November 25, 2021

The Law “On Insurance Activity” was adopted in a new edition

The new edition contains the concepts of cross-border insurance, reinsurance, co-insurance, explains what insurance pools are and introduces prudential standards.

According to Article 5, cross-border insurance is insurance related to the implementation by an insurance organization of activities for the conclusion and execution of insurance contracts on the territory of another state.

According to Article 2, reinsurance is full or partial insurance by the insurer (reinsurer) of the risk of payment of insurance compensation (insurance payment) accepted under the insurance contract in accordance with the reinsurance contract concluded with another insurer (reinsurer).

Co-insurance refers to the activity of insuring the same object under one insurance contract jointly by several insurers.

An insurance (reinsurance) pool is understood as an association of insurers who jointly carry out insurance activities for certain types of insurance or insurance risks on the basis of a joint activity agreement.

Now insurers and reinsurers are required to comply with prudential standards and requirements for internal control and risk management system, namely, they will have to comply with certain standards for:

  • The minimum size of the authorized capital;
  • Sufficiency of the solvency margin;
  • Insurers’ obligations on individual risks;
  • Formation and placement of insurance reserves;
  • Other regulations.

It is determined that insurance and reinsurance organizations are created in the form of a joint-stock company. In addition, it is important to note that the founders of legal entities – professional participants in the insurance market in Uzbekistan can also be non-residents.

The requirements for the director and chief accountant of the insurance and reinsurance organization, insurance broker and their separate divisions are defined. For example, the director must have a higher education and work experience in the field of insurance for at least 3 years for specialists with economic, financial, legal specialization and at least seven years for specialists with other specializations

It is important to note that an insurance contract executed in electronic form is recognized as equivalent to the corresponding paper document.