Law of the Republic of Kazakhstan "On the Insurance Payments Guarantee Fund"#

Unofficial English translation prepared for informational and research purposes.
Official source: Әділет / https://adilet.zan.kz/rus/docs/Z030000423_
Validity of edition checked: 2026-10-06.
In case of any discrepancies, the official texts in Kazakh and Russian prevail.

Metadata#

Footnote. Preamble excluded by Law of the RK No. 205-VIII of 30.06.2025.

Chapter 1. General Provisions#

Article 1. Basic Concepts Used in This Law#

In this Law, the following basic concepts are used:

1. agent bank – a bank or organization engaged in certain types of banking operations that provides services for making guarantee payments to creditors on the basis of an agency agreement with the Insurance Payments Guarantee Fund;

2) injured party (victim) – a person whose life or health was harmed as a result of the operation of a vehicle by another person;

3) harm compensation reserve – a dedicated reserve formed through initial one-off contributions, supplementary contributions, and penalties for failure or delayed payment of contributions by participating insurers, as well as investment income earned on the reserve funds less investment expenses and negative returns, used exclusively for compensating harm to life and health of victims and funeral expenses in cases provided by this Law;

3-1) investment committee – a collegiate body of the Insurance Payments Guarantee Fund that makes investment decisions regarding the Fund's own assets, guarantee reserves, and harm compensation reserve;

4) consultative committee – a collegiate advisory body representing the interests of participating insurance organizations and branches of non-resident insurance organizations;

5) creditor – an insured, beneficiary, or third party entitled to receive a guarantee payment in accordance with this Law, or a person who compensated harm within the liability limits and acquired subrogation rights;

6) supplementary contribution – funds paid by a participating insurer or non-resident insurer branch to the Fund to form the harm compensation reserve under compulsory motor third-party liability insurance;

6-1) branch of a non-resident insurer subject to compulsory termination – a branch of an insurance organization of a non-resident of the RK in respect of which the authorized body decided to revoke the license to conduct insurance activity;

7) compulsorily liquidated insurer – a participating insurance organization in respect of which a court decision on compulsory liquidation has entered into legal force;

8) provisional administration – a body appointed by the authorized body to manage the insurance organization during the suspension or revocation of its license until the appointment of a liquidation commission;

9) guarantee payment – funds paid by the Fund to creditors in the event of compulsory liquidation of a participating insurer, or to victims in cases of unidentified hit-and-run drivers or uninsured motorists;

10) guarantee reserves – reserves formed by the Fund from mandatory and extraordinary contributions of participating insurers to secure guarantee payments under guaranteed classes of insurance;

11) participating insurer – an insurance organization or branch of a non-resident insurer licensed to carry out guaranteed classes of insurance that has entered into a participation agreement with the Fund;

12) mandatory contribution – periodic payments made by participating insurers to the Fund to accumulate guarantee reserves;

13) extraordinary contribution – additional contributions levied on participating insurers when the guarantee reserve falls below the prudential minimum threshold;

14) authorized body – the state body carrying out regulation, control, and supervision of the financial market and financial organizations (ARDFM).

Article 2. Legislation on the Insurance Payments Guarantee Fund#

1. The legislation of the Republic of Kazakhstan on the Insurance Payments Guarantee Fund is based on the Constitution of the Republic of Kazakhstan and consists of the Civil Code, the Law "On Insurance Activity", this Law, and other regulatory legal acts of the Republic of Kazakhstan.

2. If an international treaty ratified by the Republic of Kazakhstan establishes rules other than those contained in this Law, the rules of the international treaty shall apply.

Chapter 2. State Regulation, Control, and Supervision of the Fund#

Article 2-1. Objectives and Principles of State Regulation of the Fund#

The main objective of state regulation of the Fund is to protect the rights and legitimate interests of consumers of insurance services, maintain public confidence in the insurance sector, and ensure the financial stability and continuity of payments under guaranteed classes of insurance.

Article 3. Supervision of the Fund's Activities#

1. The authorized body carries out state regulation, control, and supervision of the Fund in accordance with the legislation of the Republic of Kazakhstan.
2. The Fund submits accounting, financial, and actuarial reports to the authorized body in the manner and within the timeframes established by regulatory legal acts.

Article 3-1. Supervisory Response Measures and Sanctions#

The authorized body has the right to apply supervisory response measures and sanctions to the Fund and its executives in cases of violations of the legislation of the Republic of Kazakhstan, non-compliance with prudential norms, or failure to fulfill written directives.

Article 4. Competence of the Authorized Body and National Bank#

1. The authorized body approves regulatory legal acts governing:

1. the methodology for calculating mandatory and extraordinary contributions of participating insurers;
2. the rules for forming and utilizing guarantee reserves and harm compensation reserves;
3. requirements for the investment policy and risk management system of the Fund;
4. the procedure and conditions for making guarantee payments;
5. requirements for executive employees of the Fund.

2. The National Bank of the Republic of Kazakhstan carries out foreign exchange regulation and statistical supervision in accordance with its competence.

Article 4-1. Executive Employees of the Fund#

The Chairman and members of the Management Board, members of the Board of Directors, Chief Accountant, and members of the Investment Committee of the Fund must meet qualification, experience, and business reputation requirements established by the authorized body.

Chapter 3. Establishment and Governance of the Fund#

Article 5. Legal Status and Corporate Governance#

1. The Fund is a non-profit joint-stock company operating in accordance with this Law and the Law "On Joint-Stock Companies" with peculiarities established by this Law.
2. The bodies of the Fund are:

1. the General Meeting of Shareholders (highest body);
2. the Board of Directors (management body);
3. the Management Board (executive body);
4. the Internal Audit Service (control body).

Article 6. Competence of the Board of Directors#

The Board of Directors determines the strategic directions of the Fund's activities, approves the investment policy, sets the budget, elects members of the Management Board, and monitors the financial stability of guarantee systems.

Article 6-1. The Consultative Committee#

The Consultative Committee is established under the Board of Directors to represent the interests of participating insurers and provide recommendations on contribution rates, reserve sizing, and operational improvements.

Article 7. State Guarantees and Separation of Funds#

1. The state does not bear responsibility for the obligations of the Fund, and the Fund does not bear responsibility for the obligations of the state.
2. The guarantee reserves and the harm compensation reserve are legally segregated from the Fund's own assets and equity. These reserve funds cannot be levied upon for the Fund's operational debts or obligations of individual insurers.

Article 8. Objectives and Functions of the Fund#

1. The primary purpose of the Fund is to ensure the protection of the property interests of policyholders, insureds, and victims in cases of compulsory liquidation of participating insurers.
2. The Fund performs the following functions:

1. accumulates mandatory and extraordinary contributions from participants;
2. forms and invests guarantee reserves and the harm compensation reserve;
3. verifies claims and calculates guarantee payment entitlements;
4. makes guarantee payments through agent banks or directly;
5. exercises subrogation rights against liquidated estates.

Chapter 4. Participation in the Guarantee System and Reserves#

Article 9. Mandatory Participation of Insurers#

1. All insurance organizations licensed to operate in guaranteed classes of insurance are required to be participants in the guarantee system and conclude a participation agreement with the Fund.
2. Conducting activities in guaranteed classes without participation in the Fund is prohibited and constitutes grounds for license revocation.

Article 10. Guaranteed Classes of Insurance#

The guarantee system applies to:

1. compulsory insurance of civil liability of vehicle owners (MTPL / ОГПО ВТС);
2. compulsory insurance of civil liability of carrier to passengers;
3. compulsory worker's compensation insurance against occupational accidents;
4. annuity and life insurance contracts concluded under the state educational savings system;
5. other classes stipulated by legislative acts of the Republic of Kazakhstan.

Articles 11–18. Contribution Rates, Reserve Calculation, and Investment#

1. The size of mandatory contributions is determined actuarially based on the volume of insurance premiums, underwriting risk factors, solvency margins, and target reserve coverage ratios.
2. Contributions must be transferred by participating insurers to the Fund on a monthly basis.
3. If guarantee reserves fall below the statutory minimum coverage ratio, the Fund is entitled to levy extraordinary contributions within limits defined by the authorized body.
4. Investment of guarantee reserves is carried out in high-quality, liquid assets under conservative risk limits approved by the Investment Committee and the authorized body.

Chapter 5. Procedure for Making Guarantee Payments#

Articles 19–20. Payout Triggers and Procedure#

1. The Fund commences guarantee payments upon receipt of official notice of a court ruling on compulsory liquidation entering into legal force.
2. In cases involving compulsory vehicle owner liability:

1. if the vehicle responsible for causing harm to life or health cannot be identified (hit-and-run);
2. if the at-fault driver has no valid compulsory insurance; payments for harm to life and health and burial costs are made directly from the harm compensation reserve.

3. Maximum payout limits per individual victim match the statutory sums insured established in the relevant compulsory insurance laws.

Chapter 6. Rights of Subrogation and Interaction with Liquidators#

Articles 21–21-2. Subrogation and Recourse#

1. Upon making a guarantee payment, the Fund succeeds to all rights of claim of the creditor against the liquidated insurer or the tortfeasor to the extent of the paid amount.
2. The liquidation commission of the insurer is required to satisfy the subrogated claims of the Fund in the priority order established by law.

Chapter 7. Final and Transitional Provisions#

Article 22. Liquidation or Reorganization of the Fund#

The Fund may be liquidated or reorganized only by legislative act of the Republic of Kazakhstan in the event that mandatory guarantee requirements are revoked. Upon liquidation, remaining guarantee reserves are distributed among participating insurers in proportion to their historical contributions.

Article 23. Liability for Violation of Legislation#

Persons guilty of violating the legislation on the Insurance Payments Guarantee Fund bear responsibility in accordance with the laws of the Republic of Kazakhstan.