RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of September 12, 2019 No. 157

About modification and amendments in some regulatory legal acts of the Republic of Kazakhstan concerning regulation of insurance activity

For the purpose of enhancement of regulatory legal acts of the Republic of Kazakhstan the Board of National Bank of the Republic of Kazakhstan DECIDES:

1. Approve the List of regulatory legal acts of the Republic of Kazakhstan concerning regulation of insurance activity to which changes and additions, according to appendix to this resolution are made.

2. To provide to department of the insurance market and actuarial calculations in the procedure established by the legislation of the Republic of Kazakhstan:

1) together with Legal department 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 "Institute of the legislation and legal information of the Republic of Kazakhstan" 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 department of external communications press services of National Bank to 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 Birtanov E. A.

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

It is approved Committee according to the statistics Ministries of national economy of the Republic of Kazakhstan "___" _________ 2019

Appendix

to the Resolution of Board of National Bank of the Republic of Kazakhstan of September 12, 2019 No. 157

The list of regulatory legal acts of the Republic of Kazakhstan concerning regulation of insurance activity to which changes and additions are made

1. Bring in the resolution of Board of National Bank of the Republic of Kazakhstan of October 20, 2015 No. 194 "About approval of the standard agreement of retirement annuity, establishment of the Method of calculation of insurance premium and insurance payment from insurance company under the contract of retirement annuity, admissible expense level of insurance company for conducting case on the signed agreements of retirement annuity, and also rate of indexation of insurance payment" (it is registered in the Register of state registration of regulatory legal acts at No. 12318, it is published on December 10, 2015 in information system of law of Ad_let) the following changes:

in the Method of calculation of insurance premium and insurance payment from the insurance company for the agreement of retirement annuity approved by the specified resolution:

2, 3 and 4 appendices 1 to state Items in the following edition:

"2. Factor of current value taking into account expenses of insurance company:

where:

 - factor of current value;

c - expenses on conducting case from the size of insurance premium (as a percentage);

d - expenses on conducting case from the amount of insurance payment (as a percentage).

3. Sufficiency of pension accruals and insurance premium under the agreement of retirement annuity are calculated by the following formula:

where:

The joint venture - insurance premium;

MONDAY - the amount of pension accruals;

SV - the amount of insurance payment is not lower than the size of minimum pension established by the law on the republican budget for the corresponding financial year existing for date of the conclusion of the agreement of retirement annuity;

m - frequency of insurance payments;

- factor of current value;

c - expenses on conducting case from the size of insurance premium (as a percentage);

d - expenses on conducting case from the amount of insurance payment (as a percentage).

4. The amount of periodic insurance payment under the agreement of retirement annuity is determined by the following formula:

where:

The joint venture - insurance premium;

SV - the amount of insurance payment is not lower than the size of minimum pension established by the law on the republican budget for the corresponding financial year existing for date of the conclusion of the agreement of retirement annuity;

m - frequency of insurance payments;

- factor of current value;

c - expenses on conducting case from the size of insurance premium (as a percentage);

d - expenses on conducting case from the amount of insurance payment (as a percentage).".

2. Bring in the resolution of National Bank of the Republic of Kazakhstan of December 19, 2015 No. 240 "About approval of Rules of calculation of the coefficients characterizing unprofitability (unprofitability coefficient, cost ratio, the combined coefficient) of the insurance (reinsurance) organization" (it is registered in the Register of state registration of regulatory legal acts at No. 13056, it is published on March 5, 2016 in information system of law of Ad_let) the following changes:

in Rules of calculation of the coefficients characterizing unprofitability (unprofitability coefficient, cost ratio, the combined coefficient) of the insurance (reinsurance) organization, approved by the specified resolution:

state appendix 1 in edition according to appendix 1 to the List of regulatory legal acts of the Republic of Kazakhstan concerning regulation of insurance activity to which changes and additions are made (further - the List);

state appendix 2 in edition according to appendix 2 to the List.

3. Bring in the resolution of Board of National Bank of the Republic of Kazakhstan of January 31, 2019 No. 13 "About approval of Requirements to forming, method of calculation of insurance reserves and their structure" (it is registered in the Register of state registration of regulatory legal acts of the Republic of Kazakhstan at No. 18290, it is published on February 25, 2019 in Reference control bank of regulatory legal acts of the Republic of Kazakhstan) the following changes and amendments:

state Item 6 in the following edition:

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

in Requirements to forming, method of calculation of the insurance reserves and their structure approved by the specified resolution:

state item 4 in the following edition:

"4. The actuary no later than 10 (tenth) working days of the month following reporting quarter represents in time to National Bank of the Republic of Kazakhstan by means of the automated information system of National Bank of the Republic of Kazakhstan the reasons by calculation of insurance reserves electronically (Microsoft Word format) certified by means of the digital signature of the actuary.

Reasons by calculation of insurance reserves are constituted in any form and contain:

parameters of reserve basis with appendix of reasons in each parameter;

reasons at the choice of method of calculation of reserve occurred, but the unclaimed losses and reserve which occurred, but still the unclaimed losses, with statement of information on quantity considered in calculation of the periods of approach of losses, frequency of losses, to the choice of coefficient of development of losses, smoothing of severe losses, additional obligations and calculation of correction coefficient according to Item 16 of Requirements;

reasons on the amounts of the expected expenses connected with consideration and settlement of the amount of insurance payments for the declared requirements;

reasons on adjustment of the loss considered in calculation of average (average market) value of the paid claims according to Item 22 of Requirements (in case of their availability in the accounting period);

reasons and calculation of the amount of the obligations of the insurance (reinsurance) organization connected with origin for settlement date of additional risks according to the signed insurance contracts (reinsurance), the insurance reserves which are not provided when forming;

results of the carried-out test for adequacy of reserves of losses, including the retrospective analysis on the basis of data for the last 12 (twelve) months, separately on each class of insurance and on the insurance portfolio in general;

conclusions about sufficiency (insufficiency) of insurance reserves and in case of insufficiency of insurance reserves, the analysis of the reasons of insufficiency;

when forming share of the overcautious person in insurance reserves under the agreements of reinsurance providing transfer more than 80 (eighty) percent of insurance premium - the conclusion of division of reinsurance about availability of confirmation of the overcautious person (overcautious persons), the stipulated in Item 53 Requirements signed by the leading employee of the insurance (reinsurance) organization into whose power monitoring of questions of division of reinsurance is included;

other assumptions and assumptions used by the actuary when calculating insurance reserves and the overcautious person's shares in insurance reserves, and the data necessary for specifying in reasons according to the actuary.";

state Item 9 in the following edition:

"9. RNP is determined by method of proportion by summing of the not earned premiums calculated under each agreement.

Not earned premium is determined by method of proportion by each agreement as the work of insurance premium under the contract for the relation of effective period of insurance protection, unexpired on reporting date (in days) to effective period of insurance protection (in days) from the date of recognition of insurance premium in financial accounting as the income until the end of action of insurance protection:

The joint venture - insurance premium;

T1 - the number of days during which insurance protection from the date of recognition of insurance premium in financial accounting as the income until the end of action of insurance protection according to the insurance contract (reinsurance) is effective;

T2 - the number of the days of action of insurance protection which expired from the moment of recognition of insurance premium in financial accounting as the income before settlement date (inclusive).

When calculating prudential standard rates according to the resolution of Board of National Bank of the Republic of Kazakhstan of December 26, 2016 No. 304 "About establishment of normative values and techniques of calculations of prudential standard rates of the insurance (reinsurance) organization and insurance group and other regulations and limits, the list, forms, obligatory to observance, terms of submission of the reporting on accomplishment of prudential standard rates by the insurance (reinsurance) organizations and insurance groups, Rules of submission of the reporting on accomplishment of prudential standard rates by the insurance (reinsurance) organizations and insurance groups, requirements to the shares acquired by the insurance (reinsurance) organizations, the affiliated organizations of the insurance (reinsurance) organizations or insurance holdings (to shares in the authorized capital) legal entities, the list of bonds of the international financial institutions acquired by insurance holdings the minimum required rating for the bonds acquired by insurance holdings, and the list of rating agencies, and also the list of the financial instruments (except for shares and shares in the authorized capital) acquired by the insurance (reinsurance) organizations" (registered in the Register of state registration of regulatory legal acts at No. 14794) (further - the resolution No. 304) calculation of RNP for the agreement of compulsory insurance of the worker from accidents in case of execution of labor (office) obligations by it is perfromed proceeding from the size of the insurance premium calculated according to article 17 of the Law on compulsory insurance of the worker from accidents.";

2) of Item 11 to state the subitem in the following edition:

"2) Bornhuetter-Ferguson method according to Calculation of reserve occurred, but unclaimed losses by Bornhuetter-Ferguson method in form according to appendix 11 to Requirements.

Bornkhyyuttera-Ferguson's method is based on method of chain ladder, distribution of obligations by which is based on the basis of payments (the paid losses) or the suffered losses, and determination of the expected size of anticipatory damages.

The expected size of anticipatory damages is equal to the work of earned premium and coefficient of unprofitability which size constitutes at least average value of the coefficients of unprofitability according to policies calculated on the complete financial years preceding to the periods of approach of losses considered by the insurance (reinsurance) organization in case of distribution of obligations in form according to appendix 11 to Requirements.";

add with Item 11-1 of the following content:

"11-1. The unprofitability coefficient according to policies is calculated as the relation of size of the suffered losses, including expenses on settlement of losses, according to the insurance contracts (reinsurance) which became effective in the corresponding financial year to the earned insurance premiums according to the specified insurance contracts (reinsurance).

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