An employer must enter into an agreement with the life insurance company in order fulfill this obligation. All relations between the parties to the agreement are regulated by the Act of the Republic of Kazakhstan “On compulsory insurance of employees against accidents in performance of their labor (official) duties” (hereinafter - the Act).
Whose interests does this type of insurance protect?
According to the Act "the object of insurance is the property interest of an employee, whose life and health is harmed as a result of an accident, which has led to establishment of a degree of loss of professional capacity to work or his death”. It means that upon an insured event occurrence, the injured employee or persons entitled to payment for damage in connection with his death will receive an insurance benefit in the manner and amount established by the Act.
When it is necessary to arrange insurance?
It is necessary to enter into agreement of compulsory insurance of employees against accidents within 10 days after registration of a legal entity and/ or obtaining of a license to perform the licensed type of activities. The employer is required to enter into insurance agreement annually. Avoidance of entering into the agreement entails the administrative responsibility to the employer in the form of a fine in amount of up to 1 000 MCI.
Absence of an insurance agreement, in addition to fines, can lead to very large financial losses, since payments upon the accident can amount to tens of millions of tenge, especially for occupational diseases and disability of workers, the employer, in this case, will be obliged to compensate for the damage in full.
When the insurance benefit payments shall be made?
The insurance company shall make an insurance benefit payment if, as a result of the accident, the employee is established to have occupational disability 30 to 100% inclusively or his death occurred.
When establishing of the degree of loss of professional capacity to work of 5 to 29% inclusively, compensation for harm shall be paid by the employer according to the current legislation of the Republic of Kazakhstan.
The degree of loss of professional capacity to work of an employee is determined by the territorial subdivisions of the Committee of Labor, Social Protection and Migration of the Ministry of Health and Social Development of the Republic of Kazakhstan, through a medical and social examination.
What affects the value of the insurance agreement?
The amount of insurance premium depends on the annual salary fund of all employees and on the type of activity of the entity. Also, the value of the agreement is affected and, thereby, determined by the magnitude of the correction factor - the statistics of accidents occurred at the entity during the five years preceding entering into insurance agreement.
If an accident occurred ...
The employer needs to notify the insurance company in writing not later than three business days when it has become aware of the accident occurrence. The laws also establish the commitment of the employer to ensure investigation of an insured event with mandatory participation of representatives of the Authorized Labor Authority and the insurer. After that, the documents provided for in Article 20 of the Act, required for insurance benefit payment, shall be submitted to the insurer. It is important to remember that further work of the insurer regarding insurance benefits payment depends on timely submission of a full list of documents to the insurance company.
The insurer shall decide on insurance benefits payment within seven business days from the moment of submission of all necessary documents stipulated by the Act.
How are benefits payments made?
1. The insurance company reimburses the harm to the injured employee (in case of his death - to persons entitled to compensation for damage) on the basis of the annuity agreement in the form of periodic payments.
Payments shall be made within the period equal to the time of establishment or renewal (reassessment) of the degree of loss of the professional capacity of the employee. The maximum period of payment is until the employee reaches the retirement age.
At the same time, if the employee has a degree of loss of professional capacity to work of less than one year, the first insurance benefit payment shall be made within seven business days from the date of submission of all the documents provided by the Act.
Upon establishing or extending of the degree of loss of professional capacity to work or death of an employee, the employer is committed to enter into an annuity agreement in favor of the injured employee or persons entitled to compensation for damage in connection with the death of the employee. The annuity agreement shall be entered into with the insurer, who entered into the agreement of compulsory insurance of employees against accidents, during the term of which the insurance event occurred. The annuity agreement shall establish the amount and period of annuity benefit payments.
2. Compensation of additional expenses caused by damage to health of the employee in the event of primary establishment of a degree of loss of professional capacity of 30 to 100% on the basis of documents proving such expenses (treatment, supplementary nutrition, purchasing of medicines, prosthetics, extrinsic care, sanatorium treatment, purchasing of special vehicles, training for another profession and others). Compensation by the insurer is not subject to expenses that are included in the guaranteed amount of free medical assistance according to the legislation of the Republic of Kazakhstan in the field of health.
The aggregate amount of insurance benefit payments for compensation of additional expenses caused by damage to health cannot exceed the following amounts:
• upon establishing the degree of loss of professional capacity to work of 30% to 59% inclusively - 500 MCI;
• upon establishing the degree of loss of professional capacity to work of 60% to 89% inclusively - 750 MCI;
• upon establishing the degree of loss of professional capacity to work of 90% to 100% inclusively - 1 000 MCI.
A scope of persons entitled to compensation for harm due to the death of an employee:
• disabled persons who were dependent on the employee, who died, or who have been entitled to getting of funds for care from him as of the day of his death;
• the child of the deceased person, born after his death;
• one of the parents, spouse or other member of the family, regardless of capacity to work, who is not working and is involved in care of the deceased's children, grandchildren, brothers and sisters, who have not reached the age of 14 or who have reached the specified age but who are in need of external care for health reasons upon opinion of medical authorities;
• persons, who were dependent on the deceased person and who became disabled within 5 years after his death.
Harm is compensated: to minors - until they reach the age of 18; students at the age of 18 and older – up to graduation from full-time educational institutions, but not more than up to 23 years; women older than 58 and men older than 63 for lifetime; to disabled persons - for the period of disability; to one of the parents, to the spouse or another member of the family involved in care of children, grandchildren, brothers and sisters, who have been dependent on the deceased person - until they reach the age of 14 or changing of their state of health.
3. If the injured worker has died - to the person, who performed burial, the insurer shall reimburse the burial expenses in the amount of 100 MCI.
How to choose a reliable insurer?
Currently, there are 6 of 7 life insurance companies in Kazakhstan, who have a license for insurance activities on this type of insurance. In view of the fact that it is compulsory, tariffs and terms of insurance and payments are regulated by the laws, respectively, the proposals of all insurance companies on the cost and terms of the agreement are equivalent.
How to choose a reliable insurance company, which, upon an insured event occurrence will make payments within the shortest period of time and in full? The criteria, by which the reliability of the insurer can be assessed, can be found on the website of the regulator - the National Bank of the Republic of Kazakhstan. It is necessary to pay attention to the value of assets, solvency margin ratio, the amount of the formed insurance reserves, and the volume of insurance benefits.
It should also be noted that a reliable and conscientious insurance company, which is aimed at long-term relationships with customers, will not deliberately underestimate insurance rates when entering into the agreement. In the process of adequate tariffs establishing, such company will be prepared to pay appropriate insurance benefit, and will not seek reasons to avoid insurance benefit payment making.