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Insurance Market
May 1998
| Insurance legislation
|
The insurance legislation consists of the applicable articles of Kazakhstan's Civil Code, Decree of the President of Kazakhstan of October 3, 1995 "On Insurance ", and other applicable Kazakhstani regulations. Pursuant to the above presidential decree, companies engaged in life insurance are not allowed to provide other insurance services. Foreign legal entities, including foreign insurance organisations, and expatriates have the right to participate in Kazakhstani insurance and reinsurance companies. However, the aggregate share of foreign investors in the authorised capital of such a company may not exceed 50%. Foreign insurance organisations are not allowed to operate as direct insurers. Currently, the insurance market in Kazakhstan is at a new phase of development. And the outlook of this market is impressive. The growth of insurance reserves of Kazakhstani insurers is very high. The share of risks in reinsurance operations is, accordingly, reducing. Thus, such operations accounted for 24.9 % in 1996, while only 7.7% of them were registered in the first nine months of 1997. The expansion by the government of different types of compulsory insurance and ongoing pension reform stimulate the development of Kazakhstan's insurance market. |
Dynamics of Insurance Reserves Growth
Source : KS Research
| Insurance market development | The number of companies occupied in life insurance (two so far) will most likely increase. Their growth will be due to the fact that only these companies will be able to insure assets of non-government pension funds (NGPF), operations with NGPFs' resources, individual deposits in NGPFs, and life risks. |
| Insurance of petroleum operations | Insurance of petroleum operations will be most profitable. There will be very few restrictions for such operations. First of all, a company should have minimum authorised capital of 40,000 conventional indexes and secondly, experience in petroleum risks management. The most prominent firm among these companies is an Oil Insurance Company founded by Kazakhstani firms. Its authorised capital is US $721 mln. The majority of insurance companies are presently based in Almaty. Agricultural, petroleum and other kinds of compulsory insurance will expand the locations of insurers. |
| Further publications | Currently, the research team of Kazkommerts Securities is working on the insurance sector report, this research will soon be available upon request. |
© Kazkommerts Securities 1998. Please cite source when quoting. This report has been prepared by Kazkommerts Securities and provided solely for information purposes to recipients only. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. This information does not constitute an offer to buy or sell securities. Kazkommerts Securities or its affiliated persons may be buying, selling or holding long or short positions, acting as investment bankers, be represented on the Board of the issuers in securities mentioned herein. This report is not intended for the use of private investors. Investment in Kazakhstan markets is an extremely risky activity and many persons, physical and legal, may be completely or partially restricted from dealing in the Kazakhstan securities markets. |
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