The document outlines requirements for the assets that cover reserves, based on the principles of reliability, liquidity, profitability, diversification, and returnability.
Main Provisions
Asset localization: at least 80% of the reserve funds (excluding the reinsurer's share) must be directed towards investments in the Kyrgyz Republic.
Mandatory and maximum shares:
Government and municipal securities — at least 10%.
Listed securities (highest and next categories on the stock markets of the Kyrgyz Republic) — up to 30%, with no more than 25% for one issuer.
Other securities (subject to established requirements) — up to 20%, with no more than 20% for one issuer.
Equity stakes (excluding joint-stock companies), mutual investment funds with profits for at least 3 years — up to 10%.
Bank deposits (in stable banks) — up to 50%.
Real estate — up to 30% for life insurance and up to 20% for non-life insurance.
The share of reinsurers in reserves (excluding RZNUs) — up to 95%; for one reinsurer — up to 25%.
Procedure
Chapter 1. General Provisions
These Rules for the placement of insurance (technical) reserves (hereinafter - the Rules) define the assets accepted as coverage (security) for the specified reserves.
The Rules establish requirements for the assets that can be used to cover insurance (technical) reserves.
Assets accepted for covering insurance (technical) reserves must meet the criteria of reliability, returnability, liquidity, profitability, and diversification.
Chapter 2. Types of Assets for Covering Insurance Reserves
The following assets may be accepted for covering insurance (technical) reserves:
1) government and municipal securities of the Kyrgyz Republic;
2) securities (excluding government and municipal bonds) of the highest and next listing categories on the stock exchanges of the Kyrgyz Republic;
3) securities not mentioned in item 2 that meet the requirements of item 3 of the Rules;
4) rights to equity stakes in commercial organizations (shares in partnerships and companies, excluding joint-stock companies, investment shares of profitable mutual funds for the last 3 years);
5) deposits in banks operating without losses in the banking services market for at least two years, in the absence of negative information about the bank's reputation and with a positive report from an external auditor for two reporting periods;
6) real estate;
7) the share of reinsurers in insurance reserves;
8) the share of one reinsurer in insurance reserves (excluding the share of reinsurers in reserves for reported but unsettled losses);
9) premium deposits for risks accepted for reinsurance;
10) accounts receivable from policyholders and insurance intermediaries for insurance premiums (excluding debts for mandatory state insurance);
11) accounts receivable for mandatory state insurance;
12) accounts receivable from reinsurers and insurers for reinsurance operations;
13) loans secured by collateral;
14) cash and funds in bank accounts;
15) gold and silver bars;
16) assets that can be accepted as coverage for reserves not related to insurance reserves of the Kyrgyz Republic, excluding the share of non-resident reinsurers.
At least 80% of the insurance reserve funds, excluding the reinsurer's share, must be invested in the territory of the Kyrgyz Republic, unless otherwise provided by legislation or international treaties applicable to the Kyrgyz Republic.
Insurers are required to place their reserve funds only in accordance with these Rules.
Chapter 3. Requirements for Asset Structure
Compliance with the principles specified in item 3 is determined by adherence to the structural ratios presented in the table attached to the Rules.
The total value of assets accepted for covering reserves must be at least equal to the total amount of insurance reserves.
When calculating ratios, the value of assets is determined as their book value.
| Appendix to the Rules for the Placement of Insurance (Technical) Reserves by Insurance Organizations |
TABLE of Structural Ratios of Assets and Reserves
| No. | Assets Accepted for Covering Insurance Reserves | |
| 1 | Government and municipal securities of the Kyrgyz Republic | At least 10% of the total amount of reserves |
| 2 | Listed securities (excluding government and municipal) | No more than 30% of the total amount of reserves and no more than 25% for one issuer |
| 3 | Other securities that meet the conditions of item 3 of the Rules | No more than 20% of the total amount of reserves and no more than 20% for one issuer |
| 4 | Equity stakes in commercial organizations and investment shares of profitable mutual funds | No more than 10% of the total amount of reserves |
| 5 | Deposits in reputable banks | No more than 50% of the total amount of reserves |
| 6 | Real estate | No more than 30% for life insurance and no more than 20% for non-life |
| 7 | Total share of reinsurers in reserves | No more than 95% for life and non-life insurance, excluding unsettled losses |
| 8 | Maximum share of one reinsurer in reserves | No more than 25% of the total amount of reserves |
| 9 | Premium deposits for risks accepted for reinsurance | No more than 50% of the total amount of reserves |
| 10 | Accounts receivable from policyholders and intermediaries (excluding mandatory insurance) | No more than 5% for life insurance and 50% for non-life |
| 11 | Accounts receivable for mandatory state insurance | 100% of the reserve for mandatory insurance |
| 12 | Accounts receivable for reinsurance | No more than 50% of the total amount of reserves |
| 13 | Secured loans | No more than 30% of the total amount of reserves |
| 14 | Cash and funds in settlement accounts for payments | At least 5% of the total amount of reserves |
| 15 | Gold and silver bars | No more than 15% of the total amount of reserves |
| 16 | Total value of assets not related to reserves in the territory of Kyrgyzstan | No more than 10% of the total amount of reserves |
