Insurance - The Times Of Central Asia

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By End of Year, Kyrgyz Authorities Want to Insure All Houses in the Country

The Chairman of the Kyrgyzstan Cabinet of Ministers, Akylbek Japarov, instructed specialized government agencies to ensure the safety of all houses in the country, especially those in mudflow-prone areas. At the meeting devoted to natural disaster risk management, Japarov assigned specialized government agencies to ensure the safety of all houses in Kyrgyzstan. Thus, according to the head of the Cabinet of Ministers, the authorities will provide financial protection to citizens in case of natural disasters. This year, powerful mudslides flooded the south of Kyrgyzstan and the Issyk-Kul region. Over 5,000 households, dozens of social facilities, and hundreds of kilometers of roads were damaged. “Insurance will provide financial protection for citizens in such situations and minimize the consequences for families who lost their homes. Insurance will be an important tool to help people recover faster from natural disasters and reduce the burden on the state budget,” Japarov said. The head of the Cabinet emphasized that due to global warming, the number of natural disasters will continue to grow. Compulsory home insurance will ensure protection for citizens. It should be noted that the law on compulsory real estate insurance came into force in Kyrgyzstan on August 26, 2024. According to the law, residents must insure their real estate against fire and natural disasters. The State Insurance Organization (SIO) explained to The Times of Central Asia that legislative changes would be implemented gradually. The law on compulsory home insurance was first adopted in 2016, but the authorities postponed its implementation. There is no system of fines for lack of such insurance, at least not yet. “It is not profitable for private firms to engage in home insurance, as the rate is only 0.12%. That is, the cost of insurance is KGS 600 ($8), while payouts can be multi-million: KGS 500,000 ($6,000) for a village and KGS 1 mln ($12,000) for a city. Today in Kyrgyzstan, 143 thousand residences are insured,” the SIO noted.

Society Economy Legislation Insurance Quality of Life

Kyrgyzstan Introduces Law on Compulsory Home and Car Insurance

From September 2024, when re-registering cars, owners must provide a contract on compulsory civil liability insurance. The same applies to real estate. The law was adopted eight years ago, but has been delayed under public pressure. According to the State Insurance Organisation (SIO), the introductory amount of car insurance is 1,680 KGS ($20). The final amount will be affected by driving experience, driver age, and engine displacement. The legal department of the State Insurance Organization explained to The Times of Central Asia that a vehicle's insurance policy will be required when it is re-registered with the state authorities. “Employees of the State Insurance Organization are at the places of registration of motor vehicles throughout the country and will issue MTPL insurance policies on the spot. The average amount of MTPL insurance for passenger cars will range from 2,000 to 4,000 KGS ($25-45),” said Ulukbek Nishonov, head of the legal department of the State Insurance Organization. Fifteen private insurance organizations will also insure cars. The law on compulsory car insurance in Kyrgyzstan was adopted more than eight years ago. Nevertheless, no sanctions have been imposed for non-compliance with the law. Most Kyrgyz motorists considered compulsory insurance a “waste of money.” Now, the authorities have figured out how to force everyone to insure their cars, even those without insurance policies or car registration. At the same time, ordinary citizens will not be fined for the lack of insurance. Officials claim that compulsory insurance is a social project. It is worth noting that the law on compulsory real estate insurance also came into force on August 26, 2024. Here, just as in the case of car insurance, citizens will be obliged to insure their property against fire and natural disasters only when re-registering housing. In other cases, it can be done voluntarily. At the same time, the state holds a monopoly on residential property insurance.

Finance Economy Insurance

Kazakhstan Insurers Sign Partnership with Warren Buffett’s Company

Nomad Insurance, a company from Kazakhstan, has announced a strategic partnership with Berkshire Hathaway Specialty Insurance (BHSI), which is part of the Berkshire Hathaway holding company headed by legendary American investor, businessman and philanthropist, Warren Buffett. "BHSI, a giant in the insurance and reinsurance industry with a turnover of more than $74.6 billion, is known for its measured and cautious approach to partner selection. The company enters into partnership agreements with only one insurance partner in each of the 178 countries where it operates. This event is especially significant due to the personality of Warren Buffett, who is the chairman and CEO of Berkshire Hathaway," Nomad Insurance stated. As representative of the company, Shakir Iminov noted, this is a landmark event for Kazakhstan's insurance market, which speaks about its growing attractiveness to international investors.

Legislation Insurance Central Asia Kyrgyzstan

Kyrgyz Authorities Seeking Monopoly on Insurance, Industry Group Says

The Kyrgyz Association of Insurers is sounding the alarm that private insurance companies may soon be out of work due to government interference. According to a decree signed by Kyrgyz President Sadyr Japarov, all state bodies and local governments are now instructed to insure all their property with the State Insurance Organization (JSC SIO) in order to develop the national insurance market. "The Cabinet of Ministers of the Kyrgyz Republic will define JSC SIO as the national operator for reinsurance, including export risks, within the framework of cooperation with the Eurasian Reinsurance Company," the document says. The Kyrgyz Association of Insurers appealed to human rights activists to assist in protecting their interests. Private insurers are sure that the new law violates their rights and doesn't comply with Kyrgyzstan's current legislation. "According to insurers, the principles of entrepreneurial activity established by the legislation of the country, such as non-interference of state bodies in the activities of business entities, are violated. In addition, the state guarantees for the protection of the rights of entrepreneurs equal rights and opportunities to access financial resources -- as well as the creation of conditions for the protection and development of competition -- are being violated," - said the International Business Council, which was engaged by Kyrgyz private insurance companies on the matter. The current law "On Organization of Insurance in the Kyrgyz Republic" prohibits interference in insurance activities. Private insurance brokers and business owners argue that the state is playing an unfair game at the legislative level, forcing state-owned companies to insure their property with the SIO. Besides, the financial means to underwrite risk and pay out possible insurance claims are miniscule to the capitalization of private insurers. Last year, the authorities increased the capitalization of the SSO to 1 billion som, and this year they will allocate another 300 million som by presidential decree. "In the prescribed manner by 2027 to find and gradually allocate funds in the amount of 5 billion som to JSC "SIO" to increase the authorized capital... By 2027, the annual profit in the amount of 100 percent, received from the activities of JSC "SIO," will be directed to increase the authorized capital at the expense of the distribution of budget revenues and expenditures," the law reads. Today, 15 insurance companies, including SSS -- as well as several Chinese and Kazakhstani insurers -- operate in the Kyrgyz market. People familiar with the situation who spoke to The Times of Central Asia say most of the major national companies are already insured with SIO, meaning that only civil insurance lines -- like health and life -- and auto insurance remain for private insurers.

Insurance Economy Climate Change Natural disaster Agriculture Kazakhstan

World Bank supports catastrophe insurance market in Kazakhstan

ASTANA (TCA) — The World Bank Board of Directors has approved a US $5 million grant by the Global Environment Facility for providing technical support to the Government of Kazakhstan and the local insurance market to help address the effects of climate change on the national economy through the development of an advanced insurance market infrastructure, the World Bank said. Continue reading

Kyrgyzstan Insurance Natural disaster Housing Transport

Kyrgyzstan introduces compulsory real estate and vehicles insurance

BISHKEK (TCA) — As Kyrgyzstan faces state budget deficit the Government is trying to raise budget revenues at the expense of the citizens. In February 2016, compulsory insurance of residential real estate and motor transport will be introduced in Kyrgyzstan. Continue reading