A draft presidential decree, submitted for public discussion, sets out a comprehensive program for reforming Uzbekistan’s insurance market through 2030. The draft introduces new mandatory insurance requirements for legal entities and individual entrepreneurs, caps commission fees paid to insurance agents, establishes a tax cashback mechanism for insurance premiums, and shifts industry oversight to an automated regime operated through the information systems of the National Agency for Prospective Projects (NAPP) and the Tax Committee.
Introduction of “Imputed” Insurance
The concept of “imputed insurance” refers to an obligation imposed on specific categories of entities to insure their civil liability when engaging in activities associated with a heightened risk of harm to the life, health, or property of individuals or legal entities. This is a model new to Uzbekistan, combining elements of mandatory and voluntary insurance: the state requires businesses to insure their liability, while the insurance contract itself is concluded between the parties on voluntary terms. The Cabinet of Ministers will be responsible for maintaining the registry of imputed insurance types, including procedures, rules, and the rights and obligations of the parties.
Automatic Penalties Without Inspectors
Starting January 1, 2027, the Unified National Labor System, using data from the NAPP information system, will automatically detect employers lacking a mandatory insurance policy and issue a warning. If the employer fails to obtain a policy within three days, an administrative penalty will be imposed automatically — without drawing up a formal report and without the offender’s personal involvement — and access to the employer’s personal account will be restricted. A similar automated detection mechanism is planned for transport carriers through the my.soliq.uz system. Tax authorities will be granted the right to impose fines for violations in the field of mandatory insurance based on data from this system. Furthermore, starting January 1, 2027, employers and carriers who fail to fulfill this obligation will be excluded from the business sustainability rating.
Mandatory Disaster Insurance for Real Estate
The state plans to introduce mandatory insurance for residential and commercial property against natural disasters. A dedicated fund will be established for this purpose, modeled on Turkey’s DASK, without forming a separate legal entity. Notaries will be barred from processing sale or lease transactions without a valid insurance policy. The insured amount will be determined based on the property’s area and replacement cost, subject to maximum limits and standard norms.
Credit Insurance Requirements
Starting October 1, 2026, to strengthen consumer protection and insurer solvency, the following rules are proposed:
- business risk insurance will cover only the unsecured portion of a loan, not exceeding 50% of the total loan amount;
- for microloans issued to individuals, a life insurance policy issued by an insurer licensed under Class V (life insurance to secure obligations) will be accepted as collateral.
New Requirements for Insurance Companies
The draft provides for the introduction of a dedicated escrow account to track and control the intended use of insurance premiums. Starting January 1, 2027, the following restrictions will apply:
- agent commissions on all types of mandatory insurance will be capped at 5%;
- at least 10% of each reinsurance contract must be transferred to reinsurance organizations established by the authorized state body;
- all reinsurance contracts must be registered exclusively through the NAPP system, failing which they will be deemed invalid.
Tax Cashback
Citizens entering into long-term life insurance contracts will be eligible to receive a cashback of the premiums paid, funded through personal income tax already withheld, 13 months after the premium payment date.
Expanded Powers of NAPP
The National Agency for Prospective Projects, as the industry regulator, will be granted the right to collect and process data constituting banking secrecy of insurance market participants, through integration of the Agency’s systems with those of the Central Bank; to conduct inspections of insurers and brokers without prior approval from or notification to state bodies, based on risk assessments and complaints received; and to refer cases to law enforcement authorities regarding the unlawful understatement of insurance reserves, misuse of assets, payouts on fraudulent claims, and asset stripping.
Digitalization and Artificial Intelligence
The draft envisions the launch of AI-powered chatbots, the deployment of AI modules for contract review, and the development of an electronic document management module for concluding, amending, and terminating insurance contracts online, with electronic documents to be given the same legal standing as paper documents.
