or part of risks according to insurance contracts, according to conditions of the signed agreement of reinsurance;

11) the commission of insurance broker, branch of the insurance nonresident broker of the Republic of Kazakhstan – the remuneration paid by the reinsurer (assignor) to insurance broker, branch of the insurance nonresident broker of the Republic of Kazakhstan for transfer of objects (risks) to the last to reinsurance;

12) non-proportional reinsurance - type of reinsurance in case of which responsibility of the overcautious person on implementation of reinsurance compensation comes if the size of loss or unprofitability exceeds the priority of the reinsurer determined to agreements of reinsurance if other is not provided by the agreement of reinsurance;

13) proportional reinsurance - type of reinsurance in case of which obligations of the overcautious person to the reinsurer by implementation of reinsurance payment it is determined in proportion (share) from insurance payment.

3. The insurance (reinsurance) organization, branch of the insurance (reinsurance) nonresident organization of the Republic of Kazakhstan provide availability of the internal regulations and procedures providing procedure for documentary registration and agreement signature of reinsurance, including determination of terms and authorized persons, except as specified, provided by Rules.

4. In case of the conclusion of the contract of reinsurance with the reinsurance nonresident organization of the Republic of Kazakhstan availability at the insurance (reinsurance) resident organization of the Republic of Kazakhstan, branch of the insurance (reinsurance) nonresident organization of the Republic of Kazakhstan (further - the reinsurer (assignor) of the agreement of reinsurance (including all appendices) who contains signatures of all overcautious persons who are taking part in placement of risks or the overcautious person accepting the greatest share of risk (the leading overcautious person) with obligatory specifying of surname, name and middle name (in case of its availability), and also positions of the signing person is provided.

Availability at the reinsurer (assignor) of the agreement of reinsurance is optional in cases when transfer of insurance risks to reinsurance is performed through mediation of the insurance resident broker of the Republic of Kazakhstan, branch of the insurance nonresident broker of the Republic of Kazakhstan without participation of the insurance nonresident broker of the Republic of Kazakhstan or through the insurance nonresident broker of the Republic of Kazakhstan having in the territory of the Republic of Kazakhstan the affiliated organization performing activities of insurance broker based on the license of authorized body on regulation, control and supervision of activities of the financial organizations (further – authorized body), by registration reinsurance cover-notes or reinsurance slip with the subscription list.

In case of participation of the insurance resident broker of the Republic of Kazakhstan, branch of the insurance nonresident broker of the Republic of Kazakhstan in the course of transfer of insurance risks to reinsurance through mediation of the insurance nonresident broker of the Republic of Kazakhstan, the insurance resident broker of the Republic of Kazakhstan, branch of the insurance nonresident broker of the Republic of Kazakhstan cover-notes provide reconciliation of compliance of content reinsurance to the agreement of reinsurance and (or) reinsurance slip.

In case of availability of contradictions between conditions of the signed agreement of reinsurance (reinsurance slip) and reinsurance cover-notes are accepted terms of the contract of reinsurance (reinsurance slip).

5. As confirmation of the conclusion of the agreement of reinsurance availability at the reinsurer (assignor) of the electronic or scanned copies of the agreement of reinsurance (reinsurance slip and (or) the subscription list), reinsurance cover-notes, in case of data acquisition of copies from the e-mail address containing domain name of Internet resource of the reinsurance organization or the insurance nonresident broker of the Republic of Kazakhstan, having the affiliated organization performing activities of insurance broker based on the license of authorized body in the territory of the Republic of Kazakhstan is allowed.

By transfer of risks on reinsurance through mediation of insurance broker (insurance brokers), branch of the insurance nonresident broker of the Republic of Kazakhstan (branches of insurance nonresident brokers of the Republic of Kazakhstan), as confirmation of the conclusion of the agreement of reinsurance (reinsurance slip and (or) the subscription list) availability at the reinsurer (assignor) of the electronic or scanned copy of the agreement of reinsurance and the electronic statement from information systems of exchange of information (messages) between participants of the insurance market of Exchange-Lloyd "s or Placing Platform Limited (further – systems of exchange of information) received from the brokers authorized in these systems international insurance (reinsurance) having rating assessment not below "VVV-" on the international scale of Standard & Poor rating agency" s or the rating of similar level on the international scale of the Moody agencies "s Investors Service, Fitch, A.M is allowed. Best or their affiliated insurance (reinsurance) brokers. At the same time the electronic statement and the electronic or scanned copy of the agreement of reinsurance (reinsurance slip) go to the reinsurer (assignor) from the e-mail address containing domain name of Internet resource of the reinsurance organization or international insurance (reinsurance) the broker of the exchange of information authorized in systems and s Investors Service having rating assessment not below "VVV-" on the international scale of Standard & Poor rating agency "s or the rating of similar level on the international scale of the Moody agencies", Fitch, A.M. Best or its affiliated insurance (reinsurance) brokers.

6. In case of transfer of risks to the insurance (reinsurance) nonresident organization of the Republic of Kazakhstan within obligatory proportional reinsurance, the reinsurer (assignor) provides availability of the electronic or scanned copies бордеро awards, losses or acts of reconciliations of settlement on awards and losses at least once a quarter.

Under the agreement of obligatory non-proportional reinsurance бордеро awards, losses or acts of reconciliations of settlement on awards and losses are constituted with the frequency established by the agreement of the parties.

7. The reinsurer (assignor) makes the decision according to the conclusion of the contract of reinsurance with the non-resident reinsurer of the Republic of Kazakhstan based on the internal document containing:

reasons for need of risks reinsurance outside the Republic of Kazakhstan on the specified conditions (quality of covering), including economic feasibility;

the analysis of price offers, including resident reinsurers of the Republic of Kazakhstan to which the offer on acceptance of risks was sent.

In case of transfer of risks within the obligatory agreement of reinsurance, reasons for need of risks reinsurance in addition contain the analysis of unprofitability of portfolio of the insurance contracts (reinsurance) by the transferred types (classes) of insurance concluded for the last 3 (three) financial years, preceding date of the conclusion of the obligatory agreement of reinsurance.

8. Requirements of Items 6 and 7 of Rules do not extend to agreements of reinsurance on the subsequent transfer of the risks accepted within participation in insurance (reinsurance) pool.

9. By transfer of insurance risks to reinsurance the reinsurer (assignor) provides availability at himself the following data under the agreement of reinsurance documented by the reinsurance organization:

the size net - reinsurance award of the overcautious person, procedure and terms of its payment;

size of the reinsurance commission, commission of insurance broker and branch of the insurance nonresident broker of the Republic of Kazakhstan, procedure and terms of their payment;

country jurisdiction in case of the dispute resolution.

10. If the risks exceeding the maximum amount of own deduction of the reinsurer (assignor) or insurance (reinsurance) pool according to the separate insurance contract (reinsurance) become covered by the agreement of reinsurance, then the reinsurer (assignor) or participants of insurance (reinsurance) pool provide compliance of conditions of reinsurance, regarding such exceeding to insurance conditions, and also availability in the agreement of reinsurance of all objects of insurance and insured events provided in the insurance contract for the purpose of ensuring risks reinsurance in full.

If the agreement of reinsurance contains the conditions on release of the overcautious person from reinsurance compensation which are not provided in the insurance contract (reinsurance) including, franchizes, clauses, exceptions of insured events, additional limits of responsibility of the overcautious person and sublimits or other restrictions on reinsurance, then the amount of own deduction of the reinsurer (assignor) is determined by the separate insurance contract (reinsurance) taking into account these conditions.

In that case the part of risk exceeding the maximum amount of own deduction of the reinsurer (assignor) is subject to repeated reinsurance in full.

11. In case of recognition of the insurance contract (reinsurance) on which the subsequent transfer of risk is performed invalid or insignificant the reinsurer (assignor) takes all necessary measures for return of reinsurance award, commission fee insurance (reinsurance) the broker, the branch of the insurance nonresident broker of the Republic of Kazakhstan or other payments connected with the conclusion of it the agreement of reinsurance or their parts.

12. If the agreement of reinsurance contains conditions on suspension, the termination of insurance protection or agreement cancelation of reinsurance in case of non-execution or improper execution of the obligations of the Parties defined by the agreement, in case of improper execution or non-execution of such obligations, the amount of own deduction of the reinsurer (assignor) is determined taking into account these conditions, during such suspension, the termination of insurance protection or from expected date of agreement cancelation of reinsurance.

12-1. (Reinsurance) pool is created by Strakhova in form of business of particular partnership based on cooperation agreement of the insurance (reinsurance) organizations of the participants jointly performing insurance activity on separate class, type of insurance or certain insurance risk (further - cooperation agreement).

13. Control of activities of insurance (reinsurance) pool is exercised of the insurance (reinsurance) organization, or the insurance broker attracted to management of the activities of insurance (reinsurance) pool which assumed (assumed) power of the leading insurance (reinsurance) organization according to cooperation agreement (further - the leading insurance (reinsurance) organization).

In process of management of activities of insurance (reinsurance) pool the leading insurance (reinsurance) organization performs:

1) the conclusion, change and early agreement cancelation of joint insurance (joint reinsurance) if it is provided by cooperation agreement;

2) accounting of insurance premiums and insurance payments, including conducting financial accounting on insurance premiums and insurance payments separately for each insurer (reinsurer) and the insurer (overcautious person);

3) receipt of insurance premiums under the signed agreements of joint insurance (joint reinsurance) and transfer of the got insurance premiums to the insurance (reinsurance) participating organizations to the terms determined in cooperation agreement;

4) organization of process for settlement of losses;

5) the organization of process of underwriting of the accepted risks;

6) obtaining, check and the organization of exchange of information on obligations of participants of insurance (reinsurance) pool and the leading insurance (reinsurance) organization, and also on execution (termination) of obligations of participants of insurance (reinsurance) pool;

7) provision of information in the organization for forming and maintaining the database for forming of the database of insurance statistics in the cases and procedure provided by cooperation agreement.

If functions of the leading insurance (reinsurance) organization are performed by the insurance broker which is not the supplier of information for forming of the database according to Item 3 of article 80 of the Law of the Republic of Kazakhstan "About insurance activity" function on provision of information in the organization for forming and maintaining the database for forming of the database of insurance statistics is assigned to participants of insurance (reinsurance) pool according to cooperation agreement;

8) other functions and powers provided by cooperation agreement.

Information on the leading insurance (reinsurance) organization, on change of list of participants of insurance (reinsurance) pool goes the leading insurance (reinsurance) organization to the organization for forming and maintaining the database within five working days from the date of appointment of the leader of the insurance (reinsurance) organization, change of list of participants of insurance (reinsurance) pool.

14. Joining of the new participant of insurance (reinsurance) pool is drawn up by the supplementary agreement to cooperation agreement which is signed by the acting participants of insurance (reinsurance) pool and the new participant. The supplementary agreement is integral part of cooperation agreement.

Joint insurance agreement obligations, concluded until its accession to cooperation agreement do not extend to the new participant of insurance (reinsurance) pool if other is not provided in cooperation agreement.

15. In cases of transfer by the participant of insurance (reinsurance) pool of insurance portfolio on class (type) of insurance which was object of activity of insurance (reinsurance) pool, to other participants according to article 37-1 of the Law of the Republic of Kazakhstan "About insurance activity" or deprivations of the participant of the license on class (type) of insurance which was object of activity of insurance (reinsurance) pool, its obligations are redistributed and performed by the acting participants of insurance (reinsurance) pool according to cooperation agreement.

The procedure for exception of the participant of insurance (reinsurance) pool in the cases which are not connected with events of the stipulated in Article 37-1 Law of the Republic of Kazakhstan "About insurance activity" or deprivation of the participant of the license is determined by class (type) of insurance which was object of activity of insurance (reinsurance) pool by cooperation agreement.

16. The notification on the conclusion of cooperation agreement and supplementary agreements to it signed by the authorized person of the leading insurance (reinsurance) organization goes to authorized body in the form of the electronic copy of the document and on paper within ten calendar days from the date of the conclusion.

Data on insurance (reinsurance) pool, including information on accession to it of new participants, exception of participants, are subject to placement on official Internet resources of the leading insurance (reinsurance) organization and his participants within ten calendar days from the date of change of list of participants of insurance (reinsurance) pool.

17. In case of loss occurrence under the agreement of joint insurance (joint reinsurance) the insurer (insured, the beneficiary), the reinsurer imposes requirement about insurance payment to the leading insurance (reinsurance) organization if other is not provided by cooperation agreement, with application of documents, confirming the fact of loss occurrence.

The procedure for settlement of insured events is determined by the leading insurance (reinsurance) organization and participants of insurance (reinsurance) pool in cooperation agreement.

The decision on implementation of insurance payment or refusal in implementation of insurance payment is accepted by participants of insurance (reinsurance) pool according to cooperation agreement and it is carried to the insurer (insured, the beneficiary), the reinsurer the leading insurance (reinsurance) organization.

18. For the conclusion, maintaining, execution, the termination of agreements of joint insurance (joint reinsurance), the organizations and carrying out calculations and settlement by participants of insurance (reinsurance) pool are used electronic information systems of insurance (reinsurance) pool in the cases provided by cooperation agreement.

Electronic information systems of insurance (reinsurance) pool are created by participants of insurance (reinsurance) pool and (or) the leading insurance (reinsurance) organization for the purposes of activities of this insurance (reinsurance) pool and are controlled the leading insurance (reinsurance) organization.

The leading insurance (reinsurance) organization ensures safety, reliability and confidentiality of information containing in electronic information system and also provides transfer of the information system and (or) information containing in electronic information system including in case of change of the leading insurance (reinsurance) organization.

The leading insurance (reinsurance) organization provides access for participants of insurance pool to electronic information system taking into account the appropriate right of the access necessary for accomplishment of the obligations provided in cooperation agreement by them.

The leading insurance (reinsurance) organization provides to authorized body the round-the-clock information access in electronic information system without possibility of correction of data.

For maintenance of operability of electronic information system, recovery of electronic information system in case of accident and other force majeure circumstances, in insurance (reinsurance) pool backup of information containing in electronic information system is made. Storage of backup copy of information containing in electronic information system is performed according to cooperation agreement.

In case of change of the leader of the insurance (reinsurance) organization the electronic information system and information containing in it are subject to transfer to again appointed leader of the insurance (reinsurance) organization or one of participants of insurance (reinsurance) pool according to the procedure, defined by cooperation agreement.

 

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