Kazakhstan is planning to liberalize the conditions for foreign insurance organizations to establish branches and enter the country’s insurance market.
The proposed measures are set out in the draft Program for the Development of the Insurance Market of the Republic of Kazakhstan until 2030, developed by the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market together with representatives of the insurance industry and the expert community.
Currently, there are no branches of foreign insurance organizations operating in Kazakhstan. Under the existing framework, a foreign insurance organization seeking to establish a branch must, among other requirements, have total assets of at least USD 5 billion.
It is important to note that the proposed changes are still at the planning stage and do not automatically mean that market access will be opened.
What Is Planned to Change
The key direction of the reform will be a shift from formal requirements toward a risk-based approach to assessing foreign insurance organizations.
When considering market access, the authorities plan to take into account the financial strength and capital adequacy of the parent company, the availability of an international credit rating, transparency of the ownership structure, the quality of corporate governance and risk management systems, as well as the effectiveness of insurance supervision in the organization’s home country.
The authorities also propose to review the minimum total asset threshold currently required for a foreign insurance organization to establish a branch in Kazakhstan.
In addition, Kazakhstan plans to abolish the existing requirement that a foreign insurance organization have at least 10 years of experience in insurance activities across all lines and classes of insurance.
For foreign insurers with an international credit rating of “A-” or higher, a simplified licensing procedure is proposed.
In particular, where the relevant information is already included in the reporting of an international insurance group or is available to the foreign regulator and can be properly verified, the applicant would not be required to submit the same information again in Kazakhstan.
At the same time, the Agency would retain the right to request additional information, impose individual conditions, or refuse to issue a license where significant regulatory risks are identified.
Practical Significance
The proposed changes could significantly reduce barriers to entry for international insurance groups seeking to enter the Kazakhstan market.
In particular, potential foreign market participants may benefit from a more flexible assessment when establishing a branch, without having to rely solely on formal requirements relating to asset size and length of business operations.
Once admitted to the market, branches of foreign insurance organizations would operate on equal terms with Kazakhstani insurers and would be required to comply with Kazakhstan’s legislation, including requirements relating to solvency, assets and liabilities, information disclosure, and consumer protection.
For international insurance groups with strong credit ratings, the proposed simplified licensing procedure could be particularly significant, as it may reduce the volume of documentation required and minimize duplication of regulatory procedures.
What Does This Mean for Business?
The implementation of the proposed measures could increase the presence of international insurance groups in Kazakhstan and strengthen competition in the insurance market.
For foreign insurers, this could create more favorable conditions for considering Kazakhstan as a market for direct presence through a local branch.
For corporate clients and businesses, a broader range of market participants could mean greater choice of insurance products, international insurance programs, and insurance service providers.
At the same time, the specific requirements for establishing and licensing branches will depend on the final wording of the relevant regulations and the procedures adopted for their implementation.
How We Can Help
REVERA Kazakhstan assists foreign insurance organizations throughout the process of preparing to enter the Kazakhstan insurance market, including:
