ORDER OF THE GOVERNMENT OF THE KYRGYZ REPUBLIC

of January 5, 2011 No. 3

About approval of Rules of placement by insurance companies of insurance (technical) reserves

According to the Law of the Kyrgyz Republic "About the organization of insurance in the Kyrgyz Republic", for the purpose of ensuring accomplishment by insurance companies of assumed insurance bonds the Government of the Kyrgyz Republic decides:

1. Approve the enclosed Rules of placement by insurance companies of insurance (technical) reserves.

2. To insurance companies till April 1, 2011 to bring assets, the counted coverings of insurance (technical) reserves, into compliance with requirements of the Rules approved by Item 1 of this resolution.

3. Recognize invalid:

- The resolution of Service of supervision and regulation of the financial market of the Kyrgyz Republic "About modification of the resolution of Service of supervision and regulation of the financial market of the Kyrgyz Republic "About approval of the Instruction about procedure of payments of insurance (technical) reserves of insurance companies of the Kyrgyz Republic and Rules of placement by insurance companies of insurance (technical) reserves" of 17.08.2007 No. 1" of August 28, 2009 No. 84.

4. This Resolution becomes effective not earlier than one month from the date of official publication.

Approved by the Order of the Government of the Kyrgyz Republic of January 5, 2011 No. 3

Rules of placement by insurance companies of insurance (technical) reserves

1. General provisions

1. In these rules placement of insurance (technical) reserves is understood as assets, the counted coverings (providing) of insurance (technical) reserves.

2. These rules establish requirements to the assets counted coverings (providing) of insurance (technical) reserves.

3. Assets, the counted coverings of insurance (technical) reserves, shall meet conditions of reliability, recoverability, profitability, liquidity and diversification.

2. Asset types, the insurance (technical) reserves counted coverings

4. On account of covering of insurance (technical) reserves the following asset types are taken:

1) government securities of the Kyrgyz Republic, municipal securities;

2) the securities (except the government and municipal bonds) which are in the highest and following for the highest category of listing on the stock exchanges of the Kyrgyz Republic;

 3) securities, except 2 presents of Item specified in the subitem and conforming to requirements of Item 3 of these rules;

4) the participation right in the capital of the commercial organizations (share in economic partnerships and societies, except for joint-stock companies, investment shares of the mutual investment funds having profitable activities for the last 3 years);

5) deposits (deposits) in the banks which are performing profitable activities in the market of banking services at least two years in the absence of information testimonial of inadequate goodwill of bank and having the positive conclusion of the external auditor for last two accounting periods;

6) real estate;

7) share of overcautious persons in insurance (technical) reserves;

8) share of one overcautious person in insurance (technical) reserves (except share of overcautious persons in reserve of the declared, but not settled losses);

9) depot of awards on the risks accepted in reinsurance;

10) receivables of insurers, insurance intermediaries in insurance premiums (fees), except for receivables of insurers under agreements of compulsory national insurance;

11) receivables of insurers under agreements of compulsory national insurance;

12) receivables of overcautious persons, reinsurers and insurers on transactions of reinsurance and joint insurance;

13) loans with obligatory registration of bail bond;

14) cash liquidity, money on accounts in banks;

15) gold bars and silver;

16) assets, the counted coverings of the insurance (technical) reserves which are not relating to the insurance reserves located in the territory of the Kyrgyz Republic, except for share of the overcautious persons who are not residents of the Kyrgyz Republic.

5. At least 80 percent of means of insurance (technical) reserves, minus the overcautious person's share, shall be invested in the territory of the Kyrgyz Republic if other is not stipulated by the legislation the Kyrgyz Republic and the international treaties which came in the procedure established by the law into force which participant is the Kyrgyz Republic.

6. Insurers cannot place means of the insurance (technical) reserves otherwise, than it is provided by these rules.

3. Requirements to structure of the assets counted coverings of insurance (technical) reserves

7. Compliance of activities of insurance company to the principles listed in Item 3 of these rules is determined by accomplishment of the structural ratios specified in the table of structural ratios of assets and reserves attached to these rules.

The total cost of the assets counted coverings of insurance (technical) reserves shall be at least total size of insurance (technical) reserves.

8. When calculating ratios for the table the asset cost is understood as their book value.

Appendix

to Rules of placement by insurance companies of insurance (technical) reserves

Table of structural ratios of assets and reserves

+--------------------------------------------------------------------+
¦ № ¦Активы, предоставленные в  счет¦                                ¦
¦п/п¦покрытия              страховых¦                                ¦
¦   ¦(технических) резервов         ¦                                ¦
+---+-------------------------------+--------------------------------¦
¦ 1 ¦Государственные ценные   бумаги¦Не менее   10%   от   суммарной ¦
¦   ¦Кыргызской          � еспублики,¦величины              страховых ¦
¦   ¦муниципальные ценные бумаги    ¦(технических) резервов          ¦
+---+-------------------------------+--------------------------------¦
¦ 2 ¦Ценные бумаги            (кроме¦Не более   30%   от   суммарной ¦
¦   ¦государственных и муниципальных¦величины              страховых ¦
¦   ¦облигаций),    находящиеся    в¦(технических)  резервов,  и  не ¦
¦   ¦наивысшей   и   следующей    за¦более  25%   на   долю   одного ¦
¦   ¦наивысшей категор

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