The main goal of the Draft Law is to develop the insurance market and the securities market through introduction of new products, further digitalization of services, improving quality of consumer and investor protection, and bringing current legislation in line with best international practices.
It is noted that at present the insurance sector demonstrates a stable GWP growth and high financial stability. Insurance market assets have grown by 74% over the past three years and amount to KZT 1.9 trillion (EUR 4.02 billion) as of May 2022, or 2.2% of GDP. However, the main task remains to expand coverage of the population and businesses with insurance services, for which the draft law suggests introduction of new socially important life insurance products.
Secondly, the draft law involves increasing availability of insurance services through further digitalization of the insurance industry. The next stage of digitalization is introduction of online claim settlement.
An important innovation will be introduction of a flexible pricing mechanism for compulsory motor insurance. The current insurance rates were set in 2007 and have not been updated since then. Transition to a flexible pricing system will allow timely updating insurance rates, considering actual accident rate in the regions of Kazakhstan.
Thirdly, the draft law expands the list of guaranteed classes of insurance to increase confidence in the sector. The Guarantee of the Fund for Guaranteeing Insurance Payments will cover all compulsory and socially important classes of insurance. Now the Fund's guarantee covers only 5 insurance types.
It is also proposed to improve quality of protection of the rights of consumers of insurance services. To do this, the draft law provides for introduction of mandatory pre-trial settlement by the insurance ombudsman of disagreements between clients and insurance companies.
The draft law will ensure dynamic growth of the insurance and securities markets to develop the economy and improve welfare of citizens.
Source: Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan.
*EUR 1 = KZT 472.09 (01.05.2022)