Investing an insurance broker’s own capital: amendments to the Law “On Insurance Activity”
15 November 2026 Reading: 7 min Views: 5
The Association proposes allowing insurance brokers to invest their own capital not only in deposits but also in securities, within the list and limits set by the authorised body. Client money remains off-limits and is held in a separate account.
The Association of Insurance Agents and Brokers has put forward an initiative to amend the Law “On Insurance Activity”: to allow an insurance broker to invest its own capital not only in bank deposits but also in securities — government and corporate bonds, shares and other financial instruments — within the list and limits to be set by the authorised body. Client money would remain under a complete ban.
1. What the law allows today
An insurance broker is prohibited from carrying out investment activity involving the placement of insurance premiums and insurance payouts received from a policyholder (cedent) or an insurer (reinsurer). A broker may place its own funds only in deposits with banks of the Republic of Kazakhstan and branches of non-resident banks (Article 17(4) of the Law “On Insurance Activity”). The minimum amounts of a broker’s authorised capital and own capital are set by the authorised body, and authorised capital may be paid up in cash only (Article 16-3).
The first part of the rule is sound: a broker must not invest client money anywhere. The second part puts the broker’s own capital on the same footing, even though this is the money of its shareholders, and confines it to a single instrument — a deposit.
2. Why a deposit is not enough
An insurance broker is not a party to the insurance contract (Article 17(5)) and bears no insurance risk: it does not form insurance reserves and is not liable for payouts. Its capital is the business’s safety margin, not cover for obligations to policyholders. Nevertheless, the law holds it within tighter limits than the assets of insurance companies, which invest their funds in financial instruments subject to prudential standards, including asset diversification standards (Article 46(2)).
As a result, a broker’s capital sits on deposit for years and does not work for development: IT systems, claims settlement, a regional network and participation in pool management. A broker’s shareholders cannot build a normal financial policy: spreading funds across reliable instruments of different maturities and yields, keeping a liquid reserve in government bonds and the long-term portion in shares and bonds of reliable issuers.
3. What the Association proposes
The Association proposes separating two different kinds of money in Article 17(4): client funds and the broker’s own capital. For client funds, the complete ban is retained and a requirement to hold them in a separate bank account is added. The broker would be entitled to invest its own capital in financial instruments within the list and limits approved by the authorised body.
4. Which restrictions remain
These rules protect a broker’s clients better than today: client money is not only barred from investment but must also be held separately from the broker’s own funds. The regulator, in turn, gains a control tool — a list of permitted instruments, single-issuer limits and reporting on the composition of investments.
5. What this gives the market
Conclusion
Article 17(4) rightly prohibits a broker from investing client money, but at the same time locks its own capital in a bank deposit. The amendments proposed by the Association separate own capital from client funds, allow it to be invested in securities within the list and limits of the authorised body, and introduce a separate account for client money. Brokers gain the ability to manage their capital like any ordinary business, and clients gain additional protection.
Legal framework: Law of the Republic of Kazakhstan No. 126-II “On Insurance Activity” of 18 December 2000 — Article 16-3, Article 17(4) and (5), Article 46(2). Law as amended on 15 November 2026.
