According to the results of the 1st HY 2022, the returns of 14 private insurance companies in Kyrgyzstan (7 of them with the foreign capital participation) increased by 23% compared to the same period last year and amounted to 14.36 million euros, where the majority (85%) was received from insurance premiums, according to the National Statistical Committee of the Kyrgyz Republic.
3,700 insured events have been registered since the year beginning, 57% of which were voluntary private health insurance. The main amounts of insurance benefits fell on voluntary property insurance (60.5% of their total volume) and private health insurance (over 17%).
The market is regulated by the State Service for Financial Market Regulation and Supervision and is considering the possibility of creating a pool of insurance funds.
According to the official release of the department, the State Service for Financial Market Regulation and Supervision proposes to introduce several types of compulsory life, health and property insurance for citizens. In this regard, the government sent several bills to the Parliament providing for such innovations.
As per government proposal for compulsory insurance of the carrier of dangerous goods. In addition, organizations operating hazardous production facilities, as well as employers, will be required to pay insurance premiums, the latter, in particular, for causing harm to the health of an employee in the performance of their duties.
Life insurance
In Kyrgyzstani open sources, it is not customary to divide the insurance sector into: general insurance companies and life insurance companies. Insurers simply obtain licenses on selling various products. But it is possible to buy policies of voluntary endowment life insurance, voluntary personal insurance, voluntary property insurance, or voluntary liability insurance in the country.
Pension system
The pension system of the Kyrgyz Republic consists of several components. The 1997 reform transformed the old pay-as-you-go pension system (PAYG) into a three-pillar system consisting of a basic component, insurance component under pension plan, and insurance part under a notional funded system. Each part is calculated according to its own rule, after which these parts are added up and combined into one payment. The basic part of the pension is a state-guaranteed allowance financed from the national budget.
Non-contributory pension with flat-rate allowance under notional defined contribution pension system is funded with contributions by employers, employees and the self-employed. Flat-rate allowance pensions are calculated based on pension insurance record until 1996; and pensions under defined contribution pension system are calculated based on pension insurance record starting from January 1, 1996, when the individual accounting system has been introduced.
An additional mandatory funded component with a contribution of 2% of wages was introduced for all formal sector workers in 2010.
Starting from January 1, 2012, men born before January 1, 1964, and women born before January 1, 1969, who were only 15 years away from reaching full retirement age, were allowed to opt out of mandatory participation in the program.
One of the factors hindering development is the exclusion of employed individuals from the pension insurance system, as well as insufficient coverage of agricultural producers and individual (private) entrepreneurs, whose contributions are lower than in the formal sector of the economy. In addition, the lack of gender equity in the market affects the size and viability of the pension fund as a result of reduced contributions. Given that women live longer than men and labor force participation is lower than that of men, this also means that far fewer women have access to old-age pensions, which affects poverty rates.
As a result, the country has a low ratio of contributors to pensioners: the real ratio is 1.2 contributors per pensioner (the minimum recommended ratio is 3).
Photos are from open sources.
