Unofficial translation

      This Law shall determine the legal status, the procedure for establishment and operation of the Insurance Payments Guarantee Fund, as well as the conditions for participation of insurance organizations, branches of non-resident insurance organizations of the Republic of Kazakhstan in the Insurance Payments Guarantee Fund and the principles for ensuring control over its activities.

Chapter 1. general provisions

      Article 1. Basic terms used in this Law

      The following basic terms are used in this Law:

      1) agent bank – a bank or organization carrying out separate types of banking operations, rendering services associated with making guarantee payments to creditors under an agency agreement with the Insurance Payments Guarantee Fund;

      2) injured person – a person, whose life, health was harmed as a result of vehicle operation by another person;

      3) harm compensation reserve – the amount of money generated by the Insurance Payments Guarantee Fund from initial one-time contributions and additional contributions, and also from income (losses) from its investment less the commission fee, which is used exclusively to compensate for harm caused to the life, health of an injured person and (or) funeral expenses in cases provided for by this Law;

      4) an advisory committee - a collegial consultative and advisory body representing the interests of insurance organizations, branches of non-resident insurance organizations of the Republic of Kazakhstan that are participants in the system of guaranteeing insurance payments;

      5) a creditor - a policyholder (an insured person, a beneficiary) having the right to receive a guarantee payment under a compulsory insurance contract of a forcibly liquidated insurance organization, forcibly terminating the activities of a branch of an insurance organization-non-resident of the Republic of Kazakhstan upon the occurrence of an insured event, under an annuity insurance contract of a liquidated insurance company, forcibly terminating the activities of a branch of an insurance company-non-resident of the Republic of Kazakhstan, guaranteed by the Insurance Payments Guarantee Fund, or another person who compensated an injured person (a person entitled to compensation for damage) for the damage caused within the scope of liability of the insurer established by the insurance contract and the laws of the Republic of Kazakhstan, and received the right for insurance payments;

      6) an additional contribution - the amount of money paid by an insurance organizations, a branch of a non-resident insurance organization of the Republic of Kazakhstan to the Insurance Payments Guarantee Fund for compulsory insurance of civil-legal liability of vehicles owners to form a reserve for compensation of damages in accordance with this Law;

      6-1) a branch of an insurance organization -non-resident of the Republic of Kazakhstan forcibly terminating its activities - a branch of an insurance organizations-non-resident of the Republic of Kazakhstan, in respect of which a decision was made by the authorized body to revoke the license for the right to carry out insurance activities;

      7) insurance organization under compulsory liquidation - an insurance organization-participant, in whose respect a court decision on compulsory liquidation has entered into force;

      8) equity capital - assets of the Insurance Payments Guarantee Fund reduced by its liabilities and the insurance payments guarantee reserve;

      9) mandatory contributions - the amount of money paid by an insurance organization participating in the Insurance Payments Guarantee Fund for guaranteed types of insurance in the manner specified by this Law and other regulatory legal acts of the Republic of Kazakhstan;

      10) an applicant - a legal entity registered as an insurance organization in accordance with the legislation of the Republic of Kazakhstan, or an insurance organization, a branch of a non-resident insurance organization of the Republic of Kazakhstan, which has passed registration, intending to obtain a license and (or) carry out activities on guaranteed types of insurance;

      11) guarantee payment for annuity insurance classes - the amount of money paid by the Insurance Payments Guarantee Fund to the policyholder (the insured, beneficiary) and (or) in favor of the insured within the annuity insurance guarantee in the manner and under the conditions provided for by this Law;

      12) guaranteed types of insurance - types of insurance, in respect of which this Law provides for mandatory participation in the Insurance Payments Guarantee Fund;

      13) guarantee payment for compulsory types of insurance - the amount of money paid by the Insurance Payments Guarantee Fund in the manner and on the terms provided for by this Law to a policyholder (an insured person, a beneficiary) in case of insured events that have occurred under an insurance contract of a forcibly liquidated insurance organization, that forcibly terminating the activities of a branch of an insurance organization - a non-resident of the Republic of Kazakhstan, in cases provided for by the Law of the Republic of Kazakhstan "On Insurance Activities";

      14) the system of guaranteeing insurance payments - a set of organizational and legal measures provided for by this Law, aimed at protecting the rights and legitimate interests of policyholders (insured persons, beneficiaries) associated with obtaining a guarantee payment for compulsory insurance classes of a forcibly liquidated insurance organization, that forcibly terminating the activities of a branch of an insurance organization - a non-resident organization of the Republic of Kazakhstan upon occurrence of an insured event, as well as a guarantee payment for annuity classes of insurance of a liquidated insurance organizations, forcibly terminating the activities of a branch of an insurance organization -non-resident of the Republic of Kazakhstan;

      15) an insurance organization, a branch of a non-resident insurance organization of the Republic of Kazakhstan, which are the participants in the system of guaranteeing insurance payments (insurance organization-participant), - an insurance organization, a branch of a non-resident insurance organization of the Republic of Kazakhstan, which have concluded a participation contract with the Insurance Payments Guarantee Fund;

      16) payments of the Insurance Payments Guarantee Fund for compensation of harm to the life, health of an injured person and (or) funeral expenses - the amount of money paid to the injured person, to whose life, health damage was caused, and to persons specified in paragraphs 4 and 5 of Article 17-1 of this Law, in cases provided for by this Law;

      17) reserve for guaranteeing insurance payments - the amount of money formed by the Insurance Payments Guarantee Fund at the expense of mandatory contributions, income (losses) received from their investment, minus commission, as well as money received by it from a forcibly liquidated insurance (reinsurance) organization, forcibly terminating the activities of a branch of an insurance organization-non-resident of the Republic of Kazakhstan in order to satisfy the requirements of the Insurance Payments Guarantee Fund and used in cases provided for in paragraph 2-2 of Article 12 of this Law;

      18) an insurance contract – a contract, concluded between a policyholder and an insurance organization, a branch of an insurance organization-non-resident of the Republic of Kazakhstan for guaranteed types of insurance;

      19) insurance organization under liquidation – a participating insurance organization, in whose respect the authorized body made a decision to revoke its license;

      20) emergency contributions - the amount of money paid additionally by an insurance organization participating in the Insurance Payments Guarantee Fund in cases provided for by this Law;

      21) standard participation agreement (hereinafter referred to as the participation agreement) - an agreement on participation in the insurance payments guarantee system, concluded between the Insurance Payments Guarantee Fund and participating insurance organization in the manner and under the conditions specified by this Law;

      22) contingent liabilities - obligations of an insurance organization participating in the Insurance Payments Guarantee Fund, formed by it for the payment of emergency contributions.

Article 2. Legislation on Insurance Payments Guarantee Fund

      Legislation on Insurance Payments Guarantee Fund is based on the Constitution of the Republic of Kazakhstan and consists of Civil Code of the Republic of Kazakhstan, Law of the Republic of Kazakhstan “On insurance activity”, this Law and other regulatory legal acts of the Republic of Kazakhstan.

      The provisions of this Law established for insurance organizations, as well as the provisions of this Law regulating the grounds and procedure for making guarantee payments shall apply to the branches of insurance organizations-non-residents of the Republic of Kazakhstan, carrying out insurance activities on the territory of the Republic of Kazakhstan on guaranteed types of insurance, taking into account the specifics provided for by the Law of the Republic of Kazakhstan "On Insurance Activities".

Chapter 2. State regulation, control and supervision over the activities of the Fund for guaranteeing insurance payments

      Footnote. The title of Chapter 2 as amended by the Law of the Republic of Kazakhstan dated 03.07.2019 No. 262-VI (shall be enforced from 01.01.2020).

Article 3. State regulation, control and supervision over the activities of the Insurance Payments Guarantee Fund

      Footnote. The title of Article 3, as amended by the Law of the Republic of Kazakhstan dated 03.07.2019 No. 262-VI (shall be enforced from 01.01.2020).

      1. State regulation, control and supervision over the activities of the Insurance Payments Guarantee Fund (hereinafter - the Fund) is carried out by the authorized body for regulation, control and supervision of the financial market and financial organizations (hereinafter - the authorized body).

      Article 3-1. Supervisory response measures

      1. If the authorized body identifies violations of the requirements of the legislation of the Republic of Kazakhstan by the Fund, insurance organizations participating in the Fund, unlawful actions or inaction of officials or employees of the Fund, insurance organizations participating in the Fund that worsened the financial condition of the Fund, the authorized body has the right to apply supervisory response measures to the Fund or insurance organization participating in the Fund provided for by the legislation of the Republic of Kazakhstan on insurance and insurance activities.

      2. In order to eliminate the identified faults, risks or violations, the authorized body applies measures to improve the financial condition and (or) minimize the Fund’s risks in the form of suspension from duty of the persons specified in paragraph 1 of Article 4-1 of this Law, revoking at the same time the consent for appointment (election) to the Fund’s executive position for one of the following reasons:

      1) recurring (two or more times within twelve consecutive calendar months) breaches of the procedure for and size of investment of the assets of the Fund, funds of the insurance payments guarantee reserves and the harm compensation reserve;

      2) violation of the procedure and terms for making guarantee payments, payment for the insurance portfolio of an insurance (reinsurance) organization under compulsory liquidation transferred to a participating insurance organization in the manner and under the conditions stipulated by the legislation of the Republic of Kazakhstan on insurance and insurance activities, as well as payments to compensate for damages to the life, health of an injured person and (or) funeral expenses;

      3) repeated (two or more times within twelve consecutive calendar months) failure to notify the authorized body about the facts of violation by participating insurance organizations of the legislation of the Republic of Kazakhstan on insurance and insurance activities that came to his/her notice;

      4) disclosure or transfer to third parties (except for the authorized body) of information on the activities of participating insurance organizations obtained in the course of performance of their duties;

      5) a failure of the Fund to remedy shortcomings indicated in an audit report within three months of receipt of the audit report by the Fund;

      6) a failure to fulfill the requirements of the authorized body made within its competence, which is established by the legislation of the Republic of Kazakhstan.

Article 3-2. Sanctions

      Footnote. The law is supplemented by Article 3-2 in accordance with the Law of the Republic of Kazakhstan dated 30.12.2009 No. 234-IV ; is excluded by Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced from 01.01.2019).

Article 4. Competence of the authorized body and the National Bank of the Republic of Kazakhstan

      Footnote. The heading of Article 4 as amended by the Law of the Republic of Kazakhstan dated 03.07.2019 No. 262-VI (shall be enforced from 01.01.2020).

      1. The authorized body shall:

      1) accept regulatory acts, regulating the activity of the Fund and insurance organizations-participants, as well as regulating the issues of the procedure for carrying out guarantee payments;

      2) determine the conditions of participant agreement, being standard for all insurance organizations-participants;

      3) draw up the list of financial instruments authorized for purchase for the money of insurance payments guarantee reserves and the harm compensation reserve;

      6) establish the procedure and conditions of acquisition, as well as placement of the Fund’s shares of stock;

      6-1) approve the method of calculating the rate of mandatory, additional contributions and contingent liabilities, the procedure and deadlines for the payment of mandatory, additional and emergency contributions, the procedure for forming and accounting for contingent liabilities by insurance organizations participating in the Fund;

      7) coordinate the rates of compulsory and additional contributions, as well as conditional obligations of insurance organizations-participants for each calendar year, subject to payment by insurance organizations-participants to Fund, established by the board of directors of the Fund;

      8) give consent to the appointment (election) of the Fund’s executives, and also establish the procedure for giving consent, including criteria for the absence of impeccable business reputation, and a list of documents required for obtaining consent;

      9) apply supervisory response measures to the Fund, participating insurance organizations in the manner and on the grounds provided for by the legislation of the Republic of Kazakhstan on insurance and insurance activities;

      10) coordinate changes and additions, made into the charter of the Fund;

      10-1) conduct an audit of the Fund;

      10-2) coordinate corporate strategy, risk management policy, internal audit policy, accounting policy, as well as alterations and additions made;

      10-3) develop and approve the rules for charging commission fee by the Fund;

      11) carry out other powers, provided by this Law and the legislation of the Republic of Kazakhstan.

      1-1. The National Bank of the Republic of Kazakhstan, in agreement with the authorized body, determines the list, reporting forms (except for financial), the timing and procedure for its submission by the Fund to the National Bank of the Republic of Kazakhstan.

      2. The authorized body shall hold the veto right to decisions of general meeting of shareholders and board of directors of the Fund on the following issues:

      1) increase of the quantity of authorized shares of stock of the Fund;

      2) participation of the Fund in creation and the activity of other legal entities by transferring a part or several parts of assets, equal to ten and more percent from all the assets belonged to the Fund;

      3) increase of obligations of the Fund in the amount constituting ten and more percent from the amount of its own capital;

      4) redemption of own placed shares of stock by the Fund and prices for their redemption;

      5) consummation of main transactions and transactions, in consummation of which the fund is interested.

      3. Decisions adopted by the general meeting of shareholders and board of directors of the Fund shall be subject to coordination with the authorized body on the issues, in respect of which paragraph 2 of this Article establishes veto right in the manner and terms, provided by the regulatory legal acts of the authorized body.

      4. Non-compliance with requirements of paragraphs 2 and 3 of this Article by the Fund shall entail recognition of these transactions as invalid.

Article 4-1. Requirements for the Fund's management

      1. The Fund's management personnel are:

      1) the head and members of management body of the Fund;

      2) the head and members of the Fund's executive body;

      3) chief accountant of the Fund.

      2. A person may not be appointed (elected) as a manager of the Fund if:

      1) does not have higher education;

      2) does not have work experience for at least two years in international financial organizations, the list of which is set by the authorized body, and (or) in the sphere of providing and (or) regulating and (or) controlling and supervising financial services, and / or in organizations that audit financial organizations;

      3) does not have an impeccable business reputation.

      An impeccable business reputation is the existence of facts confirming professionalism, conscientiousness, absence of unexpunged or unpaid conviction, including the absence of an effective court decision on application of criminal punishment in the form of deprivation of the right to hold the position of an executive officer of a financial institution, bank and (or) insurance holding and to be a major participant (a major shareholder) of a financial organization for life;

      4) who was previously the head, a member of the management body, a head, a member of the executive body, a chief accountant of a financial organization, a head or a deputy head of a branch of a non-resident bank of the Republic of Kazakhstan, a branch of an insurance (reinsurance) organization- non-resident of the Republic of Kazakhstan, a branch of an insurance broker-non-resident of the Republic of Kazakhstan, a major participant - an individual, the head of a major participant - a legal entity of a financial organization within a period of not more than one year before the authorized body makes a decision on the conservation of a financial organization, the forced repurchase of its shares, the deprivation of a license of a financial organization, a branch of a non-resident bank of the Republic of Kazakhstan, a branch of an insurance (reinsurance) organization-non-resident of the Republic of Kazakhstan, a branch of an insurance broker- non-resident of the Republic of Kazakhstan, as well as the forced liquidation of a financial organization or declaring it bankrupt in the manner, established by the legislation of the Republic of Kazakhstan or entry into force of a court decision on the forced termination of activities of a branch of a non-resident bank of the Republic of Kazakhstan, a branch of an insurance (reinsurance) organization-non-resident of the Republic of Kazakhstan in cases established by the laws of the Republic of Kazakhstan. The specified requirement shall be applied within five years after the decision by the authorized body on conservation of a financial organization, the forced repurchase of its shares, the deprivation of the license of a financial organization, a branch of a non-resident bank of the Republic of Kazakhstan, a branch of an insurance (reinsurance) organization-non-resident of the Republic of Kazakhstan, a branch of an insurance broker-non-resident of the Republic of Kazakhstan, as well as the forced liquidation of a financial organization or declaring it bankrupt or entry into force of a court decision on the forced termination of activities of a branch of a non-resident bank of the Republic of Kazakhstan, a branch of an insurance (reinsurance) organization-non-resident of the Republic of Kazakhstan in cases established by the laws of the Republic of Kazakhstan;

      5) whose consent to the appointment (election) to the position of an executive employee of the Fund and (or) a financial organization, a branch of a non-resident bank of the Republic of Kazakhstan, a branch of an insurance (reinsurance) organization-non-resident of the Republic of Kazakhstan, a branch of an insurance broker-non-resident of the Republic of Kazakhstan has been revoked.

      The specified requirement shall be applied during the last twelve consecutive months after the decision by the authorized body to withdraw the consent to the appointment (election) to the position of an executive employee.

      3. The Fund’s executive has the right to perform relevant duties without coordination with the authorized body sixty calendar days of his/her appointment (election, being vested with relevant duties) at the longest

      After the expiration of the period specified in part one of this paragraph and in cases of failure to submit the full package of documents for approval to the authorized body or refusal by the authorized body in the agreement, the Fund must terminate the employment contract with this person or, in the absence of an employment contract, take measures to terminate the powers of this governing body employee.

      It is prohibited to perform duties (replacement temporarily absent) of the Fund's manager without agreement with the authorized body for more than the period specified in part one of this paragraph.

      The authorized body shall consider the documents submitted for the issue of consent for the appointment (election) of the Fund's management personnel within thirty working days from the date of submission of the full package of documents in accordance with the requirements of the normative legal act of the authorized body.

      In the event that the Fund submits an incomplete package of documents, the authorized body returns them to the Fund without consideration.

      4. The authorized body shall refuse to issue consent for the appointment (election) of the Fund's management on the following reasons:

      1) the discrepancy between the management personnel and the requirements set forth in this article, as well as subparagraph 20) of Article 1, paragraph 4 of Article 54, paragraph 2 of Article 59 of the Law of the Republic of Kazakhstan "On Joint Stock Companies", Article 9 of the Law of the Republic of Kazakhstan "On Accounting and Financial Reporting";

      2) a negative test result.

      Negative test result is:

      the candidate's test result is less than seventy percent of the correct answers;

      violation by a candidate or an interpreter (in case this interpreter was offered by the candidate himself) the testing procedure established by the authorized body;

      absence for testing at the appointed time before the expiry of the term of approval of the candidate by the authorized body;

      3) the Fund's failure to eliminate the comments of the authorized body or submission of the documents finalized taking into account the comments of the authorized body after the time limit for the consideration of documents by the authorized body, established by paragraph 3 of this article;

      4) submission of documents upon the expiration of the time limit specified in paragraph 3 of this article, during which the executive officer holds his post without agreement with the authorized body;

      7) the authorized body has information (facts) that the candidate was a party to a transaction recognized as committed for the purpose of manipulating the securities market and (or) causing damage to a third party (third parties).

      This requirement shall be applied within one year from the date of the earliest of the listed events:

      recognition by the authorized body of a transaction concluded on organized and (or) unorganized securities markets, as committed for the purpose of manipulation;

      receipt of facts confirming the infliction of damage to a third party (third parties) as a result of the transaction by the authorized body;

      8) availability of information from the authorized body that the candidate was an employee of a financial organization, a branch of a non-resident bank of the Republic of Kazakhstan, in respect of which the authorized body applied supervisory response measures and (or) on which an administrative penalty was imposed for an administrative offense provided for in Article 259 of the Code of the Republic of Kazakhstan on Administrative Offenses, for concluding a transaction recognized as made for the purpose of manipulating the securities market, and (or) by an employee of a financial organization, a branch of a non-resident bank of the Republic of Kazakhstan, whose actions caused damage to a financial organization, a branch of a non-resident bank of the Republic Kazakhstan and (or) a third party (third parties) participating in the transaction.

      This requirement shall be applied within one year from the date of occurrence of the earliest of the listed events:

      recognition by the authorized body of a transaction concluded on an organized and (or) unorganized securities market as made for the purpose of manipulation;

      receipt by the authorized body of facts confirming the damage caused as a result of this transaction to a financial organization, a branch of a non-resident bank of the Republic of Kazakhstan and (or) a third party (third parties).

      For the purposes of this subparagraph, an employee of a financial organization, a branch of a non-resident bank of the Republic of Kazakhstan means an executive employee or a person who performed his/her duties, and (or) a stock exchange trader, whose competence included making decisions on the issues that entailed the above mentioned violations.

      5. In the event of termination of an employment contract with an executive of the Fund, or termination of his/her authority, or transfer to another position in the Fund due to the refusal of the authorized body to give consent to his/her appointment (election) or failure to submit documents for approval to the authorized body by the deadline, specified in paragraph 3 of this article, this person may be re-appointed (re-elected) to the executive position in the Fund not earlier than ninety calendar days of the refusal to give consent to his/her appointment (election) or termination of his/her employment contract, or termination of authority, or transfer to another position, but not more than twice in twelve consecutive months.

      The Fund is obliged to notify the authorized body, within ten working days of the decision of the Fund’s relevant body, about all changes in the composition of its executives, including their appointment (election), transfer to another position, termination of an employment contract and (or) termination of authority, bringing an executive employee to disciplinary responsibility for committing a corruption offense, as well as about changes in the name, surname, patronymic (if it is indicated in the identity document) of an executive attaching copies of supporting documents.

      In the event that an executive employee is held criminally liable, the Fund shall notify the authorized body within ten working days of the day this information became known to the Fund

      6. In the event of two consecutive refusals by the authorized body to issue consent for appointment (election) to the position of the Fund's executive officer, this person may be appointed (elected) by the Fund's executive officer after twelve consecutive months from the date of adoption by the authorized body of the decision on the second refusal to grant consent on his election (appointment) in this Fund.

      7. The authorized body shall have the right to withdraw the granted consent for election (appointment) to the position of the Fund's manager on the following reasons:

      1) identification of inaccurate information on the basis of which the consent was given;

      2) the application of the supervisory response measure specified in paragraph 2 of Article 3-1 of this Law by the authorized body;

      3) the existence of an unexpunged or unpaid conviction;

      4) is excluded by Law of the Republic of Kazakhstan № 168-VІ as of 02.07.2018 (shall be enforced from 01.01.2019).

      The withdrawal by the authorized body of the consent to the appointment (election) of the Fund's executive employee shall be the basis for the withdrawal of previously issued consent (s) to this executive employee in other financial organizations, branches of non-resident banks of the Republic of Kazakhstan, branches of insurance (reinsurance) organizations-non-residents of the Republic of Kazakhstan, branches of insurance brokers-non-residents of the Republic of Kazakhstan.

      In the event that the authorized body withdraws consent to be appointed (elected) to the position of a senior employee of the Fund, the Fund shall be obliged to terminate the employment contract with this person or, in the absence of an employment contract, take measures to terminate the powers of this executive officer.

Chapter 3. Creation of the Fund and its activity

      Article 5. The procedure for the establishment of the Fund and its bodies

      1. The Fund is a non-profit organization in the form of a joint-stock company and operates on the basis of this Law and constituent documents.

      The Fund is the only organization in the territory of the Republic of Kazakhstan that guarantees insurance payments for guaranteed types of insurance.

      2. A shareholder of the Fund is a participating insurance organization with a license for carrying out activities on guaranteed types of insurance. The National Bank of the Republic of Kazakhstan may also be a shareholder of the Fund.

      The competence of the general meeting of shareholders is determined in accordance with the legislation of the Republic of Kazakhstan on joint-stock companies and non-profit organizations with account of the features provided for by this Law.

      3. The Fund’s shares are paid for exclusively in cash.

      The number of shares of each shareholder of the Fund, except for the National Bank of the Republic of Kazakhstan, is at least one thousand shares and not more than ten percent of the total number of allotted shares of the Fund.

      4. The Board of Directors of the Fund on a permanent basis with the right to vote includes representatives of the authorized body.

      The number of representatives of the National Bank of the Republic of Kazakhstan shall be at least twenty percent of all the members of the Board of Directors of the Fund.

      The Board of Directors of the Fund includes voting representatives of participating insurance organizations on an ongoing basis. The number of representatives of participating insurance organizations must be at least fifty percent of all the members of the Board of Directors of the Fund. Representatives of participating insurance organizations shall include representatives of participating insurance organizations operating in the “life insurance” industry, constituting at least fifty percent of the number of representatives of the participating insurance organizations.

      5. The Fund shall open separate bank accounts with second-tier banks of the Republic of Kazakhstan for accounting:

      funds of the insurance payments guarantee reserve for the “general insurance” industry;

      funds of the insurance payments guarantee reserve for the “life insurance” industry;

      funds of the harm compensation reserve;

      own funds intended to ensure the financial and economic activities of the Fund.

      It is prohibited for the Fund to use money placed in bank accounts opened for accounting for the funds of insurance payments guarantee reserves, the harm compensation reserve, for purposes not provided for by this Law.

Article 6. Competence of the board of directors of the Fund

      Within the limits, established by the charter of the Fund, the following issues shall be referred to the competence of the Fund’s board of directors:

      1) establishment of the rates of compulsory and additional contributions, as well as conditional obligations, provided by this Law, insurance organizations-participants for each calendar year, amount of emergency contributions, subject to payment by insurance organizations-participants to the Fund;

      1-1) is excluded by Law of the Republic of Kazakhstan No. 234-IV dated 30.12.2009;

      2) making a decision to request the authorized body to arrange an inspection of a participating insurance organization and (or) apply supervisory response measures and sanctions to it, which are provided for by the legislation of the Republic of Kazakhstan on insurance and insurance activities, including suspension or revocation of a license to carry out insurance activities;

      3) making a decision to pay compensation to creditors;4) selection of an agent-bank;

      4-1) establishment of limited amounts of procured loans and borrowings by the Fund;

      5) other powers in accordance with this Law and charter of the Fund.

      Article 6-1. The advisory committee

      1. The Fund must set up an advisor

      2. The advisory committee shall act on the basis of the charter thereof.

      The main tasks, term of office and procedure for electing members of the advisory committee, early termination of their powers, as well as the procedure for organizing its activities, including the procedure for convening, preparing and conducting in-person and absentee meetings of the advisory committee, are determined by the charter of the advisory committee approved by the Fund’s Board of Directors after consultation with the authorized body.

      3. The competence of the advisory committee includes preliminary consideration of issues related to the activities of the Fund, as defined by the charter of the advisory committee.

      4. Decisions of the advisory committee shall be documented in writing and are advisory in nature.

Article 7. Guarantees of the Fund

      1. From the effective date of a court decision on compulsory liquidation of a participating insurance organization engaged in the “general insurance” industry, the Fund undertakes to:

      1) payment of insurance portfolio of compulsorily liquidated insurance (reinsurance) organization, transferred to insurance organization-participant in the manner and on conditions, provided by the legislation of the Republic of Kazakhstan on insurance and insurance activity;

      2) carrying out of guarantee payments to creditors on all occurred insured accidents under the insurance agreements, on which the compulsorily liquidated insurance (reinsurance) organization refused (fully or partially) illegally or didn’t carry out insurance payment in full measure, up to the date of transferring (receipt) insurance portfolio to compulsorily liquidated insurance (reinsurance) organization in the manner, provided by the Law of the Republic of Kazakhstan “On insurance activity”.

      2. The guarantees of the Fund cover insurance contracts for guaranteed types of insurance not included in the register of insurance contracts of an insurance (reinsurance) organization under compulsory liquidation and (or) a single insurance database, provided that insurance contracts (insurance policies) have been executed in accordance with legislative acts of the Republic of Kazakhstan and regulatory legal acts of the authorized body and contain the signature of the insurer and (or) insurance agent under annuity insurance agreements.

      In this case, a creditor shall apply to liquidation commission of compulsorily liquidated insurance (reinsurance) organization.

      2-1. The guaranteed types of insurance, for which this Law provides for mandatory participation in the Fund, include:

      1) compulsory insurance of civil liability of vehicle owners;

      2) compulsory insurance of civil liability of a carrier to passengers;

      3) compulsory travel insurance;

      4) annuity insurance, carried out in accordance with the laws of the Republic of Kazakhstan “On Compulsory Insurance of Employee from Accidents upon Performance of Labour (Official) Duties by them” and “On Retirement Insurance in the Republic of Kazakhstan”.

      2-2. Under the annuity insurance guarantee scheme, the Fund ensures:

      continuity and timeliness of insurance payments under existing annuity insurance contracts concluded by an insurance (reinsurance) organization, from the date of appointment of the interim administration by the authorized body following its decision to revoke the license of the insurance (reinsurance) organization until the transfer of its insurance portfolio to another insurance (reinsurance) organization licensed for the “life insurance” industry;

      payment of an insurance premium under an annuity insurance contract concluded in case of recognition or extension (re-examination) of the degree of occupational disability of an employee, if it is impossible for the interim administration to transfer the insurance portfolio following the decision of the authorized body to revoke the license of the insurance (reinsurance) organization to another insurance (reinsurance) organization licensed for the “life insurance” industry, and upon termination of activities (liquidation) of a legal entity (employer).

      The procedure and conditions for making guarantee payments specified in part one of this paragraph and other payments by the Fund shall be determined by the regulatory legal act of the authorized body.

      3. The Fund shall assume the obligations on carrying out of payments on compensation for harm to life, health of injured person and (or) expenses for burial in cases, provided by subparagraph 2) of paragraph 1 of Article 8 of this Law.

Article 8. Main objectives and functions of the Fund

      1. Main objectives of the Fund are:

      1) protection of the rights and legitimate interests of creditors;

      2) ensuring of protection of rights and legal interests of persons, the life, health of which are inflicted by harm by other person in the result of traffic accident, in cases, provided by this Law.

      3) ensuring the functioning and development of the insurance payments guarantee system in the manner determined by this Law and regulatory legal acts of the authorized body.

      2. For performance of main objectives, the Funs shall carry out the following functions:

      1) carrying out of guarantee payments in accordance with this Law;

      1-1) payment of insurance portfolio of compulsorily liquidated insurance (reinsurance) organization, transferred to insurance organization-participant in the manner and on conditions, provided by the legislation of the Republic of Kazakhstan on insurance and insurance activity;

      2) attracting compulsory and emergency contributions of insurance organizations-participants;

      3) attracting additional contributions of insurance organizations-participants;

      4) carrying out of payments on compensation for harm to life, health of injured person and (or) expenses for burial in accordance with this Law;

      5) investment activity in the manner, determined by the legislation of the Republic of Kazakhstan.

      3. For the purpose of ensuring qualitative and well-timed performance of own functions, the Fund shall have the right to receive information within its competence from individuals and legal entities, as well as from state bodies, including information that is the insurance secrecy.

      Received details shall not be subject to the following disclosure.

      4. Workers of the Fund shall bear responsibility for disclosing the details, received in the course of carrying out their own functions by them, that are service, commercial secret, insurance secrecy or other secrets protected by the Law, in accordance with the Laws of the Republic of Kazakhstan.

Chapter 4. Procedure for participation in the Fund

Article 9. The procedure for participation in the Fund and the conditions for the acquisition of the Fund’s shares by insurance organizations

      1. The applicant shall be obliged to conclude a contract of participation in the procedure provided for by this Law to obtain a license for the right to carry out insurance activities for the types of insurance that are guaranteed.

      2. To conclude a participation contract, purchase of shares of the Fund, the applicant shall submit to the Fund copies of the following documents:

      1) certificates of state registration (re-registration);

      2) certificates of accounting registration (for a branch of an insurance organization-non-resident of the Republic of Kazakhstan);

      3) the charter simultaneously with the original for verification or a notarized copy of the charter;

      4) regulations on a branch of an insurance organization-non-resident of the Republic of Kazakhstan simultaneously with the original for verification or a notarized copy of the regulation on a branch of an insurance organization-non-resident of the Republic of Kazakhstan.

      3. In the event of termination of insurance activities for the guaranteed types of insurance and termination of the insurance contracts by the insurance organization-participant, the insurance organization-participant shall be obliged to carry out the alienation of its shares by selling them to the shareholders of the Fund. In case of a shareholder's refusal to purchase shares of the Fund, the Fund shall be obliged to redeem shares at a price determined in accordance with the procedure for determining the value of shares.

      4. The form, content and terms of the contract of participation must comply with the requirements of the Civil Code of the Republic of Kazakhstan and this Law.

Article 10. Compulsory conditions of participant agreement

      Participant agreement shall contain:

      1) full name of parties, details on their location area and banking details;

      2) specification on the subject of agreement, conforming to this Law;

      3) rights and obligations of parties, conforming to this Law;

      4) procedure for payment of compulsory and emergency contributions, as well as formation of conditional obligations;

      5) conditions and procedure for determination of amount and carrying out of guarantee payment to a creditor;

      7) is excluded by Law of the Republic of Kazakhstan No. 128 dated 20.02.2006 (see Article 2 for the order of enforcement);

      9) conditions of termination of the participant agreement;

      10) conditions on responsibility of parties for violation of the participant agreement;

      11) is excluded by Law of the Republic of Kazakhstan No. 338-IV dated 15.07.2010 (see Article 2 for the order of enforcement).

      In existence of a license for carrying out of compulsory insurance of civil responsibility of the vehicle owners belonged to insurance organization-participant, the following conditions shall be subject to compulsory inclusion in participant agreement:

      1) procedure for payment of additional contributions;

      2) responsibility of parties.

Article 11. Termination of participant agreement

      Participant agreement shall be terminated:

      1) on general basis, provided by civil legislation of the Republic of Kazakhstan;

      2) in case of terminating the activity by insurance organization-participant of the Fund on guaranteed types of insurance and termination of validity of insurance agreements on such types of insurance.

Article 12. Compulsory and emergency contributions, procedure for their payment. Borrowings of the Fund

      1. Insurance organization-participant shall be obliged to pay compulsory and emergency contributions in accordance with the participant agreement.

      Rate of compulsory contributions shall be determined by the Fund of an annual basis.

      Method of calculating the rate of compulsory contributions, procedure and terms of their payment shall be established by the regulatory legal acts of the authorized body.

      2. Under annuity insurance contracts, the amount of mandatory contributions is calculated on the basis of the volume of created insurance reserves for guaranteed types of insurance.

      The amount of mandatory contributions for other guaranteed types of insurance is calculated on the basis of the volume of insurance premiums for guaranteed types of insurance accrued by an insurance organization.

      2-1. In case of violating the prudential regulations and other regulations and limits compulsory for compliance, established by the legislation of the Republic of Kazakhstan by insurance organization-participant, the rate of compulsory contribution for such insurance organization shall be subject to increase in the manner, provided by the regulatory legal act of the authorized body.

      2-2. Reserve of guarantee of insurance payments shall be used for covering:

      1) the obligations on guarantees of the Fund, provided by Article 7 of this Law;

      2) expenses, linked with carrying out the functions by the Fund, provided by subparagraphs 1) and 1-1) of paragraph 2 of Article 8 of this Law, as well as payments on compensation for harm to life, health of injured person and (or) expenses for burial in the cases, provided by this Law.

      3. In case the insurance payments guarantee reserve is not sufficient to carry out functions specified in subparagraphs 1) and 1-1) of paragraph 2 of Article 8 of this Law, the Fund shall attract emergency contributions from participating insurance organizations.

      In case the insurance payments guarantee reserve, created of mandatory and emergency contributions of participating insurance organizations, is not sufficient to carry out functions specified in subparagraphs 1) and 1-1) of paragraph 2 of Article 8 of this Law, the Fund uses its equity capital up to the amount of the required number of shares owned by insurance organizations related to the “general insurance” industry or the “life insurance” industry, depending on the insurance industry, for which the guarantee is provided. At the same time, the Fund’s expenses for implementation of the functions specified in subparagraphs 1) and 1-1) of paragraph 2 of Article 8 of this Law, which exceed the insurance payments guarantee reserve created of mandatory and emergency contributions of participating insurance organizations, shall be reimbursed from emergency contributions of participating insurance organizations within their contingent liabilities.

      In case the harm compensation reserve is not sufficient to make payments to compensate for damage to the life, health of an injured person and (or) funeral expenses provided for by this Law, the Fund has the right, until the end of a current quarter, to use the money of the insurance payments guarantee reserve in the amount approved by the Fund’s Board of Directors. To recover the insurance payments guarantee reserve, the Fund attracts emergency contributions in the amount, which is equal to the used amount of the insurance payments guarantee reserve.

      4. The amount of emergency contributions of a participating insurance organization under annuity insurance agreements is determined in proportion to the share of insurance reserves, created by an insurance organization, in the total amount of insurance reserves, created by all insurance organizations participating in the Fund, for these types of insurance as of the last reporting date.

      The amount of emergency contributions of a participating insurance organization to other guaranteed types of insurance is determined in proportion to the share of insurance premiums under its insurance contracts in the total amount of insurance premiums of all insurance organizations participating in the Fund for these types of insurance in a current reporting period.
     The procedure and deadlines for the payment of emergency contributions are established by the regulatory legal acts of the authorized body.

      5. If the reserve for guaranteeing insurance payments and own capital is insufficient to perform the functions stipulated in subparagraphs 1) and 1-1) of paragraph 2 of Article 8 of this Law, the National Bank of the Republic of Kazakhstan, the Government of the Republic of Kazakhstan and other organizations shall be entitled to extend to the Fund a loan that is subject to redemption due to extraordinary contributions of participating insurance organizations.

      6. Suspension of the validity of a license for the right to carry out the insurance activity shall not release insurance organization-participant from payment of compulsory and emergency contributions.

      7. From the date of deprivation of the insurance organization-participant (except for the branch of the insurance organization-non-resident of the Republic of Kazakhstan) of the license for the right to carry out insurance activities, the obligations of the insurance organization-participant to pay mandatory and extraordinary contributions shall be suspended until the court decision on compulsory liquidation of the insurance organization-participant comes into force.

      Obligations of an insurance organization-participant (with the exception of a branch of an insurance organization-non-resident of the Republic of Kazakhstan) to pay mandatory and extraordinary contributions shall be terminated from the date of entry into force of a court decision on its forced liquidation.

      Obligations of a branch of an insurance organization - non-resident of the Republic of Kazakhstan to pay mandatory and extraordinary contributions shall be terminated from the day the authorized body makes a decision to deprive the branch of an insurance organization - non-resident of the Republic of Kazakhstan of a license for the right to carry out insurance activities.

      Mandatory and extraordinary contributions paid by insurance organizations-participants in accordance with this Law shall not be refunded.

      Article 13. Formation of contingent liabilities

      A participating insurance organization is obliged to form and keep records of contingent liabilities.

      The size of contingent liabilities under annuity insurance contracts is calculated by an insurance organization participating in the Fund on the basis of the volume of created insurance reserves.

      The size of contingent liabilities for other guaranteed types of insurance is calculated by an insurance organization participating in the Fund on the basis of the volume of its insurance premiums for guaranteed types of insurance and the rate of contingent liabilities.

      2. The method of calculating the rate of contingent liabilities, the procedure for their formation and accounting shall be established by the regulatory legal acts of the authorized body.

Article 14. Improper fulfillment of obligations on payment of compulsory and emergency contributions

      1. In case of non-payment, undue payment or payment of compulsory or emergency contributions in incomplete volume, the Fund shall be obliged to notify the authorized body on improper fulfillment of the obligations by insurance organization-participant according to this Law within seven business days.

      2. Upon receipt of a notice from the Fund about improper performance of obligations by a participating insurance organization for the payment of mandatory and emergency contributions, the authorized body applies sanctions and supervisory response measures provided for by the legislation of the Republic of Kazakhstan on insurance and insurance activities to this insurance organization.

      Chapter 5. Guarantee payments and other protective measures

      Article 15. Grounds and procedure for making a guarantee payment for compulsory classes of insurance

      1. Right of demand of a creditor to the Fund on carrying out of guarantee payment shall be created from the date of enforcement of court decision on compulsory liquidation of insurance organization-participant.

      Creditors shall have the right to receive the guarantee payment:

      1) on all occurred insured accidents during the period of enforcement of court decision on its compulsory liquidation under insurance agreements, on which the compulsorily insurance organization refused illegally (fully or partially) or didn’t carry out insurance payment in full measure;

      2) on insured accidents, occurred in the period from the date of enforcement of court decision on compulsory liquidation of insurance organization up to the date of transfer (receipt) of insurance portfolio of compulsorily liquidated insurance (reinsurance) organization in the manner, provided by the Law of the Republic of Kazakhstan “On insurance activity”.

      2. Upon creation of creditor’s right of demand to the Fund on the grounds, provided by subparagraph 1) of paragraph 1 of this Article, the creditor shall have the right to apply to the Fund with written application on carrying out of guarantee payment within two months from the date of enforcement of court decision on compulsory liquidation of insurance organization-participant.

      After receiving the creditor’s claim, a participating insurance organization or the Fund, in the manner prescribed by the regulatory legal acts of the Republic of Kazakhstan or an insurance contract, works to establish the insured event and the extent of damage caused.

      3. Upon occurrence of insured accident under the insurance agreement in case, provided by subparagraph 2) of paragraph 1 of this Article, a creditor shall have the right to apply with requirement on carrying out of insurance (guarantee) payment directly to the Fund or insurance organization-participant of the Fund.

      After receipt of requirement of the creditor, insurance organization-participant or the Fund shall conduct the work on determination of insured accident and size of inflicted harm in the manner, provided by the legislative acts on compulsory insurance or insurance agreement.

      4. After representing complete package of documents by the creditor or insurance organization-participant, required for carrying out of guarantee payment, the Fund shall adopt decision on carrying out of guarantee payment or on refusal in carrying out of guarantee payment.

      5. The Fund shall compensate for expenses of insurance organizations-participants, linked with carrying out of arrangements, including the expenses for evaluating harmed property, provided by paragraph 3 of this Article in amount of factual expenses, but no more than seven monthly calculated indices.

      6. The features of, procedure for and amount of guarantee payments, also for annuity classes of insurance, are determined in accordance with this Law and the regulatory legal acts of the authorized body.

      7. Guarantee payment shall not cover moral damage, creditor’s loss of profit, penalty under insurance agreement and other expenses, previously charged in a judicial proceeding from compulsorily liquidated insurance (reinsurance) organization.

      8. Guarantee payment to creditors shall be carried out by the Fund immediately or through the agent-bank in non-cash form on banking account of the creditor or by cash money under agreement of parties.

      9. From the date of carrying out of guarantee payment to a creditor of compulsorily liquidated insurance organization, the creditor’s right of demand under insurance agreement shall be transferred to the Fund in the volume of carried out guarantee payment.

      Transferred right of demand of a creditor, as well as requirement on compensation of expenses, linked with carrying out of guarantee payment shall be submitted by the Fund to liquidation commission of compulsorily liquidated insurance organization (hereinafter – liquidation commission) in the manner, provided by the legislation of the Republic of Kazakhstan.

      10. The Fund shall publish statement on carrying out of guarantee payments to creditors of compulsorily liquidated insurance (reinsurance) organization on occurred insured accidents in periodical printed publications, distributed over the whole territory of the Republic of Kazakhstan in Kazakh and Russian languages within ten business days from the date of receiving a copy of enforced court decision on compulsory liquidation of insurance organization-participant.

      Article 15-1. Grounds and procedure for making a guarantee payment for guaranteed annuity classes of insurance

      1. The creditor’s right to claim a guarantee payment from the Fund arises two working days after the transfer to the Fund of the register of annuity insurance contracts, for which the guarantee is provided in accordance with subparagraph 1) of paragraph 2 of this article within the terms established by the Law of the Republic of Kazakhstan “On Insurance Activities”, by the interim administration appointed by the authorized body following its decision to revoke the license of an insurance organization.

      2. Creditors have the right to receive a guarantee payment:

      1) under annuity insurance contracts provided for by subparagraph 4) of paragraph 2-1 of Article 7 of this Law, which are in force as of the date of appointment of the interim administration by the authorized body following its decision to revoke the license of an insurance organization;

      2) under annuity insurance contracts concluded in connection with the recognition or extension (re-examination) of the degree of occupational disability of an employee when it is impossible for the interim administration to transfer the insurance portfolio and upon termination of activities (liquidation) of a legal entity (employer), from the date of appointment of the interim administration by the authorized body.

      The rights of creditors to receive guarantee payments specified in part one of this paragraph are valid until the date of transfer of the insurance portfolio of a participating insurance organization under liquidation in the manner prescribed by the Law of the Republic of Kazakhstan “On Insurance Activities” to another insurance organization licensed for the “life insurance” industry.

      If an individual applies to the Fund in connection with the emergence of the right to claim a guarantee payment from the Fund on the grounds specified in subparagraph 2) of part one of this paragraph, the Fund makes the guarantee payment on the basis of documents received from the interim administration of the insurance organization in the manner and on the conditions provided for by this Law.

      3. Upon expiration of two working days after receipt of the register of annuity insurance contracts from the interim administration, the Fund undertakes to ensure the continuity and timeliness of guarantee payments for the annuity insurance classes specified in subparagraph 1) of part one of paragraph 2 of this article.

      Upon the occurrence of the case specified in subparagraph 2) of part one of paragraph 2 of this article, the creditor has the right to apply for entering into an annuity insurance contract to another insurance organization licensed for the “life insurance” industry.

      The Fund pays the insurance premium under annuity insurance contracts specified in subparagraph 2) of part one of paragraph 2 of this article in the manner and on the conditions provided for by the regulatory legal act of the authorized body.

      Upon expiration of an annuity insurance contract concluded on the grounds specified in subparagraph 2) of part one of paragraph 2 of this article, a subsequent annuity insurance contract in connection with the recognition or extension (re-examination) of the degree of occupational disability of an employee shall be concluded with an insurance organization that accepted the insurance portfolio in compulsory employee insurance against accidents in the performance of labour (official) duties.

      4. The Fund has no right to refuse to make the guarantee payment provided for in paragraph 2-2 of Article 7 of this Law.

      5. The guarantee payment to creditors specified in subparagraph 1) of part one of paragraph 2 of this article shall be made directly by the Fund by bank transfer to the creditor’s bank account or in cash within the terms established by paragraph 1 of this article.

      6. The right of creditor’s claim under an insurance contract to the extent of the guarantee payment made is transferred to the Fund on the day the guarantee payment is made to the creditor of an insurance organization under liquidation.

      The Fund places the transferred right of creditor’s claim, and also the claim for reimbursement of expenses related to the making of a guarantee payment on the liquidation commission of an insurance organization under compulsory liquidation in the manner prescribed by the legislation of the Republic of Kazakhstan.

      7. Within two working days of appointment of the interim administration by the authorized body following its decision to revoke the license of an insurance organization, the Fund shall announce the date of guarantee payments to creditors in the Kazakh and Russian languages in two periodicals distributed throughout the territory of the Republic of Kazakhstan ​​and on its website.

Article 16. Additional methods of protection of the insurants’ rights

      Footnote. Article 16 is excluded by Law of the Republic of Kazakhstan No. 338-IV dated 15.07.2010 (see Article 2 for the order of enforcement).

Article 17. Termination of guarantees of the Fund

      Guarantees of the Fund shall be terminated in cases of:

      1) carrying out of guarantee payment in accordance with this Law;

      2) expiration of the creditor’s recourse period established by Article 15 of this Law (for guarantee payments for compulsory insurance classes);

      3) expiration of the term of validation of insurance agreement;

      4) payment of insurance portfolio of compulsorily liquidated insurance (reinsurance) organization, transferred to insurance organization-participant in the manner and on conditions, provided by the legislation of the Republic of Kazakhstan on insurance and insurance activity.

Chapter 5-1. Payments of the Fund on compensation of harm, inflicted to life, health of injured person and (or) expenses for burial

      Footnote. The Law is supplemented by chapter 5-1 in accordance with Law of the Republic of Kazakhstan No. 244 dated 7 May 2007 (shall be enforced from 1 October 2008).

Article 17-1. Right of receiving payments on compensation for harm, inflicted to life, health of injured person and (or) expenses for burial

      1. Payments on compensation for harm, inflicted to life, health of injured person (hereinafter – payment on compensation for harm) and (or) expenses for burial shall be performed by the Fund in cases of non-identification of a person, evaded from the place of traffic accident and responsible for infliction of harm, to injured person.

      Payments on compensation for harm to life of injured personshall be carried out by the Fund only upon infliction of gross harm to health.

      2. Citizens of the Republic of Kazakhstan, as well as foreign persons and stateless persons shall have the right to receiving payments on compensation for harm.

      This right shall not apply to foreign persons and stateless persons that do not have available insurance agreement against the accidents.

      3. Requirement of injured person or persons, mentioned in paragraph 4 of this Article on carrying out of payment on compensation for harm, as well as requirement of persons, mentioned in paragraph 5 of this Article, on compensation of expenses for burial shall be submitted to the Fund within one year from the moment of occurrence of case, provided by paragraph 1 of this Article.

      4. In case of death of injured person, the right of demand on carrying out of payment on compensation for harm shall be transferred to a person (persons) having the right to compensation for harm due to death of injured person according to the legislative acts of the Republic of Kazakhstan.

      5. The person who carried out the funeral of a victim, the Fund shall reimburse the actual burial expenses not exceeding the amount established by paragraph 6 of Article 17-2 of this Law on the basis of written application with the attachment of the documents specified in subparagraphs 1), 4), 6) and 7) paragraph 2 of Article 17-2 of this Law.

Article 17-2. Carrying out of payments on compensation for harm and (or) expenses for burial by the Fund

      1. Injured person or persons, mentioned in paragraphs 4 and 5 of Article 17-1 of this Law shall apply with application with attachment of documents, required for carrying out of payments on compensation for harm and (or) expenses for burial, directly to the Fund.

      2. The application on payments on compensation for harm and (or) expenses for burial shall be enclosed by the following documents:

      1) document, confirming the fact of occurrence of the case, provided by paragraph 1 of Article 17-1 of this Law;

      2) copy of opinion of public health organization in which the injured person was provided by medical assistance due to inflicted harm to life in the result of traffic accident, with the specification of nature of injuries and mains, diagnosis, period of temporary disability received by injured person;

      3) copy of opinion of the institutions of medical and social or forensic medical examination;

      4) notarized copy of death certificate of injured person;

      5) document, confirming the right of a person, having the right to compensation for harm (in case of death of injured person) according to legislative acts of the Republic of Kazakhstan;

      6) documents or their copies, confirming actual expenses for burial;

      7) copy of identity document.

      3. After representing the complete package of documents, required for carrying out of payments on compensation for harm and (or) expenses for burial by injured persons or persons, provided by paragraphs 4 and 5 of Article 17-1 of this Law, the Fund shall adopt decision on carrying out of payment on compensation for harm and (or) expenses for burial or on refusal in their carrying out.

      4. Decision on payment on compensation for harm and (or) expenses for burial shall be adopted by the Fund within thirty business days from the date of receiving the documents, provided by paragraph 2 of this Article. Payment on compensation for harm and (or) expenses for burial shall be carried out by the Fund within five business days from the date of adoption of decision on payment on compensation for harm and (or) expenses for burial.

      5. Is excluded by Law of the Republic of Kazakhstan No. 234-IV dated 30.12.2009.

      6. Payments for compensation for damage to life, the health of the victim and (or) burial expenses are carried out in the following amounts (in monthly calculation indicators):

      1) for causing harm to life - 1,000;

      2) when causing serious damage to health - 500;

      3) expenses for burial - 100.

      7. Payment on compensation for harm shall not cover moral damage, as well as harm, inflicted to property, loss of profit of injured person or persons, provided by paragraph 4 of Article 17-1 of this Law, environmental damage.

      8. Payments on compensation for harm and (or) expenses on burial shall be carried out immediately by the Fund or through the agent-bank in non-cash form on banking account of injured person or persons, provided by paragraphs 4 and 5 of Article 17-1 of this Law.

      9. The Fund shall have the right to refuse in payments on compensation for harm and (or) expenses for burial in the following cases:

      1) the actions of the victim are recognized in accordance with the procedure established by legislative acts of the Republic of Kazakhstan, intentional criminal or administrative offenses, which are in causal relationship with the transport incident;

      2) application of the Fund or insurance organization-participant upon expiry of one year from the moment of occurrence of the case, provided by paragraph 1 of Article 17-1 of this Law;

      3) traffic accident occurred due to insuperable force, in other words emergency and unavoidable circumstances in these conditions, such as influence of atomic explosion, radiation or radioactive contamination, military activities, civil war, meetings, rallies, marches, picketings and demonstrations, mass disorders and strikers;

      4) non-presentation of complete package of documents or presentation of unreliable documents, provided by paragraph 2 of this Article.

      In existence of grounds for refuse in carrying out of payments on compensation for harm and (or) expenses for burial, the Fund shall be obliged to refer notification in written form with substantiated explanation of the reasons for refusal within thirty business days from the date of receiving complete package of documents.

      10. For carrying out of function by the Fund, provided by subparagraph 4) of paragraph 2 of Article 8 of this Law, the Fund shall request information in the Ministry of Internal Affairs of the Republic of Kazakhstan and General Prosecutor’s Office of the Republic of Kazakhstan.

      Procedure, volume and terms of providing information shall be established by the act of the Ministry of Internal Affairs of the Republic of Kazakhstan and order of the General Prosecutor’s Office of the Republic of Kazakhstan.

      Details received by the Fund shall not be subject to disclosure.

Article 17-3. Right of counter demand to a person inflicted harm

      The Fund shall have the right of counter demand to a person inflicted harm to injured person within the payment on compensation for harm and (or) expenses for burial in recognition of expenses, incurred by the Fund due to considering the requirement of injured person or persons, provided by paragraphs 4 and 5 of Article 17-1 of this Law, on carrying out of payments on compensation for harm and (or) expenses for burial.

Article 17-4. Creation of reserve of compensation for harm

      1. Carrying out of payments on compensation for harm and (or) expenses for burial shall be performed by the Fund at the expense of funds from reserve of compensation for harm.

      In case of deficiency of the funds from reserve of compensation for harm for carrying out of payments on compensation for harm and (or) expenses for burial, the Fund shall use the insurance payments guarantee reserve in the manner, provided by this Law.

      2. Source of formation of the reserve of compensation for harm are initial original contributions in amount, established by the authorized body, and additional contributions paid by insurers in accordance with participant agreement, concluded with the Fund.

      Method of calculating the rate of additional contributions, procedure and terms of their paying shall be established by the regulatory legal acts of the authorized body.

      3. Amount of additional contributions shall be calculated proceeding from the volume of accrued premiums by insurance organization-participant on compulsory insurance of civil responsibility of the vehicle owners and rate of additional contributions.

      4. Suspension of validity of a license for the right of carrying out of insurance activity shall not release insurance organization-participant from payment of additional contributions.

      5. From the date of depriving insurance organization-participant of a license for carrying out of compulsory insurance of civil responsibility of vehicle owners, the obligations of insurance organization-participant on paying additional contributions shall be suspended before enforcement of court decision on compulsory liquidation of insurance organization-participant.

      Obligation of insurance organization-participant on paying additional contributions shall be terminated from the date of enforcement court decision on its compulsory liquidation.

      Additional contributions paid by insurance organizations-participants shall not be subject to return in accordance with this Law.

Article 17-5. Non-fulfillment or improper fulfillment of obligations on paying additional contributions

      1. In case of non-paying, undue paying or payment of additional contributions in incomplete volume, the Fund shall be obliged to notify the authorized body on non-fulfillment or improper fulfillment of the obligations by insurance organization-participant according to this Law within seven business days.

      2. Upon receipt of a notice from the Fund about a failure to fulfill or improper fulfillment of the obligation to pay additional contributions by a participating insurance organization, the authorized body may apply sanctions and supervisory response measures provided for by the legislation of the Republic of Kazakhstan on insurance and insurance activities to this insurance organization.Chapter 6. Rights and obligations of participants of insurance payments guarantee system

Chapter 6. Rights and obligations of participants in the insurance payment guarantee system

Article 18. Rights and obligations of the Fund

      1. The Fund shall have the right to:

      1) demand payment of compulsory, emergency and additional contributions in the manner, provided by the legislation of the Republic of Kazakhstan;

      2) apply before authorized body on inclusion of its representative into composition of liquidation commission and participant in liquidation proceeding of compulsorily liquidated insurance organization in the manner, provided by the legislation of the Republic of Kazakhstan;

      3) demand representation of information and documents, required for implementing the tasks of the Fund from liquidation commission and a creditor;

      4) request details from authorized body on financial condition of insurance organizations-participants, quantity of concluded insurance agreements by insurance organization-participant and other required information, with the exception of details, constituting insurance secrecy and other secrets protected by the Law of the Republic of Kazakhstan;

      5) refuse the creditor a guarantee payment in the cases provided for by this Law, the insurance contract or legislative acts of the Republic of Kazakhstan;

      6) in case of occurrence of the event specified in part two of paragraph 3 of Article 15-1 of this Law, engage an independent actuary to verify the adequacy of the calculation of the insurance premium under the annuity insurance contract concluded between the creditor and the insurance organization licensed for the “life insurance” industry;

      7) following the annual audit results, receive a commission fee, the marginal value of which may not exceed seven and a half percent of the investment income from investing funds of the insurance payments guarantee reserve related to the “general insurance” industry, funds of the insurance payments guarantee reserve related to the “life insurance” industry”, funds of the harm compensation reserve.

      2. The Fund shall be obliged to:

      1) enter into a participation agreement with an insurance organization, which is obliged to participate in the Fund in accordance with the legislative acts of the Republic of Kazakhstan;

      1-1) keep record of insurance payments guarantee reserves, the harm compensation reserve, income (losses) from investing the contributions of participants in the insurance payments guarantee system separately for the “general insurance” industry and the “life insurance” industry;

      2) invest the assets in financial instruments in the manner, determined by the legislation of the Republic of Kazakhstan;

      3) submit to the National Bank of the Republic of Kazakhstan reports (except for financial), the list, forms, terms and procedure for submission of which are established by the National Bank of the Republic of Kazakhstan in agreement with the authorized body;

      4) represent own financial reporting to insurance organizations-participants on their requests in the volume, determined in accordance with the participant agreement;

      5) publish audited annual financial statements in the Kazakh and Russian languages ​​in print periodicals distributed throughout the territory of the Republic of Kazakhstan;

      6) carry out control of the procedure for paying compulsory, emergency and additional contributions by insurance organizations-participants, as well as of formation of conditional obligations by them;

      7) carry out guarantee payments to creditors on obligations of compulsorily liquidated insurance organization in the manner, provided by this Law and regulatory legal acts of the authorized body;

      8) conduct an audit;

      9) notify the authorized body on the facts of violating the legislation of the Republic of Kazakhstan on insurance and insurance activity became known to it by insurance organizations;

      10) notify liquidation commission on carrying out of guarantee payment to a creditor;

      11) is excluded by Law of the Republic of Kazakhstan No. 338-IV dated 15.07.2010 (see Article 2 for the order of enforcement);

      12) use all information on activity of insurance organizations became known to it exclusively for business purposes in the course of carrying out its own functions;

      13) compensate the expenses of insurance organizations-participants in the manner, provided by paragraph 5 of Article 15 of this Law.

      2-1. The Fund shall carry out recording of operations conducted by it on business accounting and financial reporting in accordance with the legislation of the Republic of Kazakhstan.

      2-2. In order to inform policyholders (the insured, beneficiaries), persons intending to enter into an insurance contract about the activities of the Fund, the latter is obliged to post the following information on its website:

      1) its full name, address (location), telephone numbers, business hours, including those of its branches and representative offices;

      2) information on its shareholders;

      3) information on its executives;

      4) information on the state registration number and business identification number;

      5) information on the types of activities performed;

      6) audited annual financial statements for previous three reporting years;

      7) performance reports for previous three reporting years;

      8) information on participation in associations (unions), and also in the association of insurance (reinsurance) organizations and insurance brokers (if any);

      9) information on the participating insurance organizations.

      3. The Fund shall have other rights and bear other obligations, provided by the Laws of the Republic of Kazakhstan and participant agreement.

Article 19. Rights and obligations of insurance organization-participant

      1. In accordance with participant agreement, the insurance organization-participant shall have the right to:

      1) publish information of own participation in insurance payments guarantee system in periodical printed publications in state and Russian languages, distributed over the whole territory of the Republic of Kazakhstan;

      2) receive information from the Fund, related to carrying out of guarantee payments to creditors;

      3) demand representation of financial reporting of the Fund from the Fund.

      2. In accordance with participant agreement, insurance organization-participant shall be obliged to:

      1) pay compulsory and emergency contributions, as well as form conditional obligations in the manner, provided by the legislation of the Republic of Kazakhstan;

      2) provide the Fund with information necessary for calculating the amounts of mandatory, additional contributions and contingent liabilities, approving their rates, calculating the size of emergency contributions;

      3) inform the Fund on occurrence of own non-creditworthiness and facts of applying the sanctions of the authorized body;

      4) notify the Fund of termination of insurance activities on guaranteed types of insurance, for which the insurance organization is obliged to participate in the Fund, in accordance with the legislative acts of the Republic of Kazakhstan;

      4-1) carry out alienation of the Fund’s shares of stock belonged to it in cases, provided by this Law;

      5) notify the Fund on bringing of statement of claim in court on compulsory liquidation, as well as on adoption of decision by court on compulsory liquidation of insurance organization;

      5-1) notify the Fund abount the withdrawal by the authorized body of the license of a branch of an insurance organization-non-resident of the Republic of Kazakhstan and the procedure for the forced termination of activities of a branch of an insurance organization-non-resident of the Republic of Kazakhstan;

      6) is excluded by Law of the Republic of Kazakhstan No. 338-IV dated 15.07.2010 (see Article 2 for the order of enforcement);

      7) carry out arrangements, provided by paragraph 3 of Article 15 of this Law.

      Insurance organization-participant having a license for the right to carry out compulsory insurance of civil responsibility of the vehicle owners shall be obliged to pay additional contributions in the manner, provided by the legislation of the Republic of Kazakhstan.

      3. Insurance organization-participant shall have other rights and incur other obligations, provided by the Laws of the Republic of Kazakhstan and participant agreement.

Article 20. Rights and obligations of liquidation commission

      1. The liquidation commission shall have the right to receive notifications from the Fund on implementation of a guarantee payment to creditors of a forcibly liquidated insurance organization that forcibly terminates the activities of a branch of an insurance organization-non-resident of the Republic of Kazakhstan.

      2. Liquidation commission shall be obliged to:

      1) ensure access of authorized representatives of the Fund to information and documentation relating to the process of liquidation or forced termination of activities of a branch of an insurance organization-non-resident of the Republic of Kazakhstan, with the right to receive the copies and extracts from documents;

      2) notify the Fund immediately on termination of own obligations before a creditor;

      3) represent information and documents, concerning concluded insurance agreements required by the Fund.

      3. Liquidation commission shall have other rights and incur other obligations, provided by the Laws of the Republic of Kazakhstan.

Article 21. Rights and obligations of a creditor

      1. A creditor shall have the right to:

      1) demand carrying out of guarantee payment from the Fund in the manner, provided by this Law;

      3) demand satisfying the requirements from liquidation commission in amount, exceeding guarantee payment received from the Fund.

      2. A creditor shall be obliged to:

      1) represent the documents to the Fund, provided by the legislative act of the Republic of Kazakhstan on compulsory insurance or insurance agreement, confirming the fact of occurrence of insured accident and amount of losses under the insurance agreement;

      2) transfer all documents, required for implementing the rights of a creditor transferred to him (her) by the Fund in accordance with the legislation of the Republic of Kazakhstan.

      3. A creditor shall have other rights and incur other obligations, provided by the Laws of the Republic of Kazakhstan.

Chapter 7. Final and transitional provisions

Article 22. Liquidation or reorganization of the Fund

      1. Liquidation or reorganization of the Fund shall be carried out in accordance with the legislation of the Republic of Kazakhstan in recognition of special aspects, established by this Law.

      2. The Fund may be liquidated in the event of exclusion of the requirements for mandatory participation of insurance organizations in the Fund, provided for by the legislative acts of the Republic of Kazakhstan.

      3. Funds of the insurance payments guarantee reserve and reserve of compensation for harm, formed as from the date of liquidating the Fund shall be distributed among insurance organizations-participants of the Fund proportionally to the share of their participation in these reserves of the Fund.

Article 23. Responsibility for violation of the legislation of the Republic of Kazakhstan on the Fund

      Persons guilty in violation of the legislation of the Republic of Kazakhstan on the Fund shall bear responsibility, provided by the Laws of the Republic of Kazakhstan.

Article 24. Transitional provisions

      Footnote. Article 24 is excluded by Law of the Republic of Kazakhstan No. 234-IV dated 30.12.2009.