LAW No. 533 OF 10th MARCH 2004 OF THE REPUBLIC OF KAZAKHSTAN.

CONCERNING MANDATORY INSURANCE IN PLANT GROWING

AMENDMENTS AND ADDITIONS INTRODUCED BY:
1)  Law No. 116 of 10th January 2006 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Concerning Issues of Division of Authority Between Levels of the State Administration. (Articles: 5, 9, 11, 14, 15, 16). Effective January 1, 2006;
2)  Law No. 125-IV of 31st January 2006 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues Concerning Entrepreneurship. (Articles: 5, 5-1 introduced, 10). Effective date n/a;
3)  Law No. 179-IV of 7th July 2006 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to the Law of the Republic of Kazakhstan “Concerning Mandatory Insurance in Plant Growing”. (Articles: 1, 3 replaced, 4 replaced, 4-1 introduced, 5, 5-1,  7, 8, 9, 10, 12 replaced, 13 replaced, 14, 15, 16, 16-1 introduced, 17). Effective date n/a; 
4)  Law No. 244 of 7th May 2007 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Obligatory Types of Insurance. (Articles: 1, 2, 4-1, 5, 5-2 introduced, 9, 10, 11, 12, 13, 14, 16, 17). Effective date n/a; 
5)  Law No.  188 of 17th July 2009 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Private Business. (Articles: 5, 5-1). Effective date n/a; 
6)  Law No. 234 of 30th December 2009 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Obligatory and Mutual Insurance, Taxation. (Articles: 1 replaced, 4-1, 5, 5-1, 5-2, 6, 7, 8, 9, 10, 12, 13, 14, 16, 17). Effective date n/a; 
7)  Law No. 258 of 19th March 2010 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of State Statistics and Taxation. (Articles: 5, 9 and 14). Effective date n/a; 
8)  Law No. 378 of 6th January 2011 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of State Control and Supervision. (Articles: 5, 5-1). Effective date n/a; 
9)  Law No. 452 of 5th July 2011 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Revision of the Competence of Authorised State Bodies and of the Government of the Republic of Kazakhstan to Pass Regulatory Legal Acts Establishing Requirements to Audited Entities. (Articles: 4-1, 5). Effective date n/a; 
10)  Law No. 30 of 5th July 2012 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of the Organisation of Activity of the National Bank of the Republic of Kazakhstan, Regulation of the Financial Market and Financial Organisations. (Articles: 5, 12, 14 and 17). Effective date n/a; 
11)  Law No. 36 of 10th July 2012 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of the Reduction of Permissive Documents and Optimisation of Controlling and Supervisory Functions of the State Bodies. (Article 5). Effective date n/a; 
12)  Law No. 124-V of 3rd July 2013 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legal Acts of the Republic of Kazakhstan on Issues of Bringing them into Line with the System of State Planning of the Republic of Kazakhstan. (Articles: 4, 4-1 and 5); 
13) Law No. 165 of 17th January 2014 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Agroindustrial Complex. (Article 1). Effective date n/a; 
14) Law No. 189 of 11th April 2014 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Civil Protection. (Articles:  4-1, 10, 15, 16-1 ). Effective date n/a; 
15) Law No. 227 of 3rd July 2014 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of the Improvement of Criminal Legislation. (Article 11). Effective January 1, 2015; 
16) Law No. 239 of 29th September 2014 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Delimitation of Powers Among the State Administration Levels.  (Articles:  1, 4-1 repealed, 5, 5-1, 9, 16). Effective date n/a; 
17) Law No. 269 of 29th December 2014 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of the Cardinal Improvement of Conditions for Business Activity in the Republic of Kazakhstan. (Article 5). Effective January 1, 2015; and
18) Law No. 311 of 27th April 2015 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Insurance and Islamic Financing. (Article 5-2). Effective date n/a.

This Law shall regulate social relations arising in the sphere of mandatory insurance in plant growing, and it shall establish the legal, financial, and organizational bases for its implementation.

The following fundamental definitions shall be used in this Law:

1) agent – a joint-stock company established under the decision of the Government of the Republic of Kazakhstan,  which is in the national managing holding in the sphere of agroindustrial complex, whose sole shareholder in the state;

2) evaluator (independent expert) * a natural person or legal entity which has a licence to carry out evaluation activity;

3) complete crop failure * a consequence of the influence of unfavourable natural phenomena upon crops, in case of which costs of further growing and harvesting exceed expected income from the harvest;

4) partial crop failure * a consequence of the influence of unfavourable natural phenomena upon crops, in case of which income assessed or actual per one hectare for production of a type of plant growing produce is less than the amount of the standard of costs per one hectare for production of a type of plant growing produce which is established at the time of conclusion of an obligatory insurance agreement;

5) unfavourable natural phenomenon * a natural phenomenon (long-term one * drought, frostkilling, shortage of warmth, excessive watering of the soil, excessive humidity of the air, flood, dryness, dry wind; short-term one * hail, downpour, frost, strong wind, mudflow), as a result of which destruction or damage of plant growing produce occurred;

6) acts of examination on the fact of the unfavourable natural phenomenon (henceforth – act of examination) – a document confirming cause-and-effect relations between partial or full destruction of crops and the influence of an unfavourable (unfabourable) natural (natural) phenomenon (phenomena), requirements to which are stipulated by this Law under the form established by the authorized body;

7) expected income from harvest * income to be determined by the commission in accordance with the technique for determination of crop failure areas which is approved by the authorised body in the field of plant growing;

8) plant growing * a complex of productions of the agriculture sector, which comprises producers of agricultural produce * natural persons and legal entities occupied with producing plant growing produce;

9) agreement of obligatory insurance in plant growing (henceforth * obligatory insurance agreement) * an agreement which is concluded between the insurer and the insurant on conditions defined by this Law;

10) mutual insurance society in plant growing (henceforth * society) * a legal entity established in the organisational legal form of a consumer cooperative for the purposes of carrying out mutual insurance of property interests of its members in the field of obligatory insurance in plant growing;

11) plant growing produce * produce obtained in the process of cultivation of agricultural crops (cereals, oil plants,  sugar beet, cotton);

12) authorised state body in the field of plant growing * a state body to be determined by the Government of the Republic of Kazakhstan, which carries out state regulation in the sphere of development of plant growing;

13) insurance case * an event, with the occurrence of which the obligatory insurance agreement stipulates effecting of an insurance payment;

14) insurance amount * a money amount, for which an object of obligatory insurance is insured and which constitutes a maximum amount of the liability of the insurer where an insurance case occurs;

15) insurance premium * a money amount, which the insurant is obliged to pay the insurer for the latter to accept the liabilities to effect an insurance payment to the insurant (beneficiary) in an amount determined by the obligatory insurance agreement;

16) insurance payment * a money amount which is paid by the insurer to the insurant (beneficiary) within an insurance amount where an insurance case occurs;

17) insurer *  a legal entity which obtained a licence for the right to carry out obligatory insurance in plant growing in accordance with the procedure established by the legislation of the Republic of Kazakhstan, which is obliged, where an insurance case occurs, to make an insurance payment to the insurant or another person, in whose favour the agreement is concluded (beneficiary), within an amount (insurance amount) determined by the agreement;

18) insurant * a person which carries out activity relating to production of plant growing produce and which concluded an obligatory insurance agreement with an insurer;

19) franchise * exemption of insurers from compensation of harm that does not exceed a certain amount;

20) standard of costs * costs relating to certain technological processes, types of work and items of costs at a rate per one hectare of production of a type of plant growing produce, which is expressed in the tenge.

1.  Legislation of the Republic of Kazakhstan on mandatory insurance in plant growing is based on the Constitution of the Republic of Kazakhstan and it shall consist of the Civil Code of the Republic of Kazakhstan, the Law of the Republic of Kazakhstan “On Insurance Activities”, Law of the Republic of Kazakhstan ‘Concerning Mutual Insurance’, this Law, and other normative legal acts of the Republic of Kazakhstan.

2.  Should an international treaty ratified by the Republic of Kazakhstan establish rules other than those contained in this Law, the rules of the international agreement shall apply.

3.  The effect of this Law shall not apply to the activities for cultivating the plant growing products on lands of non-agricultural designation and to the storage of plant growing products.

There shall be deemed the mandatory insurance object in plant growing the insured’s property interests associated with partial or full compensation of the insured’s losses in cases of occurrence of insured events, the size of which losses shall be established in accordance with this Law.

The objectives of mandatory insurance in plant growing shall be:

1) assurance of protection of property interests of the plant growing produce manufacturer against consequences of unfavourable natural phenomena, by way of insurance payments to be made in the cases, amounts and in accordance with the procedure, as provided for by this Law;

2) creation of conditions for crediting the plant growing produce manufacturers under the pledge of insured crops;

3) assistance in raising the efficiency of the state support to plant growing. 

1.  State control over the compliance by producers of plant-growing products with the obligation to make an agreement on obligatory insurance as established by this Law, shall be performed by the local executive body of a given province, city of republic’s significance and of the capital city.

2.  The authorised body in the sphere of plant growing shall:
1)  implement the state policy in the sphere of plant growing;
4)  improve legal and economic conditions for the development of plant growing;
5)  study situation of the state of the plant growing industry in the Republic and abroad;
10) elaborate and approve the methodology for determining crops destruction areas;
12) submit  to the National Bank of the Republic of Kazakhstan (hereinafter the National Bank), a register of societies with indication of its name and place of location; 
12-1) elaborate and approve the model form of an agreement on obligatory insurance in plant-growing and of an agreement on the procedure and conditions of partial compensation of insurance payments;
12-2) elaborate and approve quotas of the costs of production of kinds of plant-growing products liable to obligatory insurance, per one hectare of areas under crops;
12-3) elaborate and approve the procedure for using funds allocated to support obligatory insurance in plant-growing, and amounts of payment for agent’s services;
12-4) elaborate and approve under a proposal of the authorized state body in the sphere of environmental protection and of the authorized body in the sphere of civil protection criteria and characteristics to determine unfavourable natural phenomena;
12-5) elaborate and approve the procedure for formation by the local executive body of a district (city of province significance) and for organisation of work of a commission to determine sizes of areas under crops exposed to the influence of an unfavourance natural phenomenon, and the form of an act of examination;
12-6) elaborate and approve the model form of a certificate from a hydrometeorological service body and (or) from the authorized body in the sphere of civil protection, that confirms the fact of an unfavourable natural phenomenon;
13) perform other powers provided for by this Law, other laws of the Republic of Kazakhstan, acts of the President of the Republic of Kazakhstan and Government of the Republic of Kazakhstan.
2-1.  The local executive body of a province, city of republic’s significance and of the capital city shall:
1) perform state control over the compliance with the legislation of the Republic of Kazakhstan in the sphere of plant-growing;
2) perform control over activity of an agent, company, over the compliance by them with the legislation of the Republic of Kazakhstan concerning obligatory insurance in plant-growing;
3) consider cases of avoidance to make agreements of obligatory insurance by insurants and incompliance by a company with requirements of the legislation of the Republic of Kazakhstan concerning mutual insurance and this Law;
4) request and receive from an insurant, insurer, agent and company information and documents needed for that to perform own controlling functions;
5) establish the form and time for presentation by an insurant, insurer, agent and company of information and documents needed for that to perform own controlling functions.
3.  The local executive body of a district (city of province designation):
1) organise obligatory insurance for business entities;
2) request and receive from an insurant, insurer and agent information and documents needed for that to perform own functions, under the form established by the local executive body of the province, city of republic’s significance and capital city;
3) determine the optimum dates for the beginning and finishing seeding operations in a relevant territory with the breakdown by natural climatic zones according to types of plant growing produce, liable to mandatory insurance in plant growing;
3-1) present to the local executive body of the province, city of republic’s significance and capital city a list of producers of plant-growing products to be insured in a current year;
4) create the commission in accordance with Article 9 of this Law;
5) perform in the interests of local state administration other powers, which are imposed upon the local executive authorities by the legislation of the Republic of Kazakhstan.
4.  The  National Bank shall exercise state supervision over the activities of insurance organizations in accordance with the legislation of the Republic of Kazakhstan.
Article 5-1.  Procedure for Exercising State Control in the Sphere of Mandatory Insurance in Plant Growing
Introduced by 2)  Law No. 125-IV of 31st January 2006 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues Concerning Entrepreneurship.
Amended by 3)  Law No. 179-IV of 7th July 2006 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to the Law of the Republic of Kazakhstan “Concerning Mandatory Insurance in Plant Growing”;
5)  Law No.  188 of 17th July 2009 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Private Business; 
6)  Law No. 234 of 30th December 2009 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Obligatory and Mutual Insurance, Taxation; 
8)  Law No. 378 of 6th January 2011 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of State Control and Supervision; and
16) Law No. 239 of 29th September 2014 of the Republic of Kazakhstan Concerning the Introduction of Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Issues of Delimitation of Powers Among the State Administration Levels.

For purposes of the performance of state control the local executive body of a province, city of republic’s significance and of the capital city shall:

1) request from the agent the list of the insured which have concluded the mandatory insurance agreement in plant growing, indicating the insured types of plant growing products in a relevant territory;

4) draw up administrative violation protocols and impose administrative punishments in accordance with the legislation of the Republic of Kazakhstan concerning administrative violations.

State supervision in the field of obligatory insurance in plant-growing shall be performed in the form of an audit and other forms.

Audits shall be conducted in accordance with the Law of the Republic of Kazakhstan «Concerning State Control and Supervision in the Republic of Kazakhstan».  Other forms of state supervision shall be performed in accordance with this Law.

There shall be deemed the beginning of the inspection the moment when the inspection appointment act is handed over to the business entity to be inspected.

1.  Provisions contained in this Law shall be applied to societies with respect to special considerations established by legislative acts of the Republic of Kazakhstan regulating their activities.

Insurance of property interests of members of the society shall be made in accordance with the mutual insurance rules.

2.  Producers of plant growing products being members of the society shall not be subject to obligatory insurance with an insurer.

4.  Activities shall not be allowed which are directed to limitation or removal of competition, granting or obtaining of baseless advantages in conclusion of obligatory insurance agreements in plant growing by some insurers to others, infringement of rights and legal interests of insurants.