Article 5. The procedure for the establishment of the Fund and its bodies Chapter 3. The establishment of the Fund and its activities of the Law on the Insurance Benefit Guarantee Fund

Home / RLA / Article 5. The procedure for the establishment of the Fund and its bodies Chapter 3. The establishment of the Fund and its activities of the Law on the Insurance Benefit Guarantee Fund

1. The Foundation is a non-profit organization in the form of a joint-stock company and carries out its activities on the basis of this Law and constituent documents.

The Fund is the only organization in the territory of the Republic of Kazakhstan that guarantees insurance payments for guaranteed types of insurance.

2. The shareholder of the Fund is a participating insurance organization licensed to carry out activities on guaranteed types of insurance. The National Bank of the Republic of Kazakhstan may also be a shareholder of the Fund.

The competence of the general meeting of shareholders is determined in accordance with the legislation of the Republic of Kazakhstan on joint stock companies and non-profit organizations, taking into account the specifics provided for by this Law.

3. The Fund's shares are paid for exclusively with money.

The number of shares of each shareholder of the Fund, with the exception of the National Bank of the Republic of Kazakhstan, is not less than one thousand shares and not more than ten percent of the total number of outstanding shares of the Fund.

3-1. Voting at the general meeting of shareholders of the Fund is carried out according to the principle of granting each person entitled to vote at the general meeting of shareholders one vote.

3-2. Branches of non–resident insurance organizations of the Republic of Kazakhstan engaged in insurance activities by classes (types) of insurance, which are subject to guarantee in accordance with this Law, conclude a participation agreement with the Fund without acquiring shares or a share in the authorized capital of the Fund.

4. The composition of the Fund's Board of Directors must comply with the following requirements:

1) the number of independent directors of the Fund must be at least thirty percent of the total number of members of the Board of Directors of the Fund;

2) the Board of Directors of the Fund must include at least two representatives of the authorized body.;

3) members of the Fund's Board of Directors who are not independent directors or representatives of an authorized body must be elected from among the Fund's shareholders.;

4) there should be an equal number of representatives of participating insurance organizations operating in the "life insurance" and "general insurance" industries.

4-1. The Fund maintains accounting records and prepares financial statements separately according to:

1) funds of the insurance benefit guarantee reserves, funds of the damage compensation reserve;

2) the Fund's own assets.

The procedure for maintaining internal records of the Fund's own assets, reserves for guaranteeing insurance payments in the general insurance and life insurance industries, and funds for damage compensation is established by the Fund in accordance with an internal document approved by the Board of Directors of the Fund in coordination with the authorized body.

5. The Fund opens separate bank accounts in second-tier banks of the Republic of Kazakhstan for accounting purposes.:

funds of the insurance benefit guarantee reserve for the general insurance industry;

funds of the reserve for guaranteeing insurance payments in the life insurance industry;

funds of the damage compensation reserve;

the Fund's own assets.

Accounting and storage of funds of the reserve for guaranteeing insurance payments in the general insurance industry, the reserve for guaranteeing insurance payments in the life insurance industry and the damage compensation reserve are carried out by the custodian in accordance with the custody agreement.

The Fund is prohibited from using the funds of the insurance benefit guarantee reserves and the damage compensation reserve for purposes not provided for by this Law.

The custodian monitors the use of funds from the general insurance insurance benefit guarantee reserve, the life insurance insurance benefit guarantee reserve and the damage compensation reserve in accordance with the requirements of this Law in accordance with the procedure established by a regulatory legal act of the authorized body.

6. The Fund should have a risk management and internal control system that defines:

1) the powers and functional responsibilities for risk management and internal control of the Board of Directors, the Management Board, and the Fund's structural divisions;

2) internal risk management and internal control policies and procedures;

3) limits on the permissible amounts of risks;

4) internal procedures for reporting on risk management and internal control to the Fund's bodies;

5) internal criteria for evaluating the effectiveness of the risk management system.

The requirements for the risk management and internal control system in the Fund are established by a regulatory legal act of the authorized body.

7. An internal audit service should be established in the Fund to monitor the financial and economic activities of the Fund.

The Law of the Republic of Kazakhstan dated June 3, 2003 No. 423.

This Law defines the legal status, the procedure for the establishment and operation of the Insurance Benefit Guarantee Fund, as well as the conditions for the participation of insurance organizations, branches of insurance organizations that are non-residents of the Republic of Kazakhstan in the Insurance Benefit Guarantee Fund and the principles of ensuring control over its activities.

President

Republic of Kazakhstan

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