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

of December 27, 2024 No. 88

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 amendment 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 1 of the List which becomes effective since April 1, 2025.

It is approved Bureau of national statistics of the Agency on strategic planning and reforms of the Republic of Kazakhstan

It is approved Ministry of digital development, innovations and aerospace industry of the Republic of Kazakhstan

It is approved Ministry of Finance of the Republic of Kazakhstan

Appendix

to the Resolution of Board of the Agency of the Republic of Kazakhstan on regulation and development of the financial market of December 27, 2024 No. 88

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

1. Bring in 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" (the following change is registered in the Register of state registration of regulatory legal acts at No. 17462):

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 approved by the specified resolution to state in edition according to appendix 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).

2. Bring in the resolution of Board of the Agency of the Republic of Kazakhstan on regulation and developments of the financial market of March 30, 2020 No. 43 "About approval of Rules of issue of consent of authorized body on regulation, control and supervision of the financial market and the financial organizations on appointment (election) of the leading employee of the insurance (reinsurance) organization, branch of the insurance (reinsurance) nonresident organization of the Republic of Kazakhstan, insurance holding, insurance broker, branch of the insurance nonresident broker of the Republic of Kazakhstan and "Fund of Guaranteeing Insurance Payments" joint-stock company, including criteria of lack of faultless goodwill, the documents necessary for receipt of consent" (the following change is registered in the Register of state registration of regulatory legal acts at No. 20248):

in Rules of issue of consent of authorized body on regulation, control and supervision of the financial market and the financial organizations on appointment (election) of the leading employee of the insurance (reinsurance) organization, branch of the insurance (reinsurance) nonresident organization of the Republic of Kazakhstan, insurance holding, insurance broker, branch of the insurance nonresident broker of the Republic of Kazakhstan and "Fund of Guaranteeing Insurance Payments" joint-stock company, including criteria of lack of faultless goodwill, the documents necessary for receipt of consent approved by the specified resolution:

state Item 3 in the following edition:

"3. The list of leading employees of the insurance (reinsurance) organization, the insurance broker, branch of the insurance (reinsurance) nonresident organization of the Republic of Kazakhstan, branch of the insurance nonresident broker of the Republic of Kazakhstan, insurance holding and "Fund of Guaranteeing Insurance Payments" joint-stock company which are subject to approval of authorized body is determined by Items 1, of the 1-1 and 14 article 34 of the Law on insurance activity and Item 1 of article 4-1 of the Law on Fonda of guaranteeing.

Are not subject to approval of authorized body:

1) the representatives of authorized body who are part of governing body of "Fund of Guaranteeing Insurance Payments" joint-stock company;

2) the leading employees of the insurance (reinsurance) organization, insurance broker, branch of the insurance (reinsurance) nonresident organization of the Republic of Kazakhstan, branch of the insurance nonresident broker of the Republic of Kazakhstan, insurance holding and "Fund of Guaranteeing Insurance Payments" joint-stock company transferred from the position approved with authorized body or again appointed to subordinate position within the same body of the insurance (reinsurance) organization, insurance broker, branch of the insurance (reinsurance) nonresident organization of the Republic of Kazakhstan, branch of the insurance nonresident broker of the Republic of Kazakhstan, insurance holding and "Fund of Guaranteeing Insurance Payments" joint-stock company;

3) the leading employees of the insurance (reinsurance) organization transferred from the position of the head or the member of executive body or the head or the member of governing body approved with authorized body or again appointed to position of other head of the insurance (reinsurance) organization who is exercising coordination and (or) control of activities of two and more structural divisions of the insurance (reinsurance) organization and having right to sign of documents based on which the insurance and (or) investing activities are carried out;

4) the leading employees of branch of the insurance (reinsurance) nonresident organization of the Republic of Kazakhstan transferred from the position of the head or the deputy manager approved with authorized body or again appointed to position of other head of the branch of the insurance (reinsurance) nonresident organization of the Republic of Kazakhstan which is exercising coordination and (or) control of activities of two or more structural divisions of the branch of the insurance (reinsurance) nonresident organization of the Republic of Kazakhstan and having right to sign of documents based on which the insurance activity is carried out;

5) the leading employees of insurance holding transferred from the position of the head or the member of executive body or the head or the member of governing body approved with authorized body or again appointed to position of other head of the insurance holding exercising coordination and (or) control of activities affiliated (affiliated) the organizations (organizations) and (or) the organization (organizations) in which, (which) the insurance holding has considerable equity participation.

The leading employees specified in subitems 2), 3), 4) and 5) of this Item are not subject to approval on condition of their compliance to the requirements established by articles 16-2 and 34 of the Law of the Republic of Kazakhstan "About insurance activity", the subitem 20) of Article 1, item 4 of Article 54, Item 2 of article 59 of the Law of the Republic of Kazakhstan "About joint-stock companies" (further - the Join-stock companies law), article 4-1 of the Law on Fonda of guaranteeing, article 9 of the Law of the Republic of Kazakhstan "About financial accounting and the financial reporting" (further - the Law on financial accounting).".

3. Bring in the resolution of Board of the Agency of the Republic of Kazakhstan on regulation and development of the financial market of October 12, 2020 No. 97 "About approval of Requirements to Rules of internal control for the purpose of counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction for the insurance (reinsurance) organizations, insurance brokers, societies of mutual insurance, Export credit agency of Kazakhstan, branches of the insurance (reinsurance) nonresident organizations of the Republic of Kazakhstan and branches of insurance nonresident brokers of the Republic of Kazakhstan" (the following change and amendment is registered in the Register of state registration of regulatory legal acts at No. 21425):

in Requirements to Rules of internal control for the purpose of counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction for the insurance (reinsurance) organizations, insurance brokers, societies of mutual insurance, Export credit agency of Kazakhstan, branches of the insurance (reinsurance) nonresident organizations of the Republic of Kazakhstan and branches of the insurance nonresident brokers of the Republic of Kazakhstan approved by the specified resolution:

state Item 5 in the following edition:

"5. According to the procedure, established by internal documents of the organization and (or) insurance broker, the governing body of the organization (authorized body of insurance broker) designates person, from among leading employees of the organization and (or) insurance broker or other heads of the organization and (or) insurance broker there is not lower than the level of head of the relevant structural division of the organization and (or) insurance broker, responsible for realization and observance of rules of internal control (further - the ranking officer) which has the higher education, length of service in the organization and (or) insurance broker (except for length of service on positions of technical or support personnel) at least one year or length of service in the field of POD/FT at least two years, or length of service in the field of provision and (or) regulation of financial services at least three years, and faultless goodwill according to the Law on insurance activity, and also workers or division of the organization which competence questions POD/FT enter (further – division on POD/FT) are determined.

Control of observance of requirements of the legislation for POD/FT is imposed on the ranking officer performing labor activity on permanent basis in the organization and (or) insurance broker";

add with Item 5-1 of the following content:

"5-1. The ranking officer controlling observance of requirements of the legislation for POD/FT at least 1 (one) time in 3 (three) years passes test for confirmation of the gained knowledge of questions POD/FT.".

4. Bring in the resolution of Board of the Agency of the Republic of Kazakhstan on regulation and development of the financial market of September 12, 2022 No. 63 "About approval of requirements to risk management system and internal control in "Fund of Guaranteeing Insurance Payments" joint-stock company (it is registered in the Register of state registration of regulatory legal acts at No. 29698) the following changes:

in the Requirements to risk management system and internal control in "Fund of Guaranteeing Insurance Payments" joint-stock company approved by the specified resolution:

state Item 2 in the following edition:

"2. In Requirements the following concepts are used:

1) the management reporting – the instrument of internal control and assessment of activities of Fund;

2) guaranteeing reserves – indemnification reserve, reserve of guaranteeing insurance payments for industry "general insurance" and reserve of guaranteeing insurance payments for industry "life insurance", according to the Law of the Republic of Kazakhstan "About Fund of guaranteeing insurance payments";

3) komplayens-culture - culture of observance by Fund and its workers of requirements of the civil, tax legislation of the Republic of Kazakhstan, the legislation of the Republic of Kazakhstan on Fonda, on insurance and insurance activity, about state regulation, control and supervision of the financial market and the financial organizations, about financial accounting and the financial reporting, about joint-stock companies, and also internal documents of Fund;

4) komplayens-risk – probability of emergence of losses owing to non-compliance by Fund and its workers of requirements of the civil, tax legislation of the Republic of Kazakhstan, the legislation of the Republic of Kazakhstan on Fonda, on insurance and insurance activity, about state regulation, control and supervision of the financial market and the financial organizations, about financial accounting and the financial reporting, about joint-stock companies, and also internal documents of Fund;

5) corporate management - set of the processes which are providing management of activities of Fund, including the relations between shareholders, the board of directors, executive body, and other bodies of Fund for the benefit of shareholders.

The corporate management system allows to organize distribution of powers and responsibility in Fund, and also to construct corporate decision making process;

6) limitation – establishment of high-quality and quantitative restrictions of the accepted risks, establishment of restrictions for transactions (transactions) of Fund.

In case of limitation the following parameters are determined:

indicator on which the limit is set;

method of measure calculation on which the limit is set;

limiting (maximum, minimum) measure value;

7) conflict of interest – contradiction between private interests of the worker (official) of Fund and its ex-officio full powers under which private interests of the worker (official) of Fund can lead to non-execution or improper execution of the ex-officio full powers by it;

8) stress tests – methods of measurement of potential influence on financial position of Fund and safety of means of reserves of guaranteeing, exclusive, but possible events which can exert impact on activities of Fund;

9) risk – possibility of emergence of the circumstances causing uncertainty or impossibility of receipt of the expected results of activities of Fund, emergence of expenses (losses) on own assets and reserves of guaranteeing;

10) system of risks assessment – set of the coefficients intended for complex financial analysis of Fund and safety of means of reserves of guaranteeing;

11) division on risk management - the structural division of Fund performing functions on monitoring, providing and tracking of risks, implementation of effective management practice with risks and internal control;

12) risk management system of Fund – set of the interconnected elements: procedures, techniques, the information systems united in single process for management of the realized and potential risks within risk level, acceptable for the shareholder, and directed to goal achievement and tasks on risk management. In the course of identification and management of the realized and potential risks influencing activities of Fund the board of directors, board, heads and the staff of structural divisions within the fixed competence and responsibility participate;

13) policy on risk management – set of the internal documents including the policy and (or) other internal documents determining the necessary criteria, parameters, approaches, the principles, standards, procedures and mechanisms providing effective functioning of Fund and compliance of its activities of strategy and to admissible risk level;

14) identification of risk – process of stay, creation of the list and description of risk elements;

15) the card of risk – the graphical and text description of risks of Fund, including downside risks of the reserves of guaranteeing located in the table according to which on one "axis" force of impact or the importance of risk, and on another probability or frequency of its origin is specified;

16) risk limit – means of quantitative or high-quality restriction of the accepted risk;

17) risk culture – the processes, procedures, internal regulations of Fund directed to understanding, acceptance, management and control of risks for the purpose of minimization of their influence on financial condition of Fund and also ethical standards and standards of professional activity of all participants of organizational structure. The risk culture supplements the existing approved procedures, processes and mechanisms of organization activity and is the integral component of risk management system;

18) risk - the manager – the permanent member of staff Fonda performing functions on monitoring, providing and tracking of risks, implementation of effective management practice with risks and internal control;

19) risk measurement – determination of degree of risk probability and the sizes of potential expenses (losses) which are performed by means of assessment of effects and probability of approach of event in the mathematical way by means of application of probability theory and the law of large numbers on the basis of statistical information;

20) authorized body – authorized body on regulation, control and supervision of the financial market and the financial organizations;

21) internal audit – indivisible element of managerial supervision by means of which the service of internal audit (internal auditor) estimates the financial reporting, and also other data and information which are giving in to quantitative and quality standard of activities of Fund for the purpose of further reflection of degree of its compliance to the legislation of the Republic of Kazakhstan on insurance and insurance activity on Fund of guaranteeing insurance payments, about joint-stock companies, to internal documents, the international professional standards of internal audit;

22) internal control is the process performed by the board of directors, collegiate organs, board, employees of Fund, aimed at providing goal achievement on the following categories:

efficiency of activities;

ensuring safety of means of reserves of guaranteeing and their target use;

reliability, completeness and timeliness of the financial reporting and other management reporting;

compliance with law of the Republic of Kazakhstan about insurance and insurance activity, about Fund of guaranteeing insurance payments, about joint-stock companies and internal documents of Fund;

23) internal control system – the set of control procedures, actions and techniques providing:

effective conducting financial and economic activities of Fund;

observance of requirements of the legislation of the Republic of Kazakhstan on insurance and insurance activity, about Fund of guaranteeing insurance payments, about joint-stock companies and internal documents of Fund;

effective separation of responsibility;

timely execution by employees of Fund of requirements of internal documents;

ensuring safety of property;

prevention and identification of the facts of fraud and managerial mistakes;

timeliness of preparation, reliability and completeness of the financial reporting and other reporting.";

state Item 5-1 in the following edition:

"5-1. Committees of the board of directors of Fund perform activities according to the regulations approved by the board of directors of Fund determining their powers and competence, operating procedure including restrictions on terms of work of board members of Fund in committees.

The board of directors of Fund provides periodic rotation of members of committees of the board of directors (except for independent experts) in order to avoid concentration of powers and for promotion of new views on the questions entering competence of committees of the board of directors.

By results of consideration of the board of directors of questions by committees recommendations to the board of directors with possible options of decision making, with disclosure of positive and negative factors and effects from adoption of such decisions prepare.

Committee meetings of the board of directors are held in presentia. Participation of members of committees of the board of directors in meetings by means of the technical means of communication provided by internal documents of Fund is allowed.

Committee meetings of the board of directors are recorded and signed by the corporate secretary and the chairman of committee of the board of directors.

For consideration of questions of strategic planning by Fund the separate committee of the board of directors is created.

Concerning strategic planning the independent director Fonda having work experience on executive positions in the field of IT technologies or on two and more sectors of the financial market, at least three years is appointed the chairman of committee of the board of directors.

Competence of committee of the board of directors on strategic planning includes consideration and provision of recommendations to the board of directors on the following questions:

1) assessment and monitoring on strategy implementations and execution of the strategic plan for the purpose of increase in efficiency of activities of Fund;

2) provision of recommendations about realization of the developed strategy in specific plans of activities of Fund, resource allocation, for the purpose of achievement of strategic plans and long-term tasks and their execution;

3) preliminary consideration and monitoring of the Development plan for Fund, entering of adjustments into the Development plan for Fund;

4) development of offers on realization of strategic objectives in the field of information technologies and their execution;

5) development and periodic review of internal documents of Fund, for the purpose of ensuring their compliance to the legislation of the Republic of Kazakhstan;

6) consideration of other questions connected with strategic planning and development of Fund, established by internal documents of Fund.

Concerning audit the independent director Fonda having work experience in the field of audit, accounting and the financial reporting term, at least three years is appointed the chairman of committee of the board of directors.

Requirements to Chairmen and powers of other committees of the board of directors are (in the presence) determined by internal documents of Fund.";

state Item 16 in the following edition:

"16. The policy on risk management, is developed by division on risk management (risk manager) and provides regular carrying out stress testing, scenario analyses and determines, but is not limited to the following:

1) availability as a part of organizational structure of Fund of investment committee (investment committees), divisions on risk management (risk manager);

2) qualification requirements to leading employees;

3) qualification requirements to the workers directly related to risk management, including requirements for availability of the higher education and one of the following international certificates in the field of management of risks (FRM (Financial Risk Manager) - the Financial risk manager, PRM (Professional Risk Manager) - the Professional risk manager, CFA - the Certified financial analyst) and (or) the certificate according to the standard of the ISO 31000 series or length of service at least one year in the field of risk management or internal audit in the financial organizations for the risk manager or the division manager for risk management during creation in Fund of division on risk management;

4) powers and functional obligations on risk management of collegiate organs, services of internal audit (internal auditor), board, division on risk management (risk manager);

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