The Kazakhstani Mazhilis of the Parliament entered into examination of the draft Law of the Republic of Kazakhstan “On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Regulation and Development of Insurance and Securities Markets”. The regulator initiates introduction of new social products, educational funded insurance product within the framework of the state educational funded system and joint retirement annuity.
“Life insurance companies, along with banks, will be involved in the SEFSs, where their clients’ savings will be subsidized by the state. In case of a parent’s disability or death, the insurance company will guarantee full coverage of education costs. The annual state premium is set similarly to bank educational deposits in the amount of 5% or 7% of savings. There are no such life insurance products subsidized by the state in the insurance market today,” the regulator’s press service said.
Joint (spousal) retirement annuity is one of retirement annuity options widespread in Kazakhstan. Such a policy combines the pension savings of family members annuity (for example, a married couple, sisters, mother and son) to buy a retirement and receive lifetime payments from a life insurance company. “For example, if one of spouses does not have enough retirement savings to buy a retirement annuity, and the other has a surplus, a joint retirement annuity will allow them both to receive lifetime benefits. Thus, this type will contribute to the provision of social protection to a greater number of citizens,” ARDFM specified.
Digitalization of life insurance
The Agency is conducting legislative initiatives on digitalization of life insurance companies. For example, it is planned at the legislative level to include the Unified Accumulative Pension Fund in the list of providers and recipients of information from the unified insurance database (UIDB). Such access will simplify the process of concluding retirement annuity agreements.
“In order to purchase retirement annuity, a client must currently provide information to the LIC on availability of pension savings in the UAPF. Then he needs to submit the concluded retirement annuity agreement to the UAPF. Thus, integration of the UAPF and UIDB information systems will automate this process. However, when concluding a retirement annuity agreement, the transfer of confidential information on pension savings is made with the depositor’s consent,” the regulator representatives explained. It is assumed that this measure will significantly reduce the time for concluding a retirement annuity agreement.
“One of the socially significant classes of the life insurance industry is compulsory insurance of an employee against accidents in the performance of labor (official) duties (CAI). Integration has been implemented between the UIDB information systems and the Ministry of Labor and Social Protection of the Republic of Kazakhstan, which allows the Ministry to receive, among other things, up-to-date information on availability of CAI agreements with employers,” ARDFM emphasizes.
Also, as part of service digitalization in the life insurance industry, the measures to provide LICs with services on individuals’ status (alive/deceased), searching and verifying data on individuals and legal entities (personal information), and the degree of loss of professional ability to work, were taken.
The Financial Supervision Authority believes that the use of UIDB services integrated with state databases allows LICs to optimize business processes and speed up the receipt of reliable and high-quality information on insurers for an adequate risk assessment and insurance payments.
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