Law on insurance comes into force in Turkmenistan

Turkmenistan Materials 7 January 2013 15:45

Turkmenistan, Ashgabat, Jan. 7 / Trend H. Hasanov /

In Turkmenistan, the law 'On insurance' has come into force, an official Turkmen source reported on Monday.

The law regulates the system of relations in the insurance market, sets the legal, economic and organisational basis of state regulation and oversight in the area of insurance.

According to the article of the law, foreign investors (insurance companies, reinsurers, insurance brokers) shall be entitled to perform insurance, reinsurance and brokerage activities through the establishment of joint ventures and upon obtaining the relevant licence.
The share of foreign capital (investor) in joint insurers, reinsurers and insurance brokers should not exceed 49 per cent of the charter capital.

The minimum size of the authorised capital of insurers, reinsurers and insurance brokers with participation of foreign investors is set by the Cabinet of Ministers of Turkmenistan.

According to the document, participation of non-resident organisations of Turkmenistan that are not insurance brokers, in the creation of an insurance broker in Turkmenistan, as well as opening of branches and representative offices of non-resident insurance brokers in Turkmenistan is prohibited.

Currently, in Turkmenistan, the work on establishment of a new insurance company, the closed joint stock company is being undertaken

At a government meeting President Gurbanguly Berdimuhamedov emphasised that in transition to a market economy, insurance is an important factor promoting economic and business activity and stimulating new areas of investment, helping to prevent the diversion of substantial working capital to compensation and helping to ensure continuity of the production cycle.

The State Insurance Organisation of Turkmenistan (Turkmengosstrah) has an extensive network in the country of more than 40 offices. At this stage, the organisation is expanding partnerships with leading international insurance and reinsurance companies and insurance brokers.