At present, the National Bank has developed a draft Law "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Insurance and Insurance Activities". The initial discussion was already held at the site of NCE, following the results, the main market problems have been compiled regarding the implementation of insurance in the field of tourism and amendments, envisaged by the draft law. We provide explanations for the National Bank of Kazakhstan on these issues. What is the deadline for submission of the bill for consideration of the Government and Parliament of the Republic of Kazakhstan? What is the expected timeframe for the entry into force of the changes? In accordance with the Decree of the President of the Republic of Kazakhstan dated by 6^th of September 2016 No. 314 "On approval of the Conceptual Plan for Legislative Work for 2016-2021 (the sixth convocation of the Parliament of the Republic of Kazakhstan) ", the term for the introduction of the draft law for consideration by the Parliament of the Republic of Kazakhstan is the second half of 2017. According to the Decree of the Government of the Republic of Kazakhstan No. 905 dated by 29^th of December 2016 "On the Plan of Legislative Work of the Government of the Republic of Kazakhstan for 2017", the term for the draft law to be submitted to the Ministry of Justice of the Republic of Kazakhstan – is May 2017, the Government of the Republic of Kazakhstan – is July 2017, the Parliament of Kazakhstan - September 2017. The Draft Law is subject to agreement with professional participants of the insurance and tourism markets at the sites of the Atameken, the Association of Financiers of Kazakhstan, the interested state bodies, and the submission to the Government and the Parliament of the Republic of Kazakhstan.

The NB RK notes that subparagraph 1) of paragraph 3 of Article 42 of the Law of the Republic of Kazakhstan "On Legal Acts" establishes that legislative acts of the Republic of Kazakhstan shall be put into effect ten calendar days after the day of their first official publication if other terms are not specified in the acts or acts on their introduction. What should the tour operator's or travel agent's company do if the term of the insurance contract for GPU ends? Is it advisable to conclude a new agreement, taking into account the forthcoming change in legislation? Sub-clause 4 of Article 27 of the Law of the Republic of Kazakhstan "On Tourism Activities in the Republic of Kazakhstan" (hereinafter - the Law on Tourism Activities) regulates that a tour operator and travel agent are obliged to insure civil liability arising from concluded agreements for rendering tourist services. According to Clause 1 of Article 6 and Article 7 of the Law of the Republic of Kazakhstan "On Compulsory Insurance of Civil Liability of a Tour Operator or Travel Agent" (hereinafter - the civil liability Law of a Tour Operator or a Travel Agent), the tour operator or travel agent, who is responsible for provision of tourist services is subject to compulsory insurance. Tour operator and travel agent is not entitled to carry out activities to provide tourist services without concluding a contract of compulsory insurance of liability of a tour operator or travel agent. Thus, in accordance with the requirements of the current legislation of the Republic of Kazakhstan, a travel agent who continues to carry out activities to provide tourist services is required to conclude an obligatory insurance contract for travel agent's civil liability. In the event that the company enters into a new insurance contract for a one-year period, and within a year the new law is amended, this agreement will become void. Can the company expect to receive a part of the insurance premium paid under the agreement? Paragraph 2 of Article 9 of the Law on the civil liability of a tour operator or travel agent regulates that the contract of obligatory liability insurance of a tour operator or travel agent is concluded for a period of twelve months from the date of its entry into force.

The validity period of the insurance coverage coincides with the validity period of the compulsory liability insurance contract of a tour operator or a travel agent. In accordance with subparagraph 5) of paragraph 1 of Article 12 of the Law of the civil liability of a tour operator of a tour agent, the policyholder has the right to terminate ahead of schedule the contract of mandatory liability insurance of a tour operator or a travel agent. According to Clause 1 of Article 11 of the Law on civil liability of a tour operator or a travel agent, the contract of compulsory insurance of the liability of the tour operator or travel agent is terminated early in cases stipulated by the Civil Code of the Republic of Kazakhstan (hereinafter - the Civil Code of the Republic of Kazakhstan). Subparagraphs 1) and 5) of clause 1 of Article 841 of the Civil Code of the Republic of Kazakhstan established that in addition to the general grounds for termination of obligations provided for by this Code, the insurance contract is terminated early in cases when the insurance object ceased to exist, the possibility of the occurrence of an insured event has ceased and the existence of an insurance risk has ceased due to circumstances different from an insurance event. In these cases, the contract is considered to be terminated from the moment of occurrence of the circumstance provided for as a ground for termination of the contract, which the interested party must immediately notify the other. The amendments to the Law on civil liability a tour operator or a travel agent stipulate: to foresee a civil liability of not a tour operator or a travel agent, but the tourist traveling abroad and his property interests; Implementation by the tour operator (insurant) of compulsory insurance of a tourist (insured) traveling abroad, according to one of several compulsory insurance programs, depending on the intended country of travel and the time of travel. According to the second part of clause 2 of article 11 of the law on civil liability of a tour operator or travel agent in cases of early termination of the contract of compulsory insurance of the liability of the tour operator or travel agent for circumstances specified by the Civil Code of the Republic of Kazakhstan, the insurer is entitled to a portion of the insurance premium in proportion to the time during which the insurance was in effect. Taking into account the above, in the event of legal grounds for early termination of the contract of compulsory insurance of liability of a tour operator or a travel agent, we believe that the insured can realize the right to early termination of the contract and return a portion of the previously paid insurance premium. Will the new law protect the rights of tourists and travel agents if their obligations are not fulfilled by the tour operator? What will be the mechanism of compensation for damage to the tourist? For example, in the situation with LLP "Gulnar-Tour" tourists sued the travel agents, since agreements on tourist services were concluded with the travel agents. The court made a decision to compensate the travel agent for the damage and on the basis of this decision and the documents provided by the tourist, the travel agencies could apply to the insurance company for receiving the insurance payment. What is envisaged in this situation by a new bill? According to part one of clause 1 of Article 839 of the Civil Code of the Republic of Kazakhstan, the insurer is entitled to fully or partially refuse to insure the insurer in the insurance payment if the insured event occurred as a result of: 1) deliberate actions of the insured and (or) beneficiary, aimed at the occurrence of an insured event or contributing to its occurrence, excluding actions committed in the state of necessary defense and extreme necessity; 2) the actions of the insured and (or) the beneficiary, recognized in accordance with the procedure established by the legislative acts of the Republic of Kazakhstan, as intentional criminal or administrative offenses that are in causal connection with the insured event. Thus, the insurance of the tour operator does not cover the costs of the insured if the insured event occurred due to the willful actions of either party to the contract for tourist services. In accordance with paragraphs 1 and 5 of Article 17 of the Law on Tourism, the rendering of tourist services is carried out on the basis of a contract. The contract for tourist services is written, except for contracts concluded by a guide (guide-interpreter) and guide, and must comply with the legislation of the Republic of Kazakhstan. Essential conditions of the contract for tourist services are established by a standard agreement approved by the Government of the Republic of Kazakhstan. Paragraph 1 of Article 18 of the Law on Tourism Activity regulates that compensation for losses and moral harm to tourists is made in accordance with the legislation of the Republic of Kazakhstan (Articles 951 and 952 of the Civil Code of the Republic of Kazakhstan). In accordance with Paragraph 12 of Article 17 of the Law on Tourism Activities in case of non-compliance with the terms of the agreement upon arrival in another country or along the route, the person conducting tourist activities is responsible for improper performance of the terms of the contract. According to subparagraph 1) of paragraph 19 of the model contract for tourist services, approved by the order of the Minister of Investment and Development of the Republic of Kazakhstan of 30.01.2015, No. 81, the executor is obliged to provide services under the Contract in a proper manner, qualitatively and on time. In accordance with clause 22 of the model agreement, in case of a discrepancy between the quality and (or) the volume of tourist services to the terms of the Agreement upon arrival in another country or along the route, the responsibility for improper performance of the terms of the Agreement is borne by the tourist operator that formed the tourist product, which has been sold. Parts of the second, third and fourth clause of Article 15 of the Law on Tourism Activities establishes that a travel agent promotes and sells tourists only a tourist product, formed by a tour operator established in accordance with the legislation of the Republic of Kazakhstan. Promotion and realization of tourist product by a travel agent is carried out on the basis of an agency contract for the sale of a tourist product concluded with a tour operator in writing. An agency contract for the sale of a tourist product between a tour operator and a travel agent must contain information about the tour operator that formed the tourist product, the contracts of compulsory insurance of civil liability of a tour operator and travel agent, the responsibility of the tour operator and travel agent, as well as the responsibility of each party to the tourist for failure to provide or provision of inaccurate information about the tourist product, for failure to perform or improper performance of obligations under the contract for the sale of tourist products, description of the tourist route, reliable information about the tourist product. Taking into account the above, the rights and obligations of each party (tourist, travel agent, tour operator) are settled within the framework of contractual relations in accordance with the current legislation of the Republic of Kazakhstan. At the same time, since October 2016, the system of guaranteeing the rights of citizens in the Republic of Kazakhstan in the field of outbound tourism (hereinafter referred to as the System) has been introduced and is functioning in the Republic of Kazakhstan, which includes: 1) export from the territory of the country of temporary stay on the territory of the Republic of Kazakhstan by air transport , railway, road or water transport; 2) provision of accommodation in the hotel and catering services for a period before the commencement of export to the territory of the Republic of Kazakhstan; 3) delivery from the location in the country of temporary stay to the point of export to the territory of the Republic of Kazakhstan. Part of the obligations of the tour operator or tour operator-charterer for the failure or improper performance of the terms of the contract for tourist services is vested in the administrator of the System, which makes it necessary to further improve the functioning of the system in terms of: expanding the scope of guaranteeing the rights of citizens of the Republic of Kazakhstan, who were meant to travel to the territory of the country of temporary residence due to the failure or inadequate performance of the terms of the contract for tourist services by a tour operator or a tour operator-charterer; revision of the sums of money to be secured by a bank guarantee for tour operators and tour operators charterers, engaged in outbound tourism activities, depending on the type of transport used for the transportation of departing tourists (air, rail, road, water) and the volume of sales of tourist products per year. The analysis of the current situation showed a number of problems hampering the development of insurance in the tourist area, among which there is a lack of a list of insurance risks faced by a tourist when traveling abroad and which should be covered by insurance organizations, the interest of tourist organizations in avoiding an insurance event and preventing risks, duplication of the mechanisms of the System And insurance. In addition, at present compulsory insurance of a tour operator or travel agent in the existing form does not correspond to the interests of tourists. In accordance with the amendments to the Law on civil liability of a tour operator or a travel agent, each of the programs of compulsory insurance of tourists includes the main insurance events that a tourist traveling abroad may encounter, including an accident, illness, death of a tourist, cancellation of a trip / early return, delay of an international flight , the onset of civil liability of a tourist abroad and other, and also provides for different limits of the liability of the insurer depending on the country of temporary residence. Requirements for insurance payment to the insurer may be presented both by the insured and by the tourist, with the application of the documents necessary for the implementation of the insurance payment. Information on the terms of insurance coverage for insurance risks taken for insurance, contact information of the insurer, the company's assistance and other necessary information will be reflected in the insurance certificate issued to the tourist in support of the existence of an effective insurance cover. At present, the draft Law is at the stage of coordination with the interested state bodies.