Can an insurance agent use the words “insurance” and “reinsurance” in its name and trademark?

The name is the first thing a client sees. From the signboard, website, advertising and logo, the client decides whom they are dealing with and who will be liable under the contract. That is why the law specifically regulates who may call themselves “insurance”. An insurance agent may not: the agent does not insure anyone itself, but acts on behalf of and on the instructions of an insurance company. Below we examine what exactly is prohibited, who is permitted to use these words, why the prohibition also extends to trademarks, and how to name an agency correctly.

1. What the law says

The rule is set out in Article 14 of the Law of the Republic of Kazakhstan “On Insurance Activity” — “Prohibition of unlicensed activity”. No person that does not hold the relevant licence of the authorised body may:

• carry on insurance or reinsurance activity in its own name or provide the services of an insurance broker (subparagraph 1) of paragraph 1);
• use, in any language, in its name, documents, announcements and advertising the words “insurance” («страхование» / «сақтандыру»), “reinsurance” («перестрахование» / «қайта сақтандыру»), “insurance company” («страховая организация»), “reinsurance company” («перестраховочная организация»), “insurance broker” («страховой брокер») or words (expressions) derived from them implying that it carries out insurance or reinsurance operations in its own name or acts as an insurance broker (subparagraph 2) of paragraph 1).

Paragraph 2 of the same Article adds a general rule: carrying on insurance activity without a licence of the authorised body is prohibited (the exception being mutual insurance societies). In other words, no person in Kazakhstan may insure in its own right without a licence, and it follows that no one without a licence may create the impression in a client’s mind that it is the one providing the insurance.

A separate note on the abbreviation “Re”

The prohibition also covers the abbreviation “Re”. In insurance it is generally understood to mean Reinsurance: this is precisely how reinsurance companies designate themselves worldwide, and a client who sees “Re” in a name or mark understands it as an indication of reinsurance activity. “Re” is therefore a “derived expression” from the word “reinsurance” in English, and the law prohibits such expressions “in any language”. An insurance agent may not use “Re” in its name, trademark, documents or advertising — whether on its own or as part of a name (“… Re”, “Re…”, “… Re Group”).

2. Why the prohibition applies to insurance agents

An insurance agent does not hold, and need not hold, a licence for insurance activity: it is an intermediary. Its powers are determined by the agency agreement (contract of mandate) with the insurance company (paragraph 1 of Article 18 of the Law), and it acts on behalf of and on the instructions of the insurer — one insurance company in the “life insurance” branch and/or one in the “general insurance” branch (subparagraph 1) of paragraph 1 of Article 18-2). The insurance contract is concluded and performed by the insurer, the insurance payment is made by the insurer, and it is the insurer that is liable to the client.

The law requires the agent to disclose this to the client expressly. The agent must present to the policyholder the agency agreement, an identity document and a document confirming that its details are entered in the register of insurance agents, and must also provide information on the insurance company whose agent it is, including a copy of that company’s licence (subparagraphs 1) and 2) of paragraph 2 of Article 18-2).

A name such as “… Insurance” — whether in Russian («… Страхование») or in English — tells the client the opposite: that they are dealing with the insurer itself. These are precisely the “derived words (expressions) implying that the person carries out insurance operations in its own name” which subparagraph 2) of paragraph 1 of Article 14 prohibits for a person without a licence. For more on the legal regime under which an agent operates, see the article “The Legal Regime of an Insurance Agent’s Activity”.

3. The position of the Agency for Regulation and Development of the Financial Market

The Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market supports this provision of the law. An insurance agent may not use in its name the words “insurance”, “reinsurance” or words derived from them: such a name implies that the person itself carries on insurance activity, although the agent holds no licence for it. The regulator applies the same approach to trademarks: a mark containing “insurance” words misleads the consumer as to the person providing the service — the client perceives the agent as the insurer.

The logic of this position is simple: insurance activity is licensed precisely so that the client can be confident of the financial soundness of, and supervision over, whoever assumes the risk. If an intermediary calls itself “insurance”, the client is deprived of that clarity even before the contract is concluded.

4. Who may use them: licensees and the insurance agent

The prohibition in Article 14 is addressed to persons without a licence. It follows that those who do hold a licence are entitled to use the “insurance” words. The words “insurance” and “reinsurance” and the abbreviation “Re” may be used in their names by insurance (reinsurance) companies and insurance brokers: both are licensed participants in the insurance market, their activity is authorised and supervised by the Agency for Regulation and Development of the Financial Market, and such a name therefore does not deceive the client.

An insurance agent holds no licence, but neither is it obliged to conceal what it does. An agent may designate itself by the phrase “insurance agent”, including in advertising: the phrase states its status directly — an intermediary acting on behalf of the insurer — and is therefore not misleading. The agent may never use the word “insurance” in its own name. In advertising it may do so only where this is permitted by the agency agreement with the insurance company: in that case it speaks of insurance on behalf of the insurer and within the scope of its mandate, not in its own name.

5. Trademarks: the same prohibition, under a different law

Agencies often try to circumvent the requirement as to the name of a legal entity: they register an LLP with a neutral name, but on the signboard, the website and in advertising they use a trademark containing the word “insurance”, in Russian or as “Insurance”. This does not work, for three reasons.

First, the prohibition in Article 14 of the Law “On Insurance Activity” covers not only the name but also documents, announcements and advertising. A trademark is used precisely in advertising, on signboards and in documents — so the rule extends to it as well, regardless of whether the mark is registered.

Second, the Law of the Republic of Kazakhstan “On Trademarks, Service Marks, Geographical Indications and Appellations of Origin” (the Trademark Law) does not permit the registration, as trademarks or elements thereof, of designations that are false or liable to mislead as to the goods or their manufacturer, or as to the service or the person providing the service (subparagraph 1) of paragraph 3 of Article 6). An insurance agent’s “… Insurance” mark is misleading precisely as to the person providing the service: the insurance service is provided by the insurer, not by the agent.

Third, even a registered mark is not protected: a registration made in breach of Article 6 may be challenged and declared invalid in whole or in part throughout its entire term of validity, and any interested person may file an objection (paragraph 1 of Article 23 of the same Law).

6. Getting it right: examples

The prohibition does not prevent an agent from being visible and recognisable. It requires only one thing — that the name does not present the intermediary as the insurer, and that the client can see at once on whose behalf the contract is being concluded.

7. Checklist for insurance agents

A correct name is not a formality. It protects the client against choosing the wrong counterparty, and the agent against disputes over who promised the insurance payment. An agent that openly names the insurer on whose behalf it acts looks more reliable than one that passes itself off as an insurance company. For what an agent is liable for to the client and the insurer, see the article “Liability of an Insurance Agent”.