Tajik insurance and reinsurance companies are obligated to comply with the revised minimum capital requirements until April 1, 2021.
A reinsurer is a company that provides financial protection to insurance companies. Reinsurers handle risks that are too large for insurance companies to handle on their own and make it possible for insurers to obtain more business than they would otherwise be able to.
The reinsurer may be either a specialist reinsurance company, which only undertakes reinsurance business, or another insurance company. Insurance companies that accept reinsurance refer to the business as 'assumed reinsurance'.
By government’s decree issued on March 31, 2020 minimum capital requirements for insurance and reinsurance companies in Tajikistan were revised upwards. The companies were given a year to comply with the revised minimum capital requirements.
Thus, the government revised minimum capital requirements for state-run insurance companies and private companies offering compulsory insurance along with other forms of insurance upwards to 10 million somonis, for private companies offering only general insurance and life insurance upwards to 5 million somonis, for private companies offering only general insurance upwards to 2 million somonis, and for state-run and private reinsurance companies upwards to 50 million somonis.
Current minimum capital requirements, which have been in effect since 2011, are 5 million somonis for state-run insurance companies and 500,000 somonis for private insurers.
Current minimum requirements for reinsurance companies are 40 million somonis.
Meanwhile, the National bank of Tajikistan (NBT) noted in early December that total assets and obligations of Tajik insurance companies have decreased.
Total assets of Tajik insurance companies reportedly dropped 3.4 percent (14.6 million somonis) in a year to September 30, 2020 and now amount to 417.3 million somonis (equivalent to some 40 million U.S. dollars).
Meanwhile, total obligations of Tajik insurance companies dropped 20 percent (50.3 million somonis) in a year to September 30, 2020 and now amount to 201.4 million somonis.
18 insurers now operate in Tajikistan insurance market, including two state-run insurance companies (Tojiksughurta – 5.2 million somonis and Tojiksarmoyaguzor – 15.6 million somonis), 15 non-state insurers and one mutual insurance support center.
The most active private insurers are Spitamen-Sughurta (87.7 million somonis) and MUIN (2.4 million somonis).
Among the prevailing classes in the market it is worth noting property insurance, personal insurance, liability insurance and life insurance.
In February 2019, the National Bank of Tajikistan announced the creation of the National Association of Insurance Companies, which aims to support the development of insurance activity in the country. The Association reportedly sustains insurance market development and competition, as well as protects the rights of all insured objects.
