October 30, 2020
Compulsory insurance in Uzbekistan
Table of Content
1. Employer liability insurance
2. Carrier liability insurance
3. Mandatory civil liability insurance in the event of an accident at the ODO
4. Liability insurance for vehicle owners
5. Mandatory insurance of construction risks
6. Compulsory personal insurance
7. Compulsory insurance in the storage agreement
9. Insurance of property pledged under a mortgage agreement
10. Compulsory insurance in the provision of financial services
11. Tour operator’s liability insurance
12. Compulsory state insurance
Legislation
1. Civil Code of The Republic of Uzbekistan;
2. Labor Code of the Republic of Uzbekistan;
3. Law of the Republic of Uzbekistan dated 26.05.15 No. ZRU-386 “On Compulsory Insurance of Civil Liability of the Carrier»;
4. Law of the Republic of Uzbekistan of 16.04.09 No. ZRU-210 “On Compulsory Insurance of Civil Liability of the Employer»;
5. Law of the Republic of Uzbekistan of 21.04.08 No. ZRU-155 “On Compulsory Insurance of Civil Liability of Vehicle Owners»;
6. Law of the Republic of Uzbekistan of 28.09.06 No. ZRU-57 “On Industrial Safety of Hazardous Production Facilities»;
7. Law of the Republic of Uzbekistan dated December 9, 1992, No. 736-XII “On Pledge”;
8. Law of the Republic of Uzbekistan dated October 4, 2006, No. ЗРУ-58 “On Mortgage”;
9. Law of the Republic of Uzbekistan dated April 26, 1996, No. 221-I “On Protection of Consumer Rights”;
10. Law of the Republic of Uzbekistan dated 26.12.2008, No. ЗРУ-195 “On the rescue service and the status of the rescuer”;
11. Law of the Republic of Uzbekistan dated July 18, 2019, No. ЗРУ-549 “On Tourism”;
12. Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated 20.12.99 No. 532 “On Mandatory Insurance of Construction Risks During Construction of Objects at the Expense of State Funds and Loans under a Government Guarantee»;
13. Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated 02.10.18 No. 784 “On Approval of the Regulations on the Procedure for Conducting an Industrial Safety Examination and Issuing an Expert Opinion»;
14. Appendix to the RCM of the Republic of Uzbekistan dated 20.12.99 No. 532 “On Mandatory Insurance of Construction Risks in the Construction of Facilities at the Expense of Public Funds and Loans under Government Responsibility»;
15. Appendix №5 to the RCM the Republic of Uzbekistan dated 10.12.08 №271 “On Mandatory Insurance of Civil Liability for Causing of Harm to Life, Health and (Or) Property of Other Persons and Environment in Case of Accident at a Hazardous Industrial Facility»;
16. Appendix No. 1 to the RCM of the Republic of Uzbekistan dated 15.09.15 No. 266 “RULES of Mandatory Civil Liability Insurance of the Carrier»;
17. Appendix No. 1 to the RCM of the Republic of Uzbekistan dated 24.06.09 No. 177 ” RULES of compulsory insurance of civil liability of the employer»;
18. Appendix No. 4 to the RCM of the Republic of Uzbekistan dated 24.06.08 No. 141 “RULES of Compulsory Insurance of Civil Liability of Vehicle Owners”.
Insurance is a mechanism for protecting the property interests of individuals and legal entities in the occasion of certain events (hereinafter referred to as”Insured events“). The mechanism is based on the principle of forming monetary funds, which are formed from insurance premiums made by the insured.
According to the Civil code of the Republic of Uzbekistan, there is voluntary and compulsory insurance. This article is directly devoted to the topic of compulsory insurance. Namely, all cases in which insurance should be performed will be listed and considered below. We will also review the procedure for obtaining insurance and the main aspects of the insurance contract.
There is compulsory insurance of the risk of civil liability (hereinafter referred to as”Liability insurance“), which may occur as a result of harm to the life, health or property of other persons or violation of contracts with other persons. Namely, the following persons or in the following circumstances, the liability must be insured:
- drivers of motor vehicles;
- Carriers;
- Employers;
- in the event of an accident at a hazardous production facility (hereinafter – ” OPO»);
- when building facilities that are funded by the state.
1. Employer liability insurance
Employers are obliged to insure their civil liability for compensation for damage caused to the life or health of the employee, if such damage is related to the performance of labor duties.
Thus, the employer must insure their civil liability no later than 15 working days from the date of state registration or from the date of conclusion of an employment contract for individual employers. The insurance contract is concluded on the basis of the employer’s written application.
The document certifying the insurance is a contract and a compulsory insurance policy, as well as, in some cases, an annuity contract and an annuity contract policy.
The insurance contract is concluded for a period of 1 year, in accordance with the established form. If the period of activity of the employer is less than 1 year, the contract is concluded for the period of activity of the employer.
The insurer does not have the right to refuse insurance.
The documents that must be submitted to the insurer are:
- Application;
- Copy of the employer’s passport;
- A copy of the certificate on state registration.
After the employer pays the insurance premium, an Insurance policy is issued to the employer no later than 3 business days.
The agreement may be terminated prematurely in the following cases:
- upon liquidation of the employer (legal entity);
- In the case of death of employer (individual);
- If the agreement is declared invalid by a court decision (Appendix No. 1 to the RCM of the Republic of Uzbekistan dated 24.06.09 No. 177).
2. Carrier liability insurance
To provide services for the carriage of a legal entity, rendering services on transportation of passengers and their property on a commercial basis (hereinafter – “the Carrier”) is obliged to insure his civil liability for causing harm to life and health or property of passengers.
The basis for the conclusion of the carrier’s liability insurance contract is a written application of the carrier. The contract is for a period of one year, but if the insurance carrier on the car, the contract term from 3 months to 1 year.
The insurer may not refuse to enter into an insurance contract. To conclude the contract, the carrier must submit the following documents:
- Application;
- Copy of the carrier’s license to operate (not including cases where the carrier does not have to obtain a license in accordance with the law);
- If the contract has already been concluded, the insurance premium is calculated from the previous year.
The following terms shall be included in the insurance contract:
- Subject of the contract;
- The sum insured and the premium;
- Time constraints;
- Rights and obligations of the parties;
- Responsibility;
- Dispute resolution procedure;
- Procedure for modification, termination and early termination of the contract (law of the Republic of Uzbekistan no. ZRU-386 of 26.05.15).
The document certifying insurance is the contract and insurance policy. The insurance policy is issued no later than 3 days after the carrier pays the insurance premium (Appendix No. 1 to the PCM dated 15.09.15 No. 266).
3. Mandatory civil liability insurance in the event of an accident at the ODO
Policyholders are organizations that operate dangerous objects. In turn, hazardous production facilities include enterprises or their workshops, sites, sites, as well as other production facilities where (article 4 of the Law of the Republic of Uzbekistan dated 28.09.06 No. ZRU-57):
1) The following dangerous substances are used, produced, processed, formed, stored, transported, destroyed:
substances capable of forming an explosive and fire-hazardous environment;
harmful substances related to the degree of exposure to a living organism to hazard classes I, II and III (extremely dangerous, highly dangerous and moderately dangerous), in accordance with approved standards;
explosives that, under certain types of external influence, are capable of a very rapid self-propagating chemical transformation with the release of heat and the formation of gases;
industrial waste containing substances in concentrations dangerous to human health and the environment;
2) use equipment operating at a pressure greater than 0.07 megapascals or at a temperature higher than the boiling point of the working fluid at normal atmospheric pressure;
3) permanently installed lifting mechanisms, escalators, cable cars, funiculars are used;
4) melts of ferrous and non-ferrous metals and alloys based on these melts are obtained;
5) mining operations, mining and processing of minerals, as well as underground operations are being carried out.
An accident at the ODO is the destruction of structures and (or) technical devices used at the ODO, an uncontrolled explosion and (or) the release of dangerous substances (article 3 of the Law of the Republic of Uzbekistan of 28.09.06 No. ZRU-57).
Thus, the policyholder must insure civil liability for damages caused to the life, health and (or) property of other persons and the environment in the event of an accident at the ODO.
The insurance contract is concluded on the basis of the policyholder’s application. The application is also accompanied by the conclusion of the industrial safety expert examination, which is issued by a special accredited expert organization (Appendix No. 1 to the R CM dated 02.10.18 No. 784).
If civil liability has occurred due to the following reasons, it will not be recognized as an insured event:
- Nuclear explosion, radiation, or radioactive contamination that is not related to the operation of a particular OPO;
- Military actions;
- Mass riots, strikes;
- The effect of the force majeure;
- Occurrence of circumstances that are not related to the operation of the OPO (the list is not exhaustive) (Appendix No. 5 to the PCM of the Republic of Uzbekistan dated 10.12.08 No. 271).
4. Liability insurance for vehicle owners
If the right to own a vehicle arises, the owner must insure his liability within 10 days.
The insurance contract is concluded for 1 year. However, when purchasing a vehicle, the owner can enter into such a contract for the duration of the journey to the place of registration of the vehicle. Also, if the vehicle is used seasonally, the owner can enter into an insurance contract for the period of its use (but not less than 6 months) (item 9 of Appendix No. 4 to the PCM of the Republic of Uzbekistan dated 24.06.08 No. 141).
The document certifying the implementation of compulsory insurance is an Insurance policy, as well as a special state mark.
The liability insurance obligation does not apply to owners of:
- Vehicles with a maximum speed of no more than 20 km per hour;
- Trailers and two / three wheeled vehicles;
- Vehicles of the armed forces of the Republic of Uzbekistan, except for buses, cars and other vehicles to provide;
- Vehicles registered abroad and civil liability are already insured by the owner in the relevant country (article 6 of the Law of 21.04.08 No. ZRU-155).
5. Mandatory insurance of construction risks
Since January 1, 2000, a procedure has been introduced according to which contractors, regardless of their ownership forms, are required to insure risks when entering into contracts for the construction of facilities financed by the state and loans under a government guarantee. Financing under such contracts is made only if the contracts and insurance policy are started (item 2 of the RCM of the Republic of Uzbekistan No. 532 dated 20.12.99).
The objects of insurance are buildings and structures, equipment, machinery and other property that is located on the construction site and is the subject of construction and installation. In addition, the object of insurance is also the responsibility of the policyholder for causing harm to the life, health and property of other persons during construction and installation works.
The insurance contract is concluded on the basis of a written application form of the policyholder. The applicant must also submit the documents required for risk assessment.
Compulsory risk insurance for construction projects covers the following risks:
- fire, lightning, explosion, falling aircraft, spontaneous combustion;
- theft and malicious actions of third parties;
- flooding and flooding, burst pipes;
- storm, hurricane;
- earthquake, mudflow, avalanche, land subsidence, landslide, collapse;
- short circuit, overvoltage, electric arcs;
- the fall of machines and mechanisms, construction materials and structures;
- damage caused by the unconscious use of defective materials and structures;
- Occurrence of civil liability to third parties during construction and installation works.
6. Compulsory personal insurance
In addition to the compulsory insurance of civil liability in Uzbekistan, there are compulsory personal insurance, which applies to certain categories of employees. Namely, the legislation imposes responsibility for personal insurance of:
- Employees of coal, oil, gas and exploration systems;
- Employees of the tax authorities of the Republic of Uzbekistan;
- Forensic experts;
- Rescuers of rescue services and rescue formations;
7. Compulsory insurance in the storage agreement
As we know, movable things intended for personal consumption can be accepted from citizens for storage in a pawnshop. The agreement for the storage of things in the pawnshop is drawn up by the pawnshop issuing to the depositor (client) a registered safe receipt. A thing deposited in a pawnshop is subject to assessment by agreement of the parties in accordance with the prices for things of this kind and quality, usually set in trade at the time and place of their acceptance for storage. The pawnshop is obliged to insure in favor of the depositor at his own expense the things accepted for storage in the full amount of their assessment, made in accordance with part three 894 of article of the Civil Code of the Republic of Uzbekistan.
Collateral insurance is insurance of the property that is the object of the collateral. It is mandatory by virtue of the requirements of the civil legislation of the Republic of Uzbekistan. We also note that the Law of the Republic of Uzbekistan on Pledge reads as follows:
- The law and the contract may impose on the pledgee the obligation to insure the pledged property transferred into his possession, if this property is not insured by its owner. Insurance of the pledged property, which remains in the use of the pledger, shall be borne by the latter.
- The contract or legislation may impose on the pledgor the obligation of insurance in the event of actions committed by state bodies and their adoption of acts that terminate its economic activity, or hinder it, or adversely affect it (confiscation, audit of property), as well as liquidation or recognition as an insolvent debtor.
- When insuring the pledged property, the recipient of the insurance indemnity in the amount not exceeding the obligation secured by the pledge is the pledgee, the pledger receives the rest of the amount of the insurance indemnity. In the event of an insured event, the pledgee has the right of priority satisfaction of his claims from the amount of insurance compensation.
9. Insurance of property pledged under a mortgage agreement
Property pledged under a mortgage agreement is subject to insurance against the risks of loss and damage, unless otherwise provided by the mortgage agreement. If the mortgage agreement does not contain other conditions for insurance of the pledged property, the mortgagor is obliged to insure at his own expense the full value of this property against the risks of loss and damage, and if the total value of the property exceeds the amount of the obligation secured by the mortgage – in an amount not less than the amount of this obligation.
10. Compulsory insurance in the provision of financial services
The financial services provider is obliged to insure its liability in the event of liquidation or bankruptcy in order to meet the requirements of consumers. The financial services provider is obliged to provide the consumer with information on the existence of an insurance contract on the contractor’s liability for damage caused to the consumer.
11. Tour operator’s liability insurance
Insurance of tourists and excursionists is voluntary, except in cases where tour operators and travel agents have the right to establish a requirement for tourists and excursionists to have an insurance policy, depending on the specifics and form of the tourist product. Tour operators are required to insure their civil liability. The purpose of civil liability insurance of a tour operator is to provide the tourist with a guarantee of the return of his money for paid and not provided services, or in case of non-fulfillment or improper fulfillment by the tour operator of its obligations.
12. Compulsory state insurance
In accordance with the Labor Code, all employees of the Republic of Uzbekistan are subject to compulsory state social insurance. State social insurance contributions are paid by employers as well as by the insured employees themselves. It should be noted that non-payment of state social insurance contributions by employers does not deprive the insured employee of the right to be provided with state social insurance funds. The insured employees, and, if applicable, their families are provided with the funds of the state social insurance:
- benefits for temporary disability, and women, in addition, benefits for pregnancy and childbirth;
- benefits for the birth of a child;
- state pensions for old age, for disability and for the loss of a breadwinner;
- other payments provided by law.