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The document ceased to be valid since June 17, 2018 according to Item 2 of the Resolution of Board of National Bank of the Republic of Kazakhstan of April 27, 2018 No. 75

RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of August 27, 2013 No. 233

About approval of Rules of application of measures of early reaction and technique of determination of the factors influencing deterioration in financial position of the insurance (reinsurance) organization (insurance group)

(as amended of the Resolution of Board of National Bank of the Republic of Kazakhstan of 30.05.2016 No. 127)

According to the Law of the Republic of Kazakhstan of December 18, 2000 "About insurance activity" the Board of National Bank of the Republic of Kazakhstan" DECIDES:

1. Approve the enclosed Rules of application of measures of early reaction and technique of determination of the factors influencing deterioration in financial position of the insurance (reinsurance) organization (insurance group).

3. This resolution becomes effective after ten calendar days after day of its first official publication.

Chairman of National Bank

G. Marchenko

Approved by the Resolution of Board of National Bank of the Republic of Kazakhstan of August 27, 2013 No. 233

Rules of application of measures of early reaction and technique of determination of the factors influencing deterioration in financial position of the insurance (reinsurance) organization (insurance group)

These rules of application of measures of early reaction and technique of determination of the factors influencing deterioration in financial position of the insurance (reinsurance) organization (insurance group) (further - Rules) are developed according to the Law of the Republic of Kazakhstan of December 18, 2000 "About insurance activity" (further - the Law on insurance activity) and establish procedure for application of measures of early reaction and technique of determination of the factors influencing deterioration in financial position of the insurance (reinsurance) organization (insurance group).

The authorized body performing regulation, control and supervision of the financial market and the financial organizations (further - authorized body) applies to the insurance (reinsurance) organizations and insurance groups of measure of early reaction in case of identification of the factors influencing deterioration in their financial condition.

1. Procedure for application of measures of early reaction

1. The authorized body performs the analysis of financial position of the insurance (reinsurance) organization, insurance group for identification of the factors influencing deterioration in financial position, provided by Items 2, of 3 Rules, except for the factor provided by the subitem 4) of Item 3 of Rules:

the insurance (reinsurance) organization - monthly based on data of the regulatory reporting;

insurance group - quarterly based on data of the regulatory reporting.

2. The factors influencing deterioration in financial position of the insurance (reinsurance) organization are:

1) decrease in the standard rate of sufficiency of margin of solvency;

2) decrease in the standard rate of sufficiency of highly liquid assets;

3) increase in coefficients of unprofitability;

4) increase in share fraction in the total amount of assets;

5) excess of ratio of scope of responsibility under the agreement (agreements) of reinsurance in the separate reinsurance organization - the nonresident of the Republic of Kazakhstan to the total amount of the agreement responsibility of insurance and reinsurance;

6) unprofitable activities of the insurance (reinsurance) organization;

7) excess of ratio of total and administrative expenses to the insurance premiums accepted according to insurance contracts (reinsurance);

8) excess of ratio of expenses in the form of commission fee on insurance activity on each voluntary class of insurance in industry "general insurance" to the insurance premiums accepted according to insurance contracts (reinsurance) on the corresponding class of insurance in industry "general insurance".

3. The factors influencing deterioration in financial position of insurance group are:

1) decrease in the standard rate of sufficiency of margin of solvency;

2) decrease in equity on balance of the participant (participants) of insurance group is lower than the size of their authorized capital on balance;

3) excess of amount of transactions between members of insurance group;

4) application of measures of early reaction concerning the financial organizations, being members of insurance group.

4. In case of identification of the factors provided by Items 2, of 3 Rules in analysis result of financial position of the insurance (reinsurance) organization, insurance group and (or) following the results of check of the insurance (reinsurance) organization and (or) insurance holding or members of insurance group, the authorized body sends to the insurance (reinsurance) organization and (or) to its shareholders, insurance holding and (or) its large participant the requirement in writing for submission of the actions plan providing measures of early reaction for increase in financial stability of the insurance (reinsurance) organization, insurance group, non-admission of deterioration in their financial position and increase in the risks connected with their activities (further - the actions plan).

The insurance (reinsurance) organization and (or) its shareholders, insurance holding and (or) its large participants in time no more than five working days from the date of receipt of the requirement of authorized body develop and represent the actions plan which contains to authorized body:

the detailed analysis of the factor influencing deterioration in financial position of the insurance (reinsurance) organization, insurance group;

forecast of this factor, reasons for this forecast and negative impacts on activities of the insurance (reinsurance) organization, insurance group;

measures for improvement of this factor, that is bringing to the level which is not posing threat (additional risks) for insurance activity (reinsurance) organization, insurance group;

completion dates of the actions plan (with indication of completion dates on each Item of the actions plan);

responsible officials for execution of the actions plan (with indication of the officials responsible for execution, on each Item of the actions plan).

The authorized body carries out preliminary consideration of the actions plan within ten working days from the date of its representation by the insurance (reinsurance) organization and (or) its shareholders, insurance holding and (or) its large participants.

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