These Credit Rating (rating) actions follow the announcement on 15 August 2018, of the company's shareholder decision to merge its sister insurer, Kazkommerts Life Insurance Company, JSC (Kazkommerts Life), into Halyk-Life. The decision to merge follows the 2017 acquisition of JSC Kazkommertsbank, Kazkommerts Life's parent, by JSC Halyk Bank, Halyk-Life's parent. The merger is subject to regulatory approvals and is expected to complete by early 2019.
In addition, there is material uncertainty as to the impact on the company's prospective revenue, pre-tax earnings and market position of recent regulatory changes that prevent the company from reinsuring workers' compensation business with local non-life insurers, as well as the decision by a key distribution partner to gradually shift its business to another insurer.
The ratings will remain under review until A.M. Best has completed its evaluation of the impact of these events on the company's rating fundamentals and the merger transaction has closed.
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