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Dinara Akhmetova: “Compulsory insurance of employees protects the property interests of both employees and employers”

Dinara Akhmetova, the Head of the Department for Settlement of Losses in JSC Nomad Life told about details of insurance payments under the Law “On compulsory insurance of an employee against accidents during the performance of employment duties” (hereinafter - the Law) in an interview to As practice shows, many injured employees do not know their rights and obligations when an insured event occurs.
Dinara Akhmetova: “Compulsory insurance of employees protects the property interests of both employees and employers”

- Dinara, what does the contract of compulsory insurance against accidents in the performance of employment duties (hereinafter - the CAI contract) give to an employee and employer?

- The conclusion of a compulsory insurance contract ensures the property interests of an employee who has suffered harm to his or her health and life while performing work duties.

With the contract of compulsory insurance the employer shifts the obligation to compensate for harm to the insurance company by making the insurance payments by the latter, as insurance payments for accidents which result in loss of employee’s disablement or decease, are long-term. There are cases when the employer is liquidated, and the insurance organization continues to make payments within the limits of the insurance amount under the compulsory insurance contract if the employee is extended the degree of loss of the capacity for work, and in the event of his decease to people eligible for compensation. Thus, if the employer does not insure his employees, the liability for damages lies with him.

The law requires the employer to insure their employees annually. If the employer refuses to enter into a CAI contract, then an administrative liability in the form of fine in the amount of 10 MCI for individuals, 160 – for officials, private notaries, private bailiffs, small businesses or non-profit organizations, 400- for medium-sized businesses, 1,000 – for large businesses is provided.

- In what cases the insurance payments under the compulsory accident insurance contract are made? Could you give examples?

- The insurance organization makes insurance payments, if an accident, according to the results of the investigation, is associated with labor activity (as a result of an injury, acquired occupational disease, or decease). In this case, the employee is established the extent of occupational capacity loss from 30% to 100%.

The degree of occupational capacity loss is a level of decrease in the ability of an employee to perform employment duties, which is determined by medical and social assessment. It is conducted by the regional divisions of the Committee for Labor, Social Protection and Migration of the Ministry of Labor and Social Security of the Population of the Republic of Kazakhstan.

When an employee is injured, he is on sick leave first, but if the injury leads to permanent disruption of the body's functions, the medical consultative board (MCB) issues a certification for medical survey to the injured person. Some people think that the sick leave is the basis for payment, but it is not. The basis for payments is assessment of loss of professional working capacity.

If the employee is established the extent of occupational capacity loss from 5% to 29%, the obligation to compensate for the harm is placed on the employer, and that is a motivation for the employer to comply with safe working conditions for employees. When studying materials on accidents, we often observe that both employer and employee do not comply with the necessary labor safety conditions in the workplace.

- From what date does the company start making insurance payments, and during what period are they made?

- In case of insurance event - loss of professional working ability, the insurer makes two insurance payments:

- First – as wage loss indemnity (periodic payment), which is made during the period for assessment of loss of capacity to work, but not more than the period for an employee to reach the age limit, in this case, the employer is obliged to conclude an annuity insurance contract with the insurer,

- Second as coverage of extra expenses caused by damage to health, that is, everything related to treatment and the need for other assistance (purchase of medicines, prosthetics, external care, sanatorium-resort treatment, etc.) within the total amount of insurance payments for extra expense coverage. Depending on the established percentage of loss of professional working capacity, the law provides for payment limits: 500 MCI (30% -59%), 750 MCI (60% -89%), 1000 MCI (90% -100%).

In case of employee decease while on duty, the insurer also makes two insurance payments:

- First - on compensation for harm associated with an employee’s decease in accident in the form of periodic payments in favor of dependents that have the right to compensation for harm, in accordance with the local laws. They are as follows: minor children who are paid until the age of 18, if a child is studying full-time - until graduation, but no more than reaching age of 23 years, parents of retirement age are paid for life, disabled people - for the duration of disability regardless of the ability to work, one of the parents, spouse or another family member who is not working and is engaged in caring for the dependent children of the deceased, his grandchildren, brothers and sisters under age of fourteen (or younger), payments are made until the age of fourteen, or with changes in health status.

Second payment is made by the insurer in consideration of burial costs in the amount of 100 MCI. Most often, the employer takes on the expenses of burial, while requesting a refund in favor of the relatives of the deceased employee.

- According to statistics, what cases under the CAI contract occur most often?

- In most cases, it is occupational injuries but there are regions where occupational diseases prevail, for example, chronic obstructive bronchitis, respiratory failure, chronic lumbosacral radiculopathy, vibratory disease, and neurosensory hearing loss.

- What was the company’s maximum payment under CAI agreement?

- There was a group case in which 10 people were injured as a result of the fire, 7 of them died. In this case, the total loss amounted to about 180 million tenge, as around 3-4 children remained dependent on each family. Payments will be made until the children are 18 years old.

- In what cases do you refuse the claim?

- If the accident occurred is not related to work activity. The responsibility for organizing the investigation of accidents at work is borne by the employer. Thus, if the investigation board comes to the conclusion that the accident is not counted as related to work activity, the insurance organization has no grounds for recognizing the accident as an insurance event. According to our statistics, most often such cases occur during the working day due to a sudden health deterioration of an employee, not related to the impact of production/harmful factors, a large percentage is cardiovascular insufficiency.

If an industrial injury/occupational health problem does not lead to the loss of occupational capacity, the employee obtains a release to return-to-work form.

- How fast is the payment made? What does it depend on? What documents do you need?

- The law establishes a complete list of documents, according to which we are not able to make a decision until we are provided with a full package of documents. Therefore, everything depends on how quickly the employer or the employee collect the necessary package of documents and provide it to the insurer. The law provides that the extra expense coverage to the employee is carried out within 7 working days from the moment of receipt of documents confirming the actually incurred expenses for treatment. The payments are made after conclusion of annuity insurance contract between the insurer and employer (within 5 working days from receipt of the necessary documents) in favor of the injured employee or in case of his death in favor of the person entitled to reimbursement.

- You work directly with enterprises. Are there any other peculiarities?

- Yes. Sometimes we see employers treat their employees with negligence, pulling time with the delivery of documents to the insurer. That is why I would like to inform the injured employees that they can independently contact the insurance company if they have all the necessary documents.

So far the insurance field is something incomprehensible for many people; the knowledge of relevant laws is missing. We see this when employees call us, they are usually confused and do not know what to do. Therefore, I think it is important for every citizen of our country to know the laws, study them before applying to the insurance company, in particular, the Law of the Republic of Kazakhstan "On compulsory insurance of employee against accidents while performing his employment duties", the Civil Code of the Republic of Kazakhstan, clause “Obligation accrued as a consequence of infliction of harm and, of course, the Labor Code of the Republic of Kazakhstan.

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