How do outdated regulations and confusion in legislation affect insurance companies?
The Chairman of the Senate Nigmatilla Yuldoshev, addressing the nineteenth plenary session of the Senate of the Oliy Majlis of the Republic of Uzbekistan, criticized the fact that due to lack of control in the insurance market, billions of funds are being withdrawn from the country, and noted that the system’s capabilities are used insufficiently.
As it is known, in the world practice already in the nineteenth century, large risk insurance had an experience in creating reinsurance organizations by uniting insurance organizations into groups, societies or associations. However, this important mechanism is still not used in Uzbekistan.
According to the information, in order to participate in reinsurance with foreign companies, the authorized capital of the insurance company should not be less than 30 billion UZS, however, despite this, dozens of insurance companies that have not fulfilled this requirement are illegally engaged in this activity.
However, the insurance supervision inspectorate and the Ministry of Finance reconciled with such offenses and did not contact the appropriate authorities to take legal measures against the perpetrators.
– Over the past two years, the volume of voluntary insurance has grown by only 4 percent, in such conditions the incoming insurance premiums and coverage almost doubled, – N. Yuldoshev says. – This indicates that the insurance of state enterprises and enterprises with a state share based on an agreement between the leaders of these enterprises and insurance agents is pursuing personal interests.
In fact, the total capital of insurance organizations in Uzbekistan amounts to 543 billion UZS. Their funds on deposits in 2018 increased by 54 percent and amounted to 1.1 trillion UZS, and total investments – 2 trillion UZS.
Various obstacles and limitations in the regulations do not allow effectively using these funds, including attracting them to the authorized capital of insurance companies.
In short, outdated regulations, differences, confusion and other shortcomings block the path to these companies’ development.