Article 26. Insurance Holding, a major participant in the insurance (reinsurance) organization of the Insurance Law

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1. No person, independently or jointly with another (other) person(s), may (may not) directly or indirectly own, use and (or) dispose of ten or more percent of the outstanding (minus preferred and repurchased by an insurance (reinsurance) organization) shares of an insurance (reinsurance) organization, and also have control or the ability to influence decisions made by an insurance (reinsurance) organization in the amount of ten percent or more of the outstanding (minus preferred and repurchased by an insurance (reinsurance) organization) shares of an insurance (reinsurance) organization without obtaining the prior written consent of the authorized body. This requirement does not apply to the State or the national managing holding company, as well as to the cases provided for by this Law.

Non-resident legal entities of the Republic of Kazakhstan may obtain the consent of the authorized body to acquire the status of an insurance holding company or a major participant in an insurance (reinsurance) organization if they have the minimum required rating from one of the rating agencies. The minimum required rating and the list of rating agencies are established by a regulatory legal act of the authorized body.

This rating is not required for a non-resident legal entity of the Republic of Kazakhstan that indirectly owns ten or more percent of the outstanding shares of an insurance (reinsurance) organization or indirectly votes ten or more percent of the voting shares of an insurance (reinsurance) organization through ownership (voting) of shares (stakes in the authorized capital) of a non-resident legal entity of the Republic of Kazakhstan., which is a major participant in an insurance (reinsurance) organization, directly owning ten or more percent of the outstanding shares of an insurance (reinsurance) organization or having the opportunity to vote with ten or more percent of the voting shares of an insurance (reinsurance) organization having the minimum required rating.

A non-resident insurance holding company of the Republic of Kazakhstan that directly owns twenty-five or more percent of the outstanding (minus preferred and repurchased by an insurance (reinsurance) organization) shares of an insurance (reinsurance) organization or has the opportunity to vote directly with twenty-five or more percent of the voting shares of an insurance (reinsurance) organization may be only a non-resident financial organization of the Republic of Kazakhstan, subject to consolidated supervision in the country of its location.

2. The rules for issuing and revoking consent to acquire the status of a major participant in an insurance (reinsurance) organization or insurance holding company, as well as the requirements for documents submitted to obtain such consent, are determined by the authorized body.

2-1. In order to obtain consent to acquire the status of an insurance holding company or a major participant in an insurance (reinsurance) organization, a fee is paid, the amount and payment procedure of which are determined by the tax legislation of the Republic of Kazakhstan.

3. The requirements for obtaining the status of an insurance holding company or a major participant in an insurance (reinsurance) organization do not apply to a person recognized as indirectly owning (having the ability to vote, determine decisions and (or) influence decisions made by virtue of a contract or otherwise) shares of an insurance (reinsurance) organization through ownership (having the ability to vote, determine decisions and (or) influence decisions made by virtue of a contract or otherwise) by shares of another financial institution, having the status of a major participant (insurance holding) of the specified insurance (reinsurance) organization.

The requirements for obtaining the status of an insurance holding company or a major participant in an insurance (reinsurance) organization do not apply to a non-resident of the Republic of Kazakhstan who indirectly owns (has the ability to vote, determine decisions and (or) influence decisions made by virtue of a contract or otherwise) shares of an insurance (reinsurance) organization through ownership (having the opportunity to vote, to determine decisions and (or) influence decisions made by virtue of a contract or otherwise) by shares of another non-resident financial institution of the Republic of Kazakhstan, which is subject to consolidated supervision in the country of its location and has the status of a major participant (insurance holding company) of the specified insurance (reinsurance) organization.

The consent of the authorized body to acquire the status of an insurance holding company is granted on the terms and in accordance with the procedure defined for a major participant in an insurance (reinsurance) organization.

4. To obtain consent, a person wishing to become a major participant in an insurance (reinsurance) organization must submit to the authorized body an application for acquiring the status of a major participant in an insurance (reinsurance) organization containing information established by a regulatory legal act of the authorized body, including information on the conditions and procedure for acquiring shares of an insurance (reinsurance) organization, including previously purchased shares, as well as a description of the sources and funds used to purchase shares, accompanied by the documents and information specified in paragraphs 6, 6-1, 7, 8, 9 and 10 of this article.

5. Large participants of an insurance (reinsurance) organization – individuals pay for shares of an insurance (reinsurance) organization in an amount not exceeding the value of the property belonging to them by right of ownership. In this case, the value of the property (minus the previously acquired shares of the insurance (reinsurance) organization) must not be less than the total value of the previously acquired and acquired shares of the insurance (reinsurance) organization.

6. To obtain consent to acquire the status of a major participant in an insurance (reinsurance) organization, an individual submits the following documents:

1) copies of documents confirming the procedure and conditions for the acquisition of shares.

The source used to purchase shares of an insurance (reinsurance) company is:

income earned from entrepreneurial, labor, or other paid activities;

the applicant's monetary savings, documented.

In addition to the sources specified in part two of this subparagraph, money received in the form of donations, winnings, and income from the sale of gratuitously received property may be used to purchase shares of an insurance (reinsurance) organization in an amount not exceeding twenty-five percent of the value of the shares of the insurance (reinsurance) organization to be purchased.

When acquiring shares of an insurance (reinsurance) organization at the expense of property received as a gift, the applicant submits information about the donor and the sources of origin of the specified property from the donor.;

1-1) a copy of the document confirming payment of the consent fee, except in cases of payment through the electronic government payment gateway;

2) excluded by the Law of the Republic of Kazakhstan dated 25.11.2019 No. 272-VI (effective ten calendar days after the date of its first official publication);

3) information on legal entities in which it is a major participant, in the form provided for by the regulatory legal act of the authorized body;

4) a recapitalization plan for an insurance (reinsurance) organization in the event of a possible deterioration in the financial situation of the insurance (reinsurance) organization;

5) excluded by the Law of the Republic of Kazakhstan dated 25.11.2019 No. 272-VI (effective ten calendar days after the date of its first official publication);

6) information on income and property, information on existing debts for all obligations of the applicant in accordance with the form established by the regulatory legal act of the authorized body, and an individual resident of the Republic of Kazakhstan, as well as a notarized or certified copy of the declaration of assets and liabilities submitted by the state revenue authority in accordance with the procedure established by the tax legislation of the Republic of Kazakhstan, – within thirty calendar days preceding the date of submission to the authorized body of an application for acquiring the status of a major participant in an insurance (reinsurance) organization, and a notarized or certified copy of the income and property declaration submitted by the state revenue authority in accordance with the procedure and deadlines established by the tax legislation of the Republic of Kazakhstan.

Information in the declaration of assets and liabilities is indicated as of the first day of the month of submission of the declaration of assets and liabilities.;

7) brief information about the applicant in the form prescribed by the regulatory legal acts of the authorized body, including information about education, employment, and impeccable business reputation. Non-resident individuals, in order to confirm their impeccable business reputation, submit a document confirming the absence of an outstanding or outstanding criminal record, issued by the relevant state authority of their country of citizenship, and stateless persons from their country of permanent residence (the date of issue of this document cannot be more than three months preceding the date of application);

8) written confirmation by the relevant state body of the country of residence of a non-resident individual of the Republic of Kazakhstan that the acquisition of shares of an insurance (reinsurance) organization resident in the Republic of Kazakhstan is permitted by the legislation of that country, or that such permission is not required.

6-1. In the event that an individual begins to meet the criteria of a major participant in an insurance (reinsurance) organization without obtaining the prior written consent of the authorized body on the basis of a donation agreement, when submitting an application for the acquisition of the appropriate status in accordance with the requirement established by paragraph 14 of this article, additional:

1) copies of documents confirming the conditions and procedure for donating shares to an insurance (reinsurance) organization;

2) the documents provided for in the sub-paragraphs 1-1), 3), 4), 6), 7) and 8) paragraph 6 of this article;

3) information on the value of the shares that are the subject of the donation agreement, determined by the appraiser in accordance with the legislation of the Republic of Kazakhstan.

In order to obtain consent to acquire the status of a major participant in an insurance (reinsurance) organization additionally by an individual who acquired shares of an insurance (reinsurance) organization as a result of a donation agreement, the following conditions are met as of the date of submission of the application for acquiring the status of a major participant in an insurance (reinsurance) organization:

1) the value of the property (minus the value of previously acquired shares of an insurance (reinsurance) organization) owned by an individual must not be less than the total value of the shares that are the subject of the donation agreement and the shares of the insurance (reinsurance) organization previously acquired by him;

2) income received from entrepreneurial, labor or other paid activities of an individual, as well as his documented monetary savings, amount to at least seventy-five percent of the value of donated shares of an insurance (reinsurance) organization, as determined by the appraiser.

7. To obtain consent to acquire the status of a major participant in an insurance (reinsurance) organization, a legal entity resident in the Republic of Kazakhstan submits the following documents:

1) copies of the decision of the relevant applicant's body on the acquisition of shares of an insurance (reinsurance) organization (in the absence of a decision on the Internet resource of the financial reporting depository);

2) information and supporting documents about persons (independently or jointly with other persons) who directly or indirectly own ten percent or more of the shares (stakes in the authorized capital) of a legal entity, as well as those who have the ability to determine the decisions of this legal entity by virtue of a contract or otherwise, or have control over;

3) the list of affiliated companies of the applicant (if there is no list on the Internet resource of the financial reporting depository);

4) the information and documents specified in subitems 1), 1-1), 3) and 4) of paragraph 6 of this Article;

5) excluded by the Law of the Republic of Kazakhstan dated 25.11.2019 No. 272-VI (effective after ten calendar days after the date of its first official publication); 6) excluded by the Law of the Republic of Kazakhstan dated 25.11.2019 No. 272-VI (effective after ten calendar days after the date of its first official publication);

7) brief information about the applicant's senior staff in the form prescribed by the regulatory legal acts of the authorized body, including information about education, work, and impeccable business reputation. Non-resident individuals, in order to confirm their impeccable business reputation, submit a document confirming the absence of an outstanding or outstanding criminal record, issued by the relevant state authority of their country of citizenship, and stateless persons from their country of permanent residence (the date of issue of this document cannot be more than three months preceding the date of application);

8) annual financial statements for the last two completed financial years, certified by an audit organization, as well as financial statements for the last completed quarter before submitting the relevant statement.

Annual financial statements are not submitted by the applicant if these statements are posted on the Internet resource of the financial reporting depository.;

9) excluded by the Law of the Republic of Kazakhstan dated 25.11.2019 No. 272-VI (effective ten calendar days after the date of its first official publication).

8. In order to obtain consent to acquire the status of a major participant in an insurance (reinsurance) organization, a non-resident legal entity of the Republic of Kazakhstan submits the following documents:

1) the information and documents specified in subitems 1), 1-1), 3) and 4) of paragraph 6 and subitems 1), 2), 3), 7) and 8) paragraph 7 of this article;

2) information on the credit rating of a legal entity assigned by one of the international rating agencies, the list of which is established by the authorized body, with the exception of the cases provided for in paragraph 1 of this Article.

In order to obtain consent to acquire the status of a major participant in an insurance (reinsurance) organization, a non-resident financial organization of the Republic of Kazakhstan, in addition to the documents specified in this paragraph, shall submit a written confirmation from the financial supervisory authority of the applicant's country of residence that the applicant is authorized to carry out financial activities within the framework of the legislation of that country, or a statement from the financial supervisory authority of the country the location of the applicant indicates that such a permit is not required under the legislation of this country.

9. In order to obtain consent to acquire the status of an insurance holding company, a non-resident financial institution of the Republic of Kazakhstan submits the following documents:

1) the information and documents specified in paragraph 8 of this Article;

2) written confirmation from the financial supervisory authority of the country of the applicant's location that a non-resident financial institution of the Republic of Kazakhstan is subject to consolidated supervision;

3) written permission (consent) from the financial supervisory authority of the country where the applicant is located to acquire the status of an insurance holding company by a non-resident financial institution of the Republic of Kazakhstan, or a statement from the authorized body of the relevant state stating that such permission (consent) it is not required by the legislation of the specified State.

9-1. A person wishing to become an insurance holding company, in addition to the documents and information provided for in paragraphs 7, 8, 9 and 10 of this article, submits an estimated calculation of the prudential standards of the insurance group in the event that the applicant's acquisition of the status of an insurance holding company will lead to the formation of an insurance group.

10. Individuals wishing to acquire the status of a major participant in an insurance (reinsurance) organization with a ownership interest of twenty-five percent or more of the outstanding (minus preferred and repurchased insurance (reinsurance) organization) shares, as well as legal entities wishing to acquire the status of an insurance holding company, in addition to the documents and information specified in this article, submit a business plan, the requirements for which are established by the authorized body, for the next five years.

11. Persons who are jointly a major participant in an insurance (reinsurance) organization are recognized as persons who collectively own ten or more percent of the outstanding (minus preferred and repurchased insurance (reinsurance) organizations) or who have the opportunity to directly or indirectly vote ten or more percent of the shares of an insurance (reinsurance) organization and:

1) jointly influencing the decisions of an insurance (reinsurance) organization by virtue of an agreement between them or otherwise;

2) being individually or mutually major participants in each other;

3) one of them is an official or representative of another person.;

4) one of them provided the other person with the opportunity to purchase shares of an insurance (reinsurance) organization in accordance with the contract concluded between them.;

5) who are close relatives or spouses;

6) one of them provided another person with the opportunity to purchase shares of an insurance (reinsurance) organization at the expense of money donated to them or property received free of charge.

If an insurance (reinsurance) organization is part of a banking conglomerate in accordance with the requirements of the banking legislation of the Republic of Kazakhstan, the insurance (reinsurance) organization is subject to consolidated supervision in accordance with the banking legislation of the Republic of Kazakhstan.

12. A decision on an application submitted to obtain the status of an insurance holding company or a major participant in an insurance (reinsurance) organization in accordance with the requirements of this article must be made by the authorized body within fifty working days after the application is submitted.

The authorized body is obliged to notify the applicant in writing of the results of its decision, and in case of refusal to grant consent to acquire the relevant status, the grounds for refusal are indicated in the written notification.

When granting consent to a person who is not a bank holding company or a bank to acquire the status of an insurance holding company, the authorized body simultaneously issues a permit for significant participation in the capital of an insurance (reinsurance) organization or the creation (acquisition) of a subsidiary insurance (reinsurance) organization.

13. The authorized body has the right to revoke the consent issued in accordance with this article by making a decision to revoke it within two months from the date of discovery of the fact that is the basis for revocation of consent, in case of detection of false information on the basis of which the consent was issued, or violations of the requirements of the legislation as a result of the acquisition by the applicant of the status of a major participant or insurance holding company of the Republic of Kazakhstan in the field of competition protection, or non-compliance by major participants of an insurance (reinsurance) organization or an insurance holding company with the requirements of this Law. In this case, the person to whom such a measure is applied is obliged, within six months, to reduce the number of shares of the insurance (reinsurance) organization owned by him to a level below that established by this article.

A person who has had his consent revoked in accordance with this article may not transfer shares of an insurance (reinsurance) organization to a third party for trust management.

If the persons in respect of whom the authorized body has decided to revoke the relevant consent fail to comply with the requirements of this paragraph, the authorized body has the right to apply to the court for these persons to comply with the requirements of the authorized body.

14. If a person meets the criteria of an insurance holding company, a major participant in an insurance (reinsurance) organization, without obtaining the prior written consent of the authorized body, he/she is not entitled to take any actions aimed at influencing the management or policy of the insurance (reinsurance) organization, and/or vote on such shares until it will not receive the written consent of the authorized body in accordance with the provisions of this article.

In this case, a person who meets the criteria of an insurance holding company, a major participant in an insurance (reinsurance) organization, is obliged to notify the authorized body within ten calendar days from the moment when he became aware that he meets the criteria of an insurance holding company, a major participant in an insurance (reinsurance) organization.

An application for the acquisition of the relevant status is submitted to the authorized body within thirty calendar days from the moment when it became known to it that it corresponds to the characteristics of an insurance holding company, a major participant in an insurance (reinsurance) organization, unless this person is going to alienate shares within the specified period. Information on the decision to alienate shares is provided to the authorized body immediately from the date of such decision.

If the authorized body refuses to grant consent to a person who meets the criteria of an insurance holding company, a major participant in an insurance (reinsurance) organization, the said person must, within six months of receiving the written notification, reduce the number of shares of the insurance (reinsurance) organization owned by him to a level below that established by this article.

14-1. If a person acquires the characteristics of a major participant in an insurance (reinsurance) organization or an insurance holding company without the written consent of the authorized body, the authorized body has the right to apply to this person the supervisory response measures provided for by this Law, including compulsory measures provided for in Article 53-4 of this Law, regarding the requirements for the sale of shares of an insurance (reinsurance) organization within a period not exceeding more than six months.

15. Shareholders who collectively own ten percent or more of the outstanding (minus preferred and repurchased by the insurance (reinsurance) organization) or voting shares of the insurance (reinsurance) organization and act on the basis of an agreement concluded between them providing for their decision-making on the following issues are not insurance holdings or major participants in an insurance (reinsurance) organization.:

1) convening an extraordinary general meeting of shareholders or filing a lawsuit to convene it if the Board of directors refuses to convene the general meeting of shareholders;

2) inclusion of additional issues in the agenda of the general meeting of Shareholders;

3) convening a meeting of the Board of Directors;

4) conducting an audit of an insurance (reinsurance) organization at its own expense.

16. Persons who are jointly an insurance holding company are recognized as persons who collectively own twenty-five or more percent of the outstanding (minus preferred and repurchased by an insurance (reinsurance) organization) shares of an insurance (reinsurance) organization or who have the opportunity to directly or indirectly vote twenty-five or more percent of the voting shares of an insurance (reinsurance) organization and:

1) jointly influencing the decisions of an insurance (reinsurance) organization by virtue of an agreement between them or otherwise;

2) being individually or mutually major participants in each other;

3) one of them is a representative of another person;

4) one of them provided the other person with the opportunity to purchase shares of an insurance (reinsurance) organization in accordance with the contract concluded between them.

17. The authorized body has the right to require information from individuals and legal entities if there is information indicating that this person corresponds to the characteristics of an insurance holding company or a major participant in an insurance (reinsurance) organization. Information can be requested from any person in possession of it, as well as from organizations controlled by that person.

18. A major participant in an insurance (reinsurance) organization or an insurance holding company must, within thirty calendar days from the date of the decision, notify the authorized body of a change in the percentage ratio of the number of shares of the insurance (reinsurance) organization owned by it to the number of shares placed (minus preferred and repurchased by the insurance (reinsurance) organization) and (or) to the number of voting shares insurance (reinsurance) organizations, which he owns directly or indirectly or has the opportunity to vote directly or indirectly with the submission of supporting documents, except in cases where such a change occurs as a result of the purchase of his own shares by an insurance (reinsurance) organization or an insurance holding company from other shareholders.

In the event of a change in the number of shares of an insurance (reinsurance) organization (in percentage or absolute value) owned by a major participant in an insurance (reinsurance) organization, an insurance holding company, to the number of shares placed (minus preferred and repurchased by the insurance (reinsurance) organization) and (or) the number of voting shares of the insurance (reinsurance) organization in the direction of As a major participant in an insurance (reinsurance) organization, an insurance holding company must submit copies of documents to the authorized body., confirming the source of funds used to purchase shares of an insurance (reinsurance) company. The sources of funds used to purchase shares in an insurance (reinsurance) organization by large participants in an insurance (reinsurance) organization, which are individuals, are defined in subparagraph 1) of paragraph 6 of this article.

In the event of a change in the percentage of the number of shares of an insurance (reinsurance) organization to less than ten or twenty-five percent owned by a major participant in an insurance (reinsurance) organization, an insurance holding company, to the number of outstanding (minus preferred and repurchased by the insurance (reinsurance) organization) shares and (or) to the number of voting shares of the insurance (reinsurance) organization) organizations at the request of a major participant in an insurance (reinsurance) organization, If the authorized body independently discovers the facts that are the basis for revoking the granted consent, the previously issued written consent of the authorized body is considered canceled from the day following the day the authorized body receives the said application or the authorized body discovers the facts that are the basis for revoking the granted consent.

A major participant in an insurance (reinsurance) organization is an individual who, in the event of an increase in the number of shares owned by him to twenty–five percent or more of the outstanding (minus preferred and repurchased by the insurance (reinsurance) organization) shares of the insurance (reinsurance) organization, in addition to the documents and within the time limits specified in this paragraph, submits a businessthe plan, the requirements for which are established by the authorized body, for the next five years.

19. Excluded by the Law of the Republic of Kazakhstan dated 07/02/2018 No. 166-VI (effective ten calendar days after the date of its first official publication).

20. An insurance (reinsurance) organization is obliged to notify the authorized body of a change in the composition of shareholders holding ten or more percent of the voting and (or) placed (minus preferred and repurchased by the insurance (reinsurance) organization) shares of the insurance (reinsurance) organization within fifteen calendar days from the date of its establishment of this fact.

21. Excluded by the Law of the Republic of Kazakhstan dated 07/02/2018 No. 168-VI (effective after ten calendar days from the date of its first official publication).

22. Consent of the authorized body for the bank to acquire the status of an insurance holding company, a major participant in an insurance (reinsurance) organization, whose shares were acquired during the bank's reorganization in the form of merger in accordance with the procedure established by the legislation of the Republic of Kazakhstan, or transferred during the operation provided for in Articles 61-2, 61-4, 61-11 and 61-12 of the Law of the Republic of Kazakhstan "On Banks and Banking activities in the Republic of Kazakhstan", is considered issued after registration of the transaction in the system of registers of holders of securities (nominal holding).

23. Resident individuals who are major participants in an insurance (reinsurance) organization, as well as their spouses, are required to submit an annual income and property declaration in accordance with the procedure and deadlines established by the tax legislation of the Republic of Kazakhstan.

The Law of the Republic of Kazakhstan dated December 18, 2000 No. 126.

President

Republic of Kazakhstan

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