Uzbekistan has increased minimal requirements on authorized capitals of local insurance companies. The decree of Uzbekistan’s president Islam Karimov “On further reforming and development of the insurance services market” envisages this measure.
Effective from 1 January 2008, the minimal authorized capital of risk insurance companies must be no less than US$500,000, of life insurance and reinsurance companies – not less than US$750,000.
The companies, engaged in compulsory insurance products, should have to increase their authorized capitals to US$1 million, reinsurers – to US$3 million.
The minimal authorized capital was previously fixed at the rate of US$150,000 for risk insurers, US$250,000 for life insurers, US$500,000 for companies, operating in compulsory insurance classes and US$2 million for reinsurers.
The decree of the president of Uzbekistan says not less than 90% of authorized capital of an insurer should be formed from monetary funds of their founders. Insurance companies have to accomplish the forming of their capitals by the time of obtaining of a license. At that, the document forbids local insurers to use credits and other types of debt capital.
According to the decree, during the second quarter of 2007 the Ministry of Finance of Uzbekistan has to determine the companies which don’t meet minimal capital requirements and to render them assistance in the re-profiling or reorganization of their insurance business, including by means of mergers and acquisitions.
As of the end of March 2007, there were 25 insurers in Uzbekistan, of which 23 companies operate in non-life insurance businesses, one company focused on life insurance and one specialized in reinsurance. In the first quarter of the current year Uzbek insurers collected 19.7 billion soums in premiums and paid out more than 1.5 billion soums in claims.
As of the beginning of the current year total authorized capital of Uzbek insurers amounted to US$66.7 million and 15.8 billion soums. Authorized capital of 11 companies totaled over 1 billion soums, of 6 companies – from 500 million soums to 1 billion soums, while 8 companies had authorized capital of less than 500 million soums.