Compulsory Environmental Insurance for Legal Entities

The Law of the Republic of Kazakhstan “On Compulsory Environmental Insurance” was enacted on January 1, 2006.

This Law governs the public relationships arising in the field of compulsory environmental insurance and establishes legal, economic and organizational framework for this type of insurance.

Insurable Object

The object of compulsory environment insurance is the property interest of a person who performs environmentally hazardous types of economic and other activities as related to his obligation under the civil laws of the Republic of Kazakhstan to reimburse for any damage caused to life, health, property of any third parties and/or the environment as a result of accidental environmental pollution.

The list of environmentally hazardous economic and other activities shall be as determined by the Government of the Republic of Kazakhstan.

No persons engaged in environmentally hazardous types of economic and other activities shall be allowed to perform their activities without concluding a compulsory environmental insurance agreement.

In case there is more than one owner of the facility engaged in environmentally hazardous economic and other activities, any of such owners shall execute a compulsory environmental insurance agreement, and the respective insurance policy shall include all owners of such facility as the assureds.

Term of Agreement

A compulsory environmental insurance agreement shall be effective for twelve (12) months after it is signed.

The Sum Insured

In case the Insured has entered into a compulsory environmental insurance agreement as the owner of the facility that may cause damage to any third parties, the compulsory environmental insurance agreement shall have effect only to the extent of insurance of the civil liability for damage to the environment.

The sum insured shall be as agreed upon by the parties in the compulsory environmental insurance agreement with the insured sum of not less than:

• 65,000 times the monthly calculation index as determined by the Law on State Revenue for the relevant fiscal year as of the date of the compulsory environmental insurance agreement executed with the legal entity;
• 17,000 times the monthly calculation index as determined by the Law on State Revenue for the relevant fiscal year as of the date of the compulsory environmental insurance agreement, if the compulsory environmental insurance agreement was effected only to the extent of civil liability insurance for damage to the environment.

Insurance Rate

0.76 to 2.65 per cent of the sum insured (first case)
0.59 to 2.05 per cent of the sum insured (second case)

Term of Agreement

Any compulsory environmental insurance agreement shall be effective for twelve (12) months after it is signed.