THE RESOLUTION OF BOARD OF THE AGENCY OF THE REPUBLIC OF KAZAKHSTAN ON REGULATION AND DEVELOPMENT OF THE FINANCIAL MARKET

of September 20, 2021 No. 90

About modification and amendments in some regulatory legal acts of the Republic of Kazakhstan concerning regulation of activities of participants of the insurance market and subjects of the security market

According to article 49-1 of the Law of the Republic of Kazakhstan "About the security market", Items 3 and 4 of Article 15-2, subitems 24) and 37) Articles 43, Item 10 and 10-1 of Article 46, Items 3 and 4 of article 48 of the Law of the Republic of Kazakhstan "About insurance activity" Board of the Agency of the Republic of Kazakhstan on regulation and development of the DECIDES: financial market

1. Approve the List of regulatory legal acts of the Republic of Kazakhstan concerning regulation of activities of participants of the insurance market and subjects of the security market to which changes and additions are made, according to appendix to this resolution (further - the List).

2. To provide to department of methodology and prudential regulation of the financial organizations 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) placement of this resolution on official Internet resource of the Agency of the Republic of Kazakhstan on regulation and development of the financial market after its official publication;

3) within ten working days after state registration of this resolution submission to Legal department of data on execution of the action provided by the subitem 2) of this Item.

3. To impose control of execution of this resolution on the supervising vice-chairman of the Agency of the Republic of Kazakhstan on regulation and development of the financial market.

4. This resolution becomes effective since October 1, 2021, except for paragraphs of fifty third, fifty fourth, fifty fifth, fifty sixth, fifty seventh, fifty eighth, fifty ninth, sixtieth, sixty first, sixty second, sixty third, sixty fourth, sixty fifth, sixty sixth, sixty seventh, sixty eighth, sixty ninth, seventieth, seventy first, seventy second, seventy third, seventy fourth, seventy fifth, seventy sixth, seventy seventh, seventy eighth, seventy ninth, eightieth, eighty first, eighty second, eighty third, eighty fourth, eighty fifth, eighty sixth, eighty seventh, eighty eighth, eighty ninth, ninetieth Item 2 of the List which become effective after day of its first official publication.

Appendix

to the Resolution of Board of the Agency of the Republic of Kazakhstan on regulation and development of the financial market of September 20, 2021 No. 90

The list of regulatory legal acts of the Republic of Kazakhstan concerning regulation of activities of participants of the insurance market and subjects of the security market to which changes and additions are made

1. Bring in the resolution of Board of National Bank of the Republic of Kazakhstan of August 27, 2013 No. 214 "About approval of Rules of forming of risk management system and internal control for the organizations performing broker and dealer activities in the security market, activities for management of investment portfolio" (the following change is registered in the Register of state registration of regulatory legal acts of the Republic of Kazakhstan at No. 8796):

in Rules of forming of risk management system and internal control for the organizations performing broker and dealer activities in the security market, activities for management of investment portfolio, approved by the specified resolution:

state Item 3 in the following edition:

"3. The banks of the second level performing broker and dealer activities in the security market create risk management system according to the resolution of Board of National Bank of the Republic of Kazakhstan of November 12, 2019 No. 188 "About approval of Rules of forming of risk management system and internal control for banks of the second level, branches of nonresident banks of the Republic of Kazakhstan", registered in the Register of state registration of regulatory legal acts at No. 19632.

The insurance companies performing activities in the industries "life insurance" having the license of authorized body on regulation, control and supervision of the financial market and the financial organizations (further - authorized body) on implementation of activities for management of investment portfolio in the security market, create risk management system according to the resolution of Board of National Bank of the Republic of Kazakhstan of August 27, 2018 No. 198 "About approval of Rules of forming of risk management system and internal control for the insurance (reinsurance) organizations, branches of the insurance (reinsurance) nonresident organizations of the Republic of Kazakhstan", registered in the Register of state registration of regulatory legal acts at No. 17462.

Requirements of Rules extend to the insurance companies performing activities in the industries "life insurance" having the license of authorized body for implementation of activities for management of investment portfolio in the security market regarding procedure for adoption of investment decisions concerning the assets created at the expense of part of the insurance premiums (insurance premiums) got from insurers for the purposes of investment and income (losses) gained from their investment according to the insurance contracts providing condition of participation of the insurer in investments, and also procedure for creation and contents of the recommendation and investment decision for such assets.".

2. Bring in 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, requirements, obligatory to observance, 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 financial instruments (except for shares and shares in the authorized capital), acquired by the insurance (reinsurance) organizations" (it is registered in the Register of state registration of regulatory legal acts at No. 14794) the following changes:

in the Normative values and technique of calculations of prudential standard rates of the insurance (reinsurance) organization and insurance group and other regulations and limits, obligatory to observance, approved by the specified resolution:

state Items 12 and 13 in the following edition:

"12. Procedure of payments of the minimum size of margin of solvency with use of "method of awards":

1) calculation is perfromed proceeding from the amount of the cumulative insurance premiums accepted according to insurance contracts (reinsurance) for the previous financial year, or the cumulative earned insurance premiums for the previous financial year from which for calculation the largest size is accepted;

2) the amount of cumulative insurance premiums (cumulative earned premiums) accepted by the insurance (reinsurance) organization on the class "compulsory insurance of civil responsibility of owners of vehicles" is subject to increase by 50 (fifty) percent;

3) the amount of cumulative insurance premiums (cumulative earned premiums) accepted by the insurance (reinsurance) organization under agreements of reinsurance on the class "compulsory insurance of the worker from accidents in case of execution of labor (office) obligations by it" is subject to increase by 50 (fifty) percent;

4) the amount of cumulative insurance premiums (cumulative earned premiums) calculated according to subitems 1), 2) and 3) of this Item decreases by expense amount on payment of commission fee for insurance activity, and also by the amount of the corporate income tax;

5) the amount of the insurance premiums calculated according to subitems 1), 2), 3) and 4) of this Item in the amount of, not exceeding 3 500 000 000 (three billion five hundred million) tenges, is multiplied by 18 (eighteen) percent, the remained amount of exceeding is multiplied by 16 (sixteen) percent.

The received results are summed up and adjusted on the correction coefficient calculated according to the subitem 6) of this Item;

6) the correction coefficient is calculated as the relation of the amount of the cumulative insurance payments (less the overcautious person's share in insurance payments) added for the previous 3 (three) financial years to the amount of the cumulative insurance payments added for the previous 3 (three) financial years. If the size of the correction coefficient received as a result of calculation is less than 0,5 (zero whole five tenth), then for calculation 0,5 is accepted (zero whole five tenth).

The correction coefficient is not applied when calculating the minimum size of margin of solvency if for the previous 3 (three) financial years the insurance (reinsurance) organization did not perform insurance payments.

13. Procedure of payments of the minimum size of margin of solvency with use of "method of payments":

1) for calculation the amount of the cumulative insurance payments added for the previous 3 (three) financial years is used.

The insurance company which is engaged only in risks insurance, specified in subitems 13) and 14) of Item 3 of article 6 of the Law, for calculation uses the amount of cumulative insurance payments for the previous 7 (seven) financial years;

2) the amount of the cumulative insurance payments performed by the insurance (reinsurance) organization on the class "compulsory insurance of civil responsibility of owners of vehicles" is subject to increase by 50 (fifty) percent;

3) the amount of cumulative insurance payments increases by the amount of reserve of the declared, but not settled losses for the end of the previous financial year and decreases:

on the amount of reserve of the declared, but not settled losses for the end of financial year, for 3 (three), preceding accounting financial year;

for the insurance companies specified in the paragraph the second the subitem 1) of this Item, - on the amount of reserve of the declared, but not settled losses for the end of financial year, in 7 (seven) years preceding accounting financial year;

4) for calculation of the minimum size of margin of solvency of the insurance (reinsurance) organization it is used:

the one third part of the amount received according to the paragraph to the second the subitem 3) of this Item;

for the insurance companies specified in the paragraph the second the subitem 1) of this Item - the one seventh part of the amount received according to the paragraph to third the subitem 3) of this Item;

5) the amount of the insurance payments calculated according to subitems 1), 2), 3) and 4) of this Item in the amount of, not exceeding 2 500 000 000 (two billion five hundred million) tenges, is multiplied by 26 (twenty six) percent, the remained amount of exceeding is multiplied by 23 (twenty three) percent.

The received results are summed up and adjusted on the correction coefficient calculated according to the subitem 6) of Item 12 of Standard rates.

If the insurance (reinsurance) organization did not perform insurance payments during the term specified in the subitem 1) of this Item, then calculation of the minimum size of margin of solvency is perfromed without use of "method of payments".";

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