In any country around the world the state regulates insurance activities. The goal of the government regulation is to ensure the smooth establishment and effective operation of the insurance market, as well as creation of all conditions for the operation of insurance companies and respect of the interests of policyholders.
Insurance activities in Kyrgyzstan are the licensed type of activity, which means that the insurance companies should carry out insurance activities only if they have the appropriate license. One of the basic principles of licensing is licensing on the basis of conditions that meet the requirements provided for each type of licenses equal for all subjects.
Currently, the licensing of insurance activities in Kyrgyzstan is carried out by the State Service for regulation and supervision of financial markets under the Kyrgyz government.
Licenses are issued for the implementation of voluntary and compulsory personal insurance, property insurance and liability insurance. If an insurance company is dealing only with re-insurance, the license is issued only for reinsurance activity.
A separate license is issued for each type of insurance. Certain types of insurance that the insurer is entitled to do are specified in the license. Licenses are issued for an unlimited period unless otherwise specified in the license and are valid throughout Kyrgyzstan. The license for insurance activities cannot be passed to third parties.
A company can obtain a license for insurance activities only if the company's board members, chief accountant and auditor meet the criteria of reliability and meet the level of qualification requirements provided by the Kyrgyz government.
Only those insurance organizations are eligible to carry out insurance activities that were created as a joint stock company (open or closed).
The state agency that is involved in licensing of insurance activities may suspend the activities or revoke the license for the following reasons:
- If the insurance company unreasonably fails to fulfill obligations to pay insurance premiums to policyholders;
- If the insurance company repeatedly violates Kyrgyzstan's legislation on insurance procedures;
- If the insurance company does not take any measures to improve its financial situation;
- If the insurance company carries out activities prohibited by the Law on Insurance Procedure in Kyrgyzstan;
- If within 12 months after obtaining the license the insurance company has not started work on this type of insurance.
Today, there are about 19 insurance companies in Kyrgyzstan. According to the State Service for Regulation and Supervision of financial markets under the Kyrgyz government, property insurance that amounted to 76.1% of the total insurance premium took the major share of the insurance premium.
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KYRGYZSTAN: Licensing of insurance activities in the Kyrgyz Republic
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