UZBEKISTAN: the government considers reforms of the insurance market

The Ministry of Finance of Uzbekistan brought up for discussion the Resolution of the President "On measures for reformation and accelerated development of the insurance market of Uzbekistan", - as informed by UzReport agency.

The Resolution provides prohibition against administrative interference in an insurer's (reinsure's) activity, diversion and use of insurance reserve targeted funds to inappropriate expenses, charity and other purposes, enforcement of an insurer (reinsurer) for conclusion of contracts and acceptance of unreasonable risks, inevitability and possibility of which is obvious; violation of principles of healthy market competition, abusive and significant deviation of tariffs from mid-market ones, use of damping schemes at distribution of insurance services. Besides that, the document assumes within 2018-2021 period to increase minimal charter capital amount of insurers, differentiated depending on types and areas of their insurance activity.

The resolution may be adopted on January 1, 2019; in that case insurers (reinsurers) may be exempted from a profit tax for the period of 3 years with target allocation of funds for charter capital increase and its adaptation to the requirements. Therewith an insurer (reinsurer) can't be owned by non-resident legal entities, registered in offshore areas and by individuals, living in offshore areas as well as insurers, performing activity in the same segment with the insurer (reinsurer) which is being owned.

Besides, according to UzReport, there is a proposal to establish a big reinsurer in the country involving the leading global reinsurers as technological partners and/or shareholders. Also the Ministry of Finance is planning to abolish the State Insurance supervision authority and create an Agency on development of the insurance market, as well as services on protection of rights and legal interests of consumers of insurance products based merged into that Agency.

For more details about the Resolution visit the website of governmental web portal of the Republic of Uzbekistan.

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