Article 53-4. Compulsory supervisory response measures of the Insurance Law

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IZPI's note! The first paragraph of paragraph 1 is amended by the Law of the Republic of Kazakhstan dated 30.06.2025 No. 205-VIII (effective sixty calendar days after the date of its first official publication).

1. The authorized body applies compulsory supervisory response measures to persons who have the characteristics of a major participant in an insurance (reinsurance) organization or insurance holding company, as well as major participants in an insurance (reinsurance) organization, insurance holding company, major participants in an insurance holding company and organizations that are part of an insurance group, participants (shareholders) of an insurance broker in the following cases::

IZPI's note! Subparagraph 1) is amended by the Law of the Republic of Kazakhstan dated 30.06.2025 No. 205-VIII (effective sixty calendar days after the date of its first official publication).

1) provided for in paragraph 3 of Article 16-2, paragraph 10 of Article 20, paragraph 14-1 of Article 26 and paragraph 4 of Article 46 of this Law;

2) if the application of other supervisory response measures cannot ensure the protection of the legitimate interests of policyholders (insured, beneficiaries), the financial stability of an insurance (reinsurance) organization and (or) an insurance group, and the minimization of risks associated with insurance (reinsurance) activities;

3) if actions (inaction) an insurance holding company and (or) a major participant in an insurance (reinsurance) organization, and (or) a major participant in an insurance holding company, and (or) an organization that is part of an insurance group, and (or) a person who has the characteristics of a major participant in an insurance (reinsurance) organization or insurance holding company, may lead to a further deterioration in financial regulations of the insurance (reinsurance) organization.

2. In the presence of the cases provided for in paragraph 1 of this Article, the authorized body may:

1) require a person who has the characteristics of a major participant in an insurance (reinsurance) organization, as well as a major participant in an insurance (reinsurance) organization, to reduce his share of direct or indirect ownership to below ten percent of the voting shares of the insurance (reinsurance) organization;

IZPI's note! Paragraph 2 is provided to be supplemented with subparagraph 1-1) in accordance with the Law of the Republic of Kazakhstan dated 30.06.2025 No. 205-VIII (effective sixty calendar days after the date of its first official publication).

1-1) require a participant (shareholder) of an insurance broker to alienate his share of participation in the authorized capital (shares) of the insurance broker;

2) require a person who has the characteristics of an insurance holding company, as well as an insurance holding company, to reduce the share of his direct or indirect ownership to below twenty-five percent of the voting shares of an insurance (reinsurance) organization and suspend operations (direct and indirect) between him and an insurance (reinsurance) organization that endanger the insurance (reinsurance) organization risk;

3) require an insurance (reinsurance) organization and an insurance holding company in respect of organizations in which the insurance (reinsurance) organization or insurance holding company is a shareholder (participant), as well as organizations that are part of the insurance group, to suspend operations (direct and indirect) between them, exposing the insurance (reinsurance) organization and (or) an insurance holding company or organizations that are part of an insurance group at risk;

4) require an insurance (reinsurance) organization or a person possessing the characteristics of an insurance holding company, as well as an insurance holding company, to alienate their share of ownership or control over a subsidiary or organizations in which they have significant participation;

5) require organizations that are part of the insurance group to suspend operations (direct and indirect) between them and their affiliates that expose organizations that are part of the insurance group to risk;

6) in order to increase the equity capital of an insurance (reinsurance) organization or insurance group in an amount sufficient to ensure the financial stability of the insurance (reinsurance) organization or insurance group, require the insurance holding company, a major participant in the insurance (reinsurance) organization, to take measures for additional capitalization of the insurance (reinsurance) organization or insurance group.

3. If a major participant in an insurance (reinsurance) organization, an insurance holding company, or a person with the characteristics of a major participant in an insurance (reinsurance) organization or an insurance holding company fails to comply with the requirements provided for in paragraph 2 of this article, as well as part two of paragraph 10 of Article 20 of this Law, a trust management of shares of an insurance (reinsurance) company is established on the basis of a decision of the authorized body.) organizations owned by a major participant in an insurance (reinsurance) organization, an insurance holding company, or a person, who has the characteristics of a major participant in an insurance (reinsurance) organization or insurance holding company. These shares are transferred to the trust management of the authorized body for a period of up to three months.

The authorized body has the right to make a decision on the transfer of shares of an insurance (reinsurance) organization owned by a major participant in an insurance (reinsurance) organization, an insurance holding company or a person with the characteristics of a major participant in an insurance (reinsurance) organization or an insurance holding company to the trust management of the national managing holding company.

In the case of transfer of shares of an insurance (reinsurance) organization belonging to a major participant in an insurance (reinsurance) organization, an insurance holding company, or a person with the characteristics of a major participant in an insurance (reinsurance) organization or an insurance holding company, to the trust management of the national managing holding company, the period for which the trust management of shares is established is determined in the decision of the authorized body on the establishment of the trust management.

During the period when the authorized body or the national managing holding carries out the trust management of shares of an insurance (reinsurance) organization, the owner of the shares is not entitled to take any actions with respect to shares held in trust.

A major participant in an insurance (reinsurance) organization, an insurance holding company, or a person who has the characteristics of a major participant in an insurance (reinsurance) organization or an insurance holding company has the right to petition the authorized body for the sale of all their shares in an insurance (reinsurance) organization to the persons indicated in the petition.

The petition is satisfied by the authorized body if the purchasers of the shares specified in the petition comply with the requirements of the legislative acts of the Republic of Kazakhstan.

If the grounds for transferring shares of an insurance (reinsurance) organization belonging to a major participant in an insurance (reinsurance) organization, insurance holding company, or a person with the characteristics of a major participant in an insurance (reinsurance) organization or insurance holding company are not eliminated, the authorized body or the national managing holding company shall alienate shares of an insurance (reinsurance) company held in trust, by selling them on the organized securities market at the market value prevailing at the date of the decision on the sale of shares. In the absence of information on the market value of the shares, the selling price of the shares may be determined by the appraiser in accordance with the legislation of the Republic of Kazakhstan. The proceeds from the sale of these shares are transferred to the persons whose shares were transferred to the trust management.

Measures for the sale of shares of an insurance (reinsurance) organization owned by a major participant in an insurance (reinsurance) organization, an insurance holding company, or a person who has the characteristics of a major participant in an insurance (reinsurance) organization or an insurance holding company are carried out at the expense of the insurance (reinsurance) organization.

The procedure for the trust management of shares of an insurance (reinsurance) organization owned by a major participant in an insurance (reinsurance) organization, insurance holding company, or a person with the characteristics of a major participant in an insurance (reinsurance) organization or insurance holding company, as well as the actions of an authorized body or a national managing holding company during the trust management period, is established by a regulatory legal act of the authorized body.

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Republic of Kazakhstan

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