International Business Council Demands Cancellation of the National Reinsurer Project

Анна Федорова • 26.01.2026, 16:27 • Economy

The draft government resolution on the creation of a national reinsurance operator, which proposes that the State Insurance Organization (GSO) will become the sole national reinsurer, has faced criticism from the International Business Council (IBC) of Kyrgyzstan.

According to the proposal published by the Cabinet of Ministers, the following is suggested:

GSO will become the national reinsurance operator;
insurance companies will be required to transfer at least 10% of their risks to GSO, with the prospect of increasing this share to 50% in subsequent years;
all risks that are to be transferred to the Eurasian Reinsurance Company (ERC) will be directed through GSO;
a new regulation on the national reinsurance operator has been developed, which defines the legal and organizational aspects of its activities.

According to the data provided in the explanatory note, in 2024, 85% of the risks transferred for reinsurance amount to 1.27 billion soms, which goes abroad. The State Financial Supervision even held a meeting to discuss these issues.

In its official comment, the IBC points out that the project creates a quasi-monopoly situation with a mandatory "right of first refusal" and centralized underwriting.

“This will replace market mechanisms for risk management with bureaucratic processes, increasing regulatory risks and strengthening the dependence of the entire insurance market on a single state operator,” the organization emphasizes.

Main comments from the IBC:

Inefficiency

The project will not reduce the outflow of premiums abroad, as the NOP will only act as an intermediary for placing risks in international markets. Private insurers already have direct access to foreign reinsurers.

System vulnerability

Concentrating all reinsurance operations in the hands of a single entity makes the market vulnerable to failures of the NOP. Delays or refusals could paralyze insurance protection in sectors such as energy, transport, mining, aviation, and foreign trade, posing a threat to the country's economic security.

Conflict of interest

GSO conducts both direct insurance and reinsurance, giving it access to the commercial secrets of competitors (rates, portfolios), which violates competition principles.

Supervisory powers

The NOP is granted the right to request any documents and receive detailed reports monthly, effectively turning it into a supervisory body, undermining equal conditions in the market.

Risks for fronting and obligatory contracts

The obligation to transfer risks to the NOP makes it impossible to fulfill international fronting contracts and existing obligatory agreements with foreign reinsurers.

Unrealistic timelines

Five working days to review risks is five to ten times longer than in international practice. This could block large projects and deter investors.

The IBC emphasizes that this model has been borrowed from sanctioned countries (Russia, Belarus), where access to global markets is restricted. Kyrgyzstan does not face such restrictions, so the project is excessive and could cause harm.

“The project does not achieve its stated goals, creates systemic risks, undermines competition and diversification, and threatens economic security. The Council proposes to withdraw the document and revise the presidential decree so that the concept aligns with the current challenges of the insurance market. The development of national reinsurance capacity is not possible through administrative centralization and monopolization. It can only be achieved by maintaining market mechanisms, a competitive environment, trust among market participants, and predictable regulation, which is a necessary condition for the sustainable development of the insurance market and the economy of Kyrgyzstan as a whole,” the IBC concluded.

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