International Business Council Demands Cancellation of National Reinsurer Project

Марина Онегина • 26.01.2026, 16:35 • Economy

The International Business Council (IBC) of Kyrgyzstan criticized the government's initiative regarding the resolution "On Approving the Regulation on the National Reinsurance Operator," under which the State Insurance Organization (SIO) is planned to be made the sole national reinsurer.

According to the proposed project:

SIO will be appointed as the national reinsurance operator;
insurance companies will be required to transfer at least 10% of their risks to SIO for reinsurance, with a subsequent increase of this share to 50% annually;
all risks that will be transferred to the Eurasian Reinsurance Company (ERC) must go through SIO;
a new provision on the national operator is also introduced, defining its legal and organizational aspects.

As stated in the justification note, in 2024 domestic insurance companies sent 85% of risks abroad, which corresponds to 1.27 billion soms. A meeting on this issue has already taken place at the State Financial Supervision, where the positions of various participants were discussed.

In its official remarks, the IBC emphasizes that the project creates quasi-monopolistic conditions with a mandatory "right of first refusal," centralized underwriting, and administrative control.

The organization notes: "This replaces market mechanisms for risk management with bureaucratic processes, increases regulatory risks, and creates dependence of the entire insurance sector on a single state operator."

Main remarks of the IBC:

Failure to achieve goals

The project does not contribute to reducing the outflow of premiums abroad — the NRO will only act as an intermediary for placing risks in international markets. Private insurers already have direct connections with foreign reinsurers.

Systemic threats

Concentrating all reinsurance operations in one place makes the market vulnerable to failures of the NRO. Delays or refusals could severely disrupt insurance coverage in sectors such as energy, transport, mining, aviation, and foreign trade, jeopardizing the economic security of the country.

Conflict of interest

SIO, which conducts both direct insurance and reinsurance, gains access to confidential information about competitors (rates, portfolios), violating the principles of fair competition.

Quasi-supervisory powers

The NRO will be authorized to request any documents and receive monthly detailed reports, effectively turning it into a supervisory body, undermining the principle of equal conditions for all participants.

Threat to fronting and obligatory contracts

The mandatory offering of risks by the NRO makes it impossible to fulfill international fronting contracts and existing obligations with foreign reinsurers.

Unrealistic deadlines

Five working days for risk review significantly exceeds international standards, which could block major projects and deter potential investors.

The IBC emphasizes that this model is borrowed from countries under sanctions (Russia, Belarus), where access to global markets is limited. Kyrgyzstan does not face such restrictions, therefore this project is considered impractical and potentially harmful.

The Council concludes: "The project does not solve the stated tasks, creates systemic risks, undermines the competitive environment, and threatens economic security. We propose to exclude the document from discussion and revise the presidential decree so that it meets the real needs of the insurance market. The development of national reinsurance capacity is impossible through administrative centralization and monopolization; it must be based on market mechanisms, a competitive environment, trust among participants, and predictable regulation, which is a key condition for the sustainable development of the insurance market and the economy of Kyrgyzstan as a whole," the IBC stated.

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