Uzbekistan Updates Insurance Legislation: New Motor TPL Rules, Paperless Policies, and Prudential Controls

The President of the Republic of Uzbekistan signed Law No. ZRU-1154 of June 22, 2026 'On Amendments and Additions to Certain Legislative Acts of the Republic of Uzbekistan', introducing wide-ranging modernization across the insurance sector, strengthening consumer protection, and tightening prudential supervision by the National Agency for Prospective Projects (NAPP). This analysis evaluates the legislative revisions through the lens of actuarial risk theory, reserving dynamics, and statutory capital adequacy.

Key Legislative Amendments

The enacted statute introduces substantial reforms to the laws 'On Insurance Activities', 'On Compulsory Motor Third-Party Liability Insurance' (MTPL), and 'On Compulsory Employer Liability Insurance':

1. MTPL Open-Driver Restructuring: For compulsory auto liability policies issued for an unlimited number of authorized drivers, the statutory requirement to list the vehicle owner and close relatives has been eliminated—their third-party civil liability is now insured by statutory default.
2. Claim Lodging Choice in Traffic Accidents: Accident victims have been granted the statutory right to seek compensation either through their own insurer via direct compensation mechanisms or directly against the at-fault driver's insurance company.
3. Legislative Elimination of Paper Policies: Physical paper insurance certificates have been fully phased out; the law mandates electronic policies (E-policies) registered in the national centralized insurance registry as the sole legal format.
4. Prudential Restrictions on Capital and Dividends: Insurers face an explicit statutory prohibition on distributing profits and paying dividends whenever regulatory prudential ratios or statutory solvency margins are breached, or if insolvency indicators emerge.
5. Employer Liability Adjustments: Mandatory employer civil liability insurance is now restricted regarding employee categories whose life and health are already covered by state-budget compulsory insurance.
6. Consumer Protection and Intermediary Oversight: A notification-based regulatory regime was introduced for e-commerce operators, insurance agents, surveyors, loss adjusters, assistance companies, and actuarial organizations, alongside mandatory pre-contractual disclosures of deductible terms and coverage limits.

Actuarial Analysis: Reserving, Pricing, and Solvency

From an actuarial and risk management perspective, these legislative adjustments trigger immediate operational and modeling impacts:

• Pricing Open-Driver Motor Policies: Removing designated named drivers under open policies shifts underwriting from individual risk-scoring (driver age, experience, bonus-malus) to generalized actuarial portfolio distribution models (Generalized Linear Models, GLM). Heightened uncertainty regarding vehicle usage intensity necessitates an explicit volatility loading in pure net premiums.
• Claim Channeling Impact on Run-Off Triangles: Allowing claimants to choose between direct compensation and claims filed against the tortfeasor's insurer alters settlement velocity. This shifts development patterns across run-off loss triangles, requiring actuaries to adjust Chain-Ladder and Bornhuetter-Ferguson methods when evaluating Incurred But Not Reported (IBNR) and Reported But Not Settled (RBNS) reserves.
• Prudential Capital Lock: The prohibition of dividend distributions during solvency margin strains acts as a statutory capital preservation lock. This elevates the significance of actuarial dynamic solvency testing and capital stress tests during corporate capital planning.
• Expense Ratios and UPR Precision: Mandating 100% paperless e-policies lowers insurer acquisition costs, eliminates physical document fraud, and improves the real-time recognition and calculation of Unearned Premium Reserves (UPR).

Actuarial Takeaway: Law No. ZRU-1154 focuses supervisory rigor on genuine solvency and portfolio digitalization. In an environment of open-driver motor underwriting and flexible claim routing, insurer resilience in Uzbekistan will increasingly hinge on rigorous IBNR reserving methodologies and disciplined capital governance prior to profit distributions.

Source: Spot.uz, 2026-06-26. Law of the Republic of Uzbekistan No. ZRU-1154 (Lex.uz).