Taking into consideration this issue, the Insurance Payments Guarantee Fund was founded. The main task of the Fund is to protect the clients' interests of insurance companies whose licenses were revoked, as well as to monitor the financial conditions of insurance companies - members of the Fund.

The Insurance Payments Guarantee Fund was established in August 2003 through the adoption of the suitable law. The National Bank of the Republic of Kazakhstan was the first shareholder of the Fund. The Fund makes payments of the obligations of the liquidated insurance companies on the guaranteed insurance classes.

The guaranteed insurance classes are the mass types of insurance such as: MTPL, civil liability of carriers', the third party liability for tour operators and tour agents.

And, since October 2008, the Fund assumed responsibility to compensate damages caused to life and health of the insured as a result of road accidents with an unknown guilty of accident.

Due to the effective activity of the Fund, the Fund's assets are constantly growing. Thus, at the beginning of 2016 the assets of the Fund reached KZT 11,871 million, its own capital - KZT 3,775 million, the total guarantee reserve - KZT 7,409 million and the net profit - KZT 3,071 million.

During its operation, the Fund made guarantee payments for the obligations of five insurers forced to be liquidated, including the big one, "Altyn Polis", whose MTPL market share was 35% at the moment of liquidation.

During the 8 years of operation, the volume of compensations paid for damages caused to life and health reached KZT 20.1 million, given the fact that the reserve volume was KZT 2.1 billion.

The guarantee reserves (overall and by insurance classes) show sustainable growth. For example, the reserves for damages caused to life and health totaled KZT 7.2 billion; for MTPL - KZT 6.2 billion or 16.5% of the total insurance reserves of insurance companies formed for this type of insurance and 135% of the amount of insurance reserves of the largest insurance company by the market share.

At present, the total Fund's reserves are able to cover almost 43% of the total amount of insurance reserves owned by the insurance companies - participants in the guarantee systems of MTPL. Moreover, after the liquidations of five insurance companies, the Fund has never used its own capital and didn't attract extraordinary contributions; that indicates a sufficient capitalization of the Guarantee Fund.

On the same note, the positive dynamics of the guarantee reserves growth is due to the increase in the MTPL premiums and agreements, the change in the calculation of GWP rates and, most importantly, to the absence of liquidation of insurance companies for 4 years.

Nevertheless, the possibility of payments by the Fund is dependent on the financial stability of insurance companies.

At present, the risks of the insurance industry have increased mainly due to the growth in operating costs. Thus, since January 1st, 2016 the Fund decided to introduce a differentiated amount of the contribution rate on the basis of the scoring system of the risks of insurance companies. As a result, the high-risk participants in the system have to pay more.

The risks evaluation system is based on: indicators of scoring, including the volume of the guaranteed class in the portfolio of the insurer; the market share; the loss and expense ratios. On the calculated base rate, coefficients are applied individually, reflecting the risk level of the insurer.

The contribution rate for every insurance company is identified according to the calculations.

After the testing of this system it was determined that:

• 4 companies were included in the "Low risk" level, with a contribution rate of up to 1.2%;
• 7 insurers were included in the "Below average risk" level, with a contribution rate of up to 1.21-1.5%;
• 8 insurers ware included in the "Above average risk" level, with a contribution rate of up to 1.5-2.0%;
• 3 companies were included in the "High risk" level, with a contribution rate starting at 2.0%.

Moreover, in the future the Fund will become the «Bigdata» center, accumulating information about the insurance market and the guaranteed insurance classes in order to evaluate the financial stability of insurance companies.

The Insurance Payments Guarantee Fund is constantly developing and now it is being discussed if the Fund may extend its guarantee mandate and take on additional functions.

The regulator of the insurance market announced plans to establish the National Motor Insurance Bureau in the Republic of Kazakhstan, a project which will be implemented on the basis of the Guarantee Fund with the further assistance of the international Green Card System.

This will allow the Republic of Kazakhstan to become a part of the international motor insurance infrastructure, to get access to advanced technology and to insurance products.