Parliament is expected to pass amendments by the end of 2021 that will allow life insurance companies to participate in the State Educational Savings System (SESS). So far SESS is working through second-tier banks only. In addition to the remuneration, a state premium is accrued to the Aqyl educational deposit in the amount of 5% or 7% of the accumulated amount. The state premium (5% or 7%) and bank remuneration are capitalized, that is, they are added to the main deposit. “The main advantages of endowment contracts over bank deposits are insurance coverage and insurance payment guarantee. For example, a parent opens a bank deposit to accumulate funds for his child’s education in the future. However, in the event of the parent’s death or disability of I, II groups, the money accumulated on the deposit may not be enough for the child’s education. If the parent concludes an insurance agreement, the child will in any case be paid the full amount of education specified in the insurance agreement,” says Kuralai Rakhymbayeva, head of the actuarial calculations department of the insurance market and actuarial calculations department of the Agency of the Republic of Kazakhstan for the Regulation and Development of the Financial Market.
The participation of life insurance companies in the State Educational Accumulation System will create a new financial instrument that will become an alternative to a bank deposit.
“When the insured person loses the ability to work or dies during the period of accumulation, the insurance part is activated and the heir receives the insurance payment in full, taking into account the state premium, calculated annually in the amount of 5 or 7%. However, nothing happens to the insured, as the funded component is realized, and the client takes his savings with the return on investment and the received premium from the state,” concluded Kuralai Rakhymbayeva.
A few figures: for the period from 2015 to 2020, the statistics on Aqyl's deposits have shown a significant increase in state premiums. Thus, in 2015 it is 4 million tenge, in 2016 - 325.5 million tenge, in 2017 - 566.9 million tenge, in 2018 – 757.4 million tenge, in 2019 - 918.6 million tenge and in 2020 - 1 billion 68 million tenge. Total for five years is 3.6 billion tenge.
Photos are from open sources
