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

of November 23, 2022 No. 102

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

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 the insurance market to which changes and additions are made, according to appendix to this resolution (further - the List).

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) 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 after ten calendar days after day of its first official publication, except for Item 3 of the List which becomes effective after sixty calendar days 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 November 23, 2022 No. 102

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

1. Bring in the resolution of Board 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, branch of the insurance (reinsurance) nonresident organization of the Republic of Kazakhstan" (it is registered in the Register of state registration of regulatory legal acts at No. 13056) the following changes and amendment:

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

state Item 1 in the following edition:

"1. In Rules the following concepts are used:

1) the accounting period – twelve months preceding reporting date;

2) net spendings on payment of commission fee - expenses on payment of commission fee for insurance activity less the commission fees received from the overcautious person;

3) the commission fees earned from the overcautious person - the commission fees earned from the overcautious person, added in the accounting period, increased by the size of the postponed commission fees from the overcautious person for the beginning of the accounting period and reduced by the size of the postponed commission fees from the overcautious person by the end of the reporting period;

4) the suffered losses without the overcautious person's share – net amount of payments, expenses on settlement of insurance losses, and also net amount of changes in reserves of losses;

5) expenses on payment of commission fee for insurance activity - the expenses on payment of commission fee for insurance activity added in the accounting period, increased by the size of the postponed commission expenses for the beginning of the accounting period and reduced by the size of the postponed commission expenses by the end of the reporting period;

6) expenses on settlement of insurance losses – expense amount of the insurance (reinsurance) organization of the expert, consulting or other services suffered for payment connected with assessment of the size and decrease in damage (harm) caused to valuable interests of the insurer which arose in connection with insured events;

7) net reserve of not earned premium - reserve of not earned premium without the overcautious person's share;

8) net spendings – net spendings on payment of commission fee, total and administrative expenses, and also the other expenses corresponding to the similar items of expenses provided in appendix 10 to the Rules of accounts presentation by the financial organizations approved by the resolution of Board of National Bank of the Republic of Kazakhstan of January 28, 2016 No. 41, registered in the Register of state registration of regulatory legal acts at No. 13504 (further – the resolution No. 41);

9) net amount of payments - the amount of insurance payments without share of the overcautious person and less compensation according to the recourse requirement;

10) authorized body - the state body performing regulation, control and supervision of the financial market and the financial organizations;

11) the suffered losses - insurance payments, expenses for settlement of insurance losses, and also change in reserves of losses;

12) net amount of changes in reserves of losses – changes in reserves of losses without the overcautious person's share;

13) expenses - expenses on payment of commission fee for insurance activity, total and administrative expenses, and also the other expenses corresponding to the similar items of expenses provided by the resolution No. 41.";

state Item 9 in the following edition:

"9. The unprofitability coefficient for the accounting period without share of the overcautious person is calculated on each class (type) of insurance separately and on all insurance portfolio of the insurance (reinsurance) organization on formula:

The net earned insurance premiums used for calculation of coefficient of unprofitability for the accounting period without the overcautious person's share are calculated as the insurance premiums added in the accounting period without share of the overcautious person and taking into account the expenses connected with agreement cancelation of insurance and the income connected with agreement cancelation, transferred to reinsurance, increased by the size of net reserve of not earned premium for the beginning of the accounting period and reduced by the size of net reserve of not earned premium for the end of the same period.

When calculating coefficient of unprofitability for the accounting period without the overcautious person's share the suffered losses without share of the overcautious person and the net earned insurance premiums belong to one accounting period.

When calculating of the net earned insurance premiums the overcautious person's share in reserve of not earned premium is considered in full, without deduction of the commission fee earned from the overcautious person.";

add with Item 14-1 of the following content:

"14-1. The unprofitability coefficient without share of the overcautious person is analyzed by the actuary in case of review of calculation of insurance rates taking into account requirements of the Instruction on requirements to evaluation methods and calculation principles of insurance rates for classes (types) of insurance of the insurance (reinsurance) organizations, branches of the insurance (reinsurance) nonresident organizations of the Republic of Kazakhstan approved by the resolution of Board of the Agency of the Republic of Kazakhstan on regulation and supervision of the financial market and the financial organizations of March 25, 2006 No. 85, registered in the Register of state registration of regulatory legal acts at No. 4204.";

state Item 17 in the following edition:

"17. The unprofitability coefficient according to policies without share of the overcautious person is calculated on each class (type) of insurance separately or on all insurance portfolio of the insurance (reinsurance) organization on formula:

The net earned insurance premiums are calculated as the insurance premiums according to the insurance contracts (reinsurance) which became effective within 12 (twelve) months preceding the accounting period without share of the overcautious person and taking into account the expenses connected with agreement cancelation of insurance and the income connected with agreement cancelation, transferred to reinsurance reduced by the size of net reserve of not earned premium on reporting date according to the insurance contracts (reinsurance) which became effective within 12 (twelve) months preceding the accounting period.

The suffered losses without share of the overcautious person and the net earned insurance premiums belong to the insurance contracts (reinsurance) which became effective within 12 (twelve) months preceding the accounting period.

When calculating coefficient of unprofitability for policies the suffered losses without share of the overcautious person and the net earned insurance premiums are considered for the last 2 (two) years preceding reporting date.

When calculating of the net earned insurance premiums the overcautious person's share in reserve of not earned premium is considered in full without deduction of the commission fee earned from the overcautious person.".

2. Bring in the resolution of Board of National Bank of the Republic of Kazakhstan of May 30, 2016 No. 140 "About approval of Rules of calculation of the class for the bonus-malus system appropriated to the insurer (insured) on compulsory insurance of civil responsibility of owners of vehicles" (it is registered in the Register of state registration of regulatory legal acts at No. 13928) the following changes and amendment:

state heading in the following edition:

"About approval of Rules of calculation and application of coefficient on the bonus-malus system for calculation of insurance premium for compulsory insurance of civil responsibility of owners of vehicles";

to state preamble and Item 1 in the following edition:

"According to the Law of the Republic of Kazakhstan "About compulsory insurance of civil responsibility of owners of vehicles" the Board of National Bank of the Republic of Kazakhstan DECIDES:

1. Approve Rules of calculation and application of coefficient on the bonus-malus system for calculation of insurance premium for compulsory insurance of civil responsibility of owners of vehicles.";

in Rules of calculation of the class for the bonus-malus system appropriated to the insurer (insured) on compulsory insurance of civil responsibility of owners of the vehicles approved by the specified resolution:

state heading in the following edition:

"Rules of calculation and application of coefficient on the bonus-malus system for calculation of insurance premium for compulsory insurance of civil responsibility of owners of vehicles";

state Items 1 and 2 in the following edition:

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