The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan has developed a draft resolution to revise how premiums are calculated for compulsory vehicle owners' third party liability insurance. The proposal centers on the bonus-malus system so premiums more closely reflect a driver's insurance history and risk profile, with prices falling after accident-free driving and rising after insured events. A key change would remove the rarely used M1 and M2 classes, which account for less than 0.001% of policyholders, reducing the maximum premium by 30%. The draft would also update bonus-malus coefficients for classes 4 to 13, with the average premium expected to rise from KZT 23,870 to KZT 28,130. Insurers would be allowed to use data from the unified insurance database to apply an additional discount or surcharge of up to 10% to the bonus-malus coefficient based on individual risk factors. For individuals who have remained in class 13 for more than five continuous years, insurers could apply deeper discounts, with the coefficient set at less than 90% of the prescribed value. Separate changes would refresh the methodology for regional adjustment coefficients using more current claims and earned premium data and set a single timetable for approving the adjustment coefficients, target loss ratio and certainty factor.
Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan 2026-05-05
Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan proposes compulsory vehicle owners' third party liability insurance pricing overhaul including a 30% cut to the maximum premium
Kazakhstan’s Agency for Regulation and Development of the Financial Market has issued a draft resolution revising premium calculation for compulsory motor third party liability insurance, refocusing the bonus-malus system so pricing better reflects drivers’ claims history and risk. The draft removes M1 and M2 classes, updates coefficients for classes 4–13, raising the average premium from KZT 23,870 to KZT 28,130, and lets insurers apply additional risk-based discounts or surcharges of up to 10% using unified insurance database data. It also updates the methodology for regional adjustment coefficients and introduces a single timetable for approving adjustment coefficients, the target loss ratio and the certainty factor.