THE LETTER OF THE AGENCY OF THE REPUBLIC OF KAZAKHSTAN ON REGULATION AND SUPERVISION OF THE FINANCIAL MARKET AND THE FINANCIAL ORGANIZATIONS

of July 29, 2010 No. 06-03-11/820/14608

Concerning management system and risks of internal control in the insurance (reinsurance) organizations

Agency of the Republic of Kazakhstan on regulation and supervision of the financial market and the financial organizations (further - the Agency), having considered your letter No. 12-2-3/03/2121 of 21.06.2010, reports the following.

On question 1

According to Item 7 of the Instruction on requirements for availability of risk management systems and internal control in the insurance (reinsurance) organizations approved by the resolution of Board of the Agency of February 1, 2010 No. 4 (further - the Instruction), in the insurance (reinsurance) organization committees in case of the board of directors concerning internal audit, risk management, appointment and remuneration can be created, комплаенс, disclosures of information, investments.

The committee is working advisory body of the insurance (reinsurance) organization to which functional duties consideration and decision making on the main activities of the insurance (reinsurance) organization or key questions according to the powers assigned by the board of directors belongs.

Committees consist of the board members and experts having necessary professional knowledge for work in specific committee. The structure of committees affirms the solution of the board of directors.

According to Item 8 of the Instruction for the purpose of forming of adequate risk management systems and internal control in the insurance (reinsurance) organization the following collegiate advisory bodies are created:

underwriting council;

council on asset-liability management.

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