Article 53-3. Measures to improve the financial condition and/or minimize the risks of the Insurance Law

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1. In order to eliminate deficiencies, risks or violations, including those identified using reasoned judgment, the authorized body applies measures to improve the financial condition and (or) minimize the risks of an insurance (reinsurance) organization, insurance broker, insurance holding company, insurance group and (or) organizations that are part of an insurance group, a major participant an insurance (reinsurance) organization, an organization that guarantees insurance payments, an actuary licensed to carry out actuarial activities in the insurance market, by making demands on:

1) maintaining the standard of adequacy of the solvency margin and (or) the standard of adequacy of highly liquid assets above the minimum values established by the authorized body;

1-1) elimination of the factor(s) influencing the deterioration of the financial situation of the insurance (reinsurance) organization (insurance group);

2) suspension and (or) restriction of certain types of transactions, including insurance (reinsurance) contracts, or the establishment of a special procedure for their implementation;

3) cost reduction, including through termination or restriction of additional hiring of employees, closure of individual branches and representative offices, subsidiaries, limitation of monetary remuneration and other types of financial incentives for senior employees;

4) suspension and (or) restriction of investments in certain types of assets or the establishment of a special procedure for their implementation;

5) additional formation of insurance reserves;

6) recognition of an individual and (or) a legal entity as a person associated with an insurance (reinsurance) organization or insurance holding company in a special relationship;

7) changing the terms of a transaction concluded on preferential terms with a person associated with an insurance (reinsurance) organization or insurance holding company by special relations to the terms of similar transactions with third parties concluded on the date of the transaction with preferential terms;

8) restriction of transactions with persons connected with an insurance (reinsurance) organization, insurance holding company by special relations;

9) termination of accrual and (or) payment of dividends on common and (or) preferred shares;

10) review of internal policies and procedures, limits on the permissible amount of risks, procedures for evaluating the effectiveness of the risk management and internal control system;

11) removal from the performance of official duties of the persons specified in Article 34 of this Law, with simultaneous withdrawal of consent to appointment (election) to the position of a senior employee. If an insurance (reinsurance) organization, an insurance holding company, or an insurance broker suspends from performing their official duties or dismisses the persons specified in article 34 of this Law, prior to the removal of these persons from their official duties by the authorized body, the authorized body shall revoke consent to the appointment (election) of this person to the appropriate position of a senior employee of an insurance (reinsurance) company. organization, insurance holding company, insurance broker;

11-1) dismissal from the performance of official duties of a senior employee of an organization guaranteeing insurance payments, with simultaneous withdrawal of consent to appointment (election) to the position of a senior employee. In the event that the organization guaranteeing insurance payments is suspended from performing official duties or that the senior employee is dismissed before the authorized body removes him from his official duties, the authorized body shall revoke consent to the appointment (election) of this person to the position of a senior employee of the organization guaranteeing insurance payments.;

12) carrying out an assessment of the value of property owned by a major participant in an insurance (reinsurance) organization and (or) an insurance holding company;

13) elimination of the causes and (or) conditions that contributed to the violation of the requirements of the legislation of the Republic of Kazakhstan on issues within the competence of the authorized body, the rights and legitimate interests of policyholders (insured, beneficiaries) of insurance (reinsurance) organizations;

14) exclusion of the insurance agent from the register of insurance agents;

15) ensuring compliance of their activities with the legislation of the Republic of Kazakhstan.

2. The measures provided for in paragraph 1 of this article shall be applied in the form of a written order or written agreement.

3. A written instruction is an instruction to an insurance (reinsurance) organization, an insurance broker, an organization that guarantees insurance payments, an actuary licensed to carry out actuarial activities in the insurance market, organizations that are part of an insurance group, an insurance holding company, or a major participant in an insurance (reinsurance) organization to take mandatory measures established by the Legislation of the Russian Federation. paragraph 1 of this Article, and (or) the need to submit an action plan for their implementation within the prescribed period (hereinafter referred to as the action plan).

The action plan contains a description of deficiencies, risks or violations, the reasons that led to their occurrence, a list of planned activities, the timing of their implementation, as well as responsible managers.

4. A written agreement is a written agreement concluded between the authorized body and an insurance (reinsurance) organization, or an insurance holding company, or organizations that are part of an insurance group, or a major participant in an insurance (reinsurance) organization, or an insurance broker, or an organization that guarantees insurance payments, on the implementation of measures established by paragraph 1 of this article, with an indication of the time frame for the elimination of identified deficiencies, risks or violations and (or) a list of restrictions, which are assumed by these persons until the identified deficiencies, risks or violations are eliminated.

A written agreement must be signed by an insurance (reinsurance) organization or an insurance holding company, or organizations that are part of an insurance group, or a major participant in an insurance (reinsurance) organization, or an insurance broker, or an organization that guarantees insurance payments.

5. An insurance (reinsurance) organization, an insurance holding company, an organization that is part of an insurance group, a major participant in an insurance (reinsurance) organization, an insurance broker, an organization that guarantees insurance payments, an actuary licensed to carry out actuarial activities in the insurance market, must notify the authorized body of the implementation of the measures specified in writing in accordance with the instructions and written agreement, within the time limits stipulated in these documents.

6. If it is not possible to eliminate the violation within the time limits specified in the written order and /or action plan, written agreement, for reasons beyond the control of the insurance (reinsurance) organization, insurance holding company, organizations that are part of the insurance group, a major participant in the insurance (reinsurance) organization, insurance broker, organization guaranteeing the implementation of insurance payments, an actuary licensed to carry out actuarial activities in the insurance market, a deadline for the execution of a written order and (or) an action plan, the written agreement may be extended until the date set by the authorized body.

7. A non-resident insurance (reinsurance) organization of the Republic of Kazakhstan, to whose branch the requirements specified in paragraph 1 of this article have been submitted by the authorized body, is obliged to take measures to improve the financial condition of the branch of a non-resident insurance (reinsurance) organization of the Republic of Kazakhstan, including increasing the amount of assets accepted as a reserve provided for in paragraph 12 of the Article. 46 of this Law, minimizing risks by bringing its activities in line with the legislation of the Republic of Kazakhstan and the requirements of the authorized body.

If the measures taken by a non-resident insurance (reinsurance) organization of the Republic of Kazakhstan specified in part one of this paragraph are insufficient, the non-resident insurance (reinsurance) organization of the Republic of Kazakhstan shall fulfill the obligations not fulfilled and (or) improperly fulfilled by the branch of the non-resident insurance (reinsurance) organization of the Republic of Kazakhstan in accordance with a written commitment previously submitted to the authorized body. in accordance with subparagraph 12) of the first part of paragraph 2 of Article 30-1 of this Law.

The Law of the Republic of Kazakhstan dated December 18, 2000 No. 126.

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Republic of Kazakhstan

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