20 January 2020Analysis

Kazakhstan Energy Reinsurance Company leaves Bermuda to set up closer to home

The Astana Financial Services Authority (AFSA) has issued a license to the Kazakhstan Energy Reinsurance Company (KERC) to operate as a captive insurance company in Kazakhstan.

According to Kazakhstani rules captive insurance business involves effecting or carrying out contracts of insurance exclusively for its parent group. KERC is an affiliated company of JSC NC KazMunayGas. It will continue to have all the property, rights and privileges, and be subject to all the liabilities, restrictions and debts that it had before it relocated.

KERC was previously domiciled in Bermuda, where it had been operating since 2004. Its re-domiciliation to the AIFC allowed it to transfer all legal rights and liabilities to the new entity, which is the same legal person as the originally overseas-incorporated company.

Aigul Beknazarova, JSC NC KazMunayGas’ managing director and financial controller, said the AIFC opened new opportunities for large companies conducting international business. “We took advantage of the opportunity to transfer of company incorporation to the AIFC jurisdiction for the first time. We hope that the AIFC will continue to be a flexible and convenient platform for business,” she added.

AIFC is keen to attract capital and assets to Kazakhstan from foreign jurisdictions. Mukhtar Bubeyev, its acting chief executive officer, said KERC’s decision to relocate to Kazakhstan demonstrated the quality of its regulatory regime. “The transfer of incorporation of the Kazakhstan Energy Reinsurance Company to the AIFC gives a clear message that the legal framework of the AIFC supports Kazakhstani companies willing to relocate operations and assets to Kazakhstan through the AIFC.” he said.