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THE RESOLUTION OF BOARD OF THE AGENCY OF THE REPUBLIC OF KAZAKHSTAN ON REGULATION AND SUPERVISION OF THE FINANCIAL MARKET AND THE FINANCIAL ORGANIZATIONS

of March 25, 2006 No. 85

About approval of the Instruction on requirements to evaluation methods and calculation principles of insurance rates on classes (types) of insurance of the insurance (reinsurance) organizations, branches of the insurance (reinsurance) nonresident organizations of the Republic of Kazakhstan

(as amended on 12-02-2021)

For the purpose of protection of consumer interests of insurance services, receipt of qualitative analysis of the sizes of insurance rates established by insurance company, and also determination of requirements to the used statistics and procedure of payments of insurance rates, the Board of the Agency of the Republic of Kazakhstan on regulation and supervision of the financial market and the financial organizations (further - the Agency) DECIDES:

1. Approve the enclosed Instruction on requirements to evaluation methods and calculation principles of insurance rates on classes (types) of insurance of the insurance (reinsurance) organizations, branches of the insurance (reinsurance) nonresident organizations of the Republic of Kazakhstan.

2. This resolution becomes effective after fourteen days from the date of state registration in the Ministry of Justice of the Republic of Kazakhstan.

3. To department of supervision of subjects of the insurance market and other financial organizations (Karimullin A. A.):

1) together with Legal department (Baysynov M. B.) to take measures to state registration in the Ministry of Justice of the Republic of Kazakhstan of this resolution;

2) in ten-day time from the date of adoption of this resolution to bring this resolution to the attention of the interested divisions of the Agency, the insurance (reinsurance) organizations, actuaries, Consolidation of legal entities "Association of financiers of Kazakhstan", Public association "Society of Actuaries of Kazakhstan".

4. To department of the international relations and public relations (Pernebayev T. Sh.) take measures to the publication of this resolution in mass media of the Republic of Kazakhstan.

5. To impose control of execution of this resolution on the vice-chairman of the Agency Uzbekov G. N.

Chairman

A. Dunayev

Approved by the Resolution of Board of the Agency of the Republic of Kazakhstan on regulation and supervision of the financial market and the financial organizations of March 25, 2006 No. 85

Instruction on requirements to evaluation methods and calculation principles of insurance rates on classes (types) of insurance of the insurance (reinsurance) organizations, branches of the insurance (reinsurance) nonresident organizations of the Republic of Kazakhstan

This Instruction on requirements to evaluation methods and calculation principles of insurance rates on classes (types) of insurance of the insurance (reinsurance) organizations, branches of the insurance (reinsurance) nonresident organizations of the Republic of Kazakhstan is developed according to the Law of the Republic of Kazakhstan of December 18, 2000 "About insurance activity", the Civil code of the Republic of Kazakhstan (Special part) of July 1, 1999 and determines requirements to evaluation methods and calculation principles of insurance rates by classes (types) of insurance of the insurance (reinsurance) organizations, branches of the insurance (reinsurance) nonresident organizations of the Republic of Kazakhstan.

Chapter 1. The basic concepts used in this Instruction

1. For the purposes of this Instruction the following basic concepts are used:

1) gross premium - insurance rate on which the insurer pays insurance premium and which consists of net premium and loading;

2) insurance coverage unit - the unit of measure used for calculation of insurance premium;

3) classification of risks (insurers) - the list of the criteria characterizing the insurer or risk degree with the corresponding coefficient of differentiation;

4) differentiation coefficients - the coefficients applied to the calculated insurance rate to accounting of risk factors of object of insurance;

5) loading - the part of gross premium intended for covering of administrative expenses of the insurer, branch of the insurance nonresident organization of the Republic of Kazakhstan on carrying out insurance transactions, contingencies and profit;

6) net premium - the part of gross premium intended for forming of resources of insurance company, branch of the insurance nonresident organization of the Republic of Kazakhstan on implementation of insurance payments;

7) the risk allowance - part of net premium which reflects risk of accidental variation from the expected values;

8) insurance rate - insurance coverage unit cost;

9) authorized state body - the state body performing regulation, control and supervision of the financial market and the financial organizations.

Chapter 2. General requirements to calculation of the insurance tariff charges

2. Calculation of insurance rates is based on the principles of completeness, the sequence and adequacy.

3. Calculation of insurance rates shall not contain mistakes, inaccuracies and amendments.

4. In case of the description of calculation respect for completeness of statement of formulas and calculations, and also specifying of all numerical parameter values necessary for carrying out the corresponding calculations is necessary.

5. When calculating insurance rates also following information is provided:

1) detailed data on source of the used original statistical data;

2) data on period of time for which the used original statistical data are obtained.

6. Calculation of insurance rates according to requirements of this Instruction is made on all classes, and also the types of insurance entering certain class of insurance and reviewed by the insurance (reinsurance) organization, branch of the insurance (reinsurance) nonresident organization of the Republic of Kazakhstan at least once in three years.

7. When calculating insurance rates statistical data which characterize the insurance risks accepted on insurance are used.

8. For the purpose of calculation of insurance rates for class (type) of insurance use of the original statistical data for the last three and more complete financial years preceding settlement date is necessary.

9. When carrying out calculation of insurance rates observance of one of the following principles and conditions for application of original statistical data is necessary:

1) calculation of insurance rates is made on the basis of original statistical data on one or several main insurance risks having the greatest influence on the size of insurance rate on class (type) of insurance;

2) calculation of insurance rates is made on the basis of original statistical data in total on all risks covered by insurance.

10. Values of the macroeconomic indicators used in calculation of insurance rates (inflation indicator, value of the minimum settlement indicator) shall correspond to official data on these indicators for settlement date.

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