OREANDA-NEWS. August 17, 2011. IBC took part in a round table to discuss the Law "On compulsory insurance of employer's liability for damage to life and health of employees in the performance of labor (service) duties." Representatives from government agencies, public supervisory boards and the business community participated in the debates. AS a result, businesspeople proposed to suspend the law. The meeting was held at the Ministry of Economic Regulation of the Kyrgyz Republic, reported the press-centre of IBC.

The Law on mandatory insurance of employer's liability was adopted on August 4, 2008 and came into force on December 12, 2009. In a single package with this law also three laws on compulsory insurance of civil liability of vehicle owners, as well as carrier liability to passengers and carriers of dangerous goods came into force.

According to business associations, the problem lies in the lack of unified and economically sound policy to ensure that the rights of workers are protected and employers fulfill their obligations.

At present, insurance companies try to lure attractive employers from large businesses as they comply with safety and insurance claims are not happening, which means that insurance companies make more profit. However, small businesses often violate safety conditions due to the limited funds.

Moreover, legal relations do not encourage employers to create better conditions of work. Insurers do not have incentive for competition, which is possible only if there is freedom of contracts, namely, voluntary insurance. Insurance companies will try to attract insurants with positive results, explained Gulnara Akhmatova, Senior Lawyer of the International Business Council. A serious drawback of the law is an unjustified exclusion of numerous employees of public institutions - doctors, teachers and other state employees. Meanwhile, according to the Law of the Kyrgyz Republic "On Civil Service" state employees are subject to compulsory state insurance.

According to the law on compulsory insurance, the contract is concluded for one year. If during this period there is no insurance cases the funds remain in the insurance company. Employers do not understand why they should throw their money away, commented Akhmatova.

Today only insurance companies benefit from the implementation of the law on compulsory insurance, believes Akhmatova. The main drawback of the law is that it does not meet the interests of entrepreneurs, because there is no mechanism to regulate relations between employers and insurance companies. The law is selective and has no right to exist, because it takes into account only the interests of one group of people, concluded Akhmatova.

Participants to the meeting confirmed that voluntary insurance is competitive and offers benefits and advantages. For example, in Russia, companies receive 20 percent of insurance premiums back for the prevention of safety and working conditions.

The Antitrust Agency offered the Service of the state regulation and supervision of the financial market to create a state insurance company so that employers could have the right to choose. In addition, insurance companies should be deprived of right to develop their own insurance rules. To do this, it is necessary to change the law on insurance and make amendments that provide for the establishment of such a company.

It was also recommended to conduct a PR-action aimed at informing both the public and employers on compulsory insurance. Fourteen private insurance companies operate In Kyrgyzstan, and five of which have foreign capital.

Current insurance regulations are ineffective because most businesses are not subject to the laws on insurance.

The meeting participants decided that the law on compulsory insurance is contrary to the labor laws of the country, and it violates the constitutional principle of equality of rights and duties of citizens. It was suggested to suspend the law and develop a draft concept of compulsory insurance which will be harmonized with labor and social legislation. The participants also recommended to discuss the draft concept by civil society and the broader community of entrepreneurs.