AKIPRESS.COM - Standard & Poor's Ratings Services said on April 3 that it had kept its 'B+' long-term counterparty credit and insurer financial strength ratings and 'kzBBB-' Kazakhstan national-scale rating on Insurance Co. Kazkommerts-Policy JSC on CreditWatch, where they were placed with negative implications on Oct. 20, 2014.

The CreditWatch placement reflected the similar rating action on Kazkommerts-Policy's parent, Kazkommertsbank JSC (KKB). Kazakhstan-based KKB acquired 46.5% of JSC BTA Bank in 2014 and obtained operational control. KKB subsequently executed a share buyback, which weakened its capitalization on a consolidated basis.

"We continue to consider Kazkommerts-Policy to be a strategically important subsidiary of KKB. We do not, however, add any support to the rating on Kazkommerts-Policy because the insurer's 'b+' stand-alone credit profile is higher than KKB's 'b' group credit profile. We consider the insurance company to be insulated from KKB and, therefore, able to be rated higher than its parent. This is because the regulatory framework provides some protection for the insurer in the event of adverse intervention from its parent. The regulatory framework also includes constant oversight from the National Bank of the Republic of Kazakhstan. Following the expected merger of BTA Insurance with Kazkommerts-Policy, we could reassess the company's status as an insulated insurance subsidiary," said the ratings service.

"We consider that the long-term counterparty credit and insurer financial strength ratings should be limited to one notch above the long-term ratings on the parent," said S&P.