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 April 30, 2007 No. 130

About establishment of requirements to availability of risk management systems in the insurance (reinsurance) organizations

For the purpose of implementation of the Law of the Republic of Kazakhstan of February 19, 2007 "About modification and amendments in some legal acts of the Republic of Kazakhstan concerning protection of the rights of minority investors", the Board of the Agency of the Republic of Kazakhstan on regulation and supervision of the financial market and the financial organizations DECIDES: (daleeagentstvo)

1. In this resolution the following concepts are used:

1) bek-testing - methods of check of efficiency of procedures of risks measurement, with use of historical data on insurance activity (reinsurance) organization and comparison of the calculated results with the current (actual) results from the specified activities;

2) investment risks are different types of risks which directly or indirectly influence investment management of the insurance (reinsurance) organization. They treat execution, return, liquidity and structure of investments of the insurance (reinsurance) organization and include:

currency risk - the risk of emergence of expenses connected with change of the foreign exchange rates when implementing of the activities by the insurance (reinsurance) organization;

credit risk - risk of financial expenses as a result of insolvency of debtors, and also changes of credit ratings of the companies issuing bonds (in investment portfolio), partners (reinsurance) and intermediaries;

interest risk - risk of emergence of expenses owing to adverse change of rates of remuneration;

market risk - possibility of the losses connected with adverse movements of the financial markets;

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