American Journal of Business Management, Economics and Banking ISSN (E): 2832-8078 Volume 27, | August - 2024 P a g e | 22 www.americanjournal.org DEVELOPMENT PROSPECTS OF SECURITY ACTIVITY IN UZBEKISTAN Kenjayev Ilhom Giyozovich Doctor of Philosophy (PhD) in Economics, Associate Professor of the Department “Insurance and Pension” Tashkent State University of Economics E-mail: kenjayevi1982@mail.ru Ganiyev Shahriddin Vokhidovich Professor of ISFT Institute E-mail: ganiyev_sh@mail.ru A B S T R A C T K E Y W O R D S This article tried to research the development of insurance activity in the Republic of Uzbekistan during the years of independence, dividing it into stages based on certain criteria. The main focus is on the analysis of the adopted legislative documents and statistical data on the development and regulation of insurance activities. Also, the article comments on the achievements and shortcomings in the reform and development of insurance activities over the past 30 years. Insurance, insurance activity, insurance companies, voluntary insurance, compulsory insurance, insurance premium, insurance payments, insurance control. Introduction It is known that after Uzbekistan gained its independence, insurance activities in our country were carried out by the so-called "Gosstrax" state insurance bodies for almost 70 years. In 1991, the implementation of large-scale reforms related to the transition from a planned economy to an economy based on market relations, the creation of a private ownership and competitive environment in society, the creation of legal conditions for the development of entrepreneurial activities, undoubtedly required a fundamental revision of insurance activities. Analyzing the situation in the insurance sector in the years after the independence of our country, we can see that this sector has traveled a difficult and at the same time honorable path from its beginning. Within the framework of a proper article, there is a limited opportunity to systematically study the reforms and changes, achievements and shortcomings of the insurance industry over 30 years. However, it is not without benefits to know the past and make conclusions when determining the directions of future development of insurance activity, making decisions that are important for the development of the industry. At this point, it should be noted that the stages of development of insurance activities during the years of independence were not sufficiently studied in the field of Uzbek insurance. Therefore, this research work is relevant from a scientific and theoretical point of view. American Journal of Business Management, Economics and Banking Volume 27 August - 2024 P a g e | 23 www.americanjournal.org The results of the analysis of the economic literature dedicated to the research of the stages of development of insurance activity became the basis for researching the development of insurance activity in our country during the years of independence, dividing it into the following stages. The first stage covers the years 1991-1997, and this stage includes the abolition of the state monopoly in the insurance sector, the entry of privately owned insurance companies into the network, the rise of credit risk insurance, the creation of large insurance companies with the participation of state capital on the initiative of the government, the organization and implementation of insurance activities. is characterized by the formation of the legal basis of the increase. Insurance rose to a new level in Uzbekistan during the years of independence. The establishment of the first non-state insurance companies in 1991 was an important step in the formation of the private insurance sector. For example, on February 26, 1991, the insurance company "AstroVAZ" was established as a small enterprise with a charter capital of 100,000 rubles. On November 28, 1991, "AJSKA" started its activities and started providing insurance services to legal entities and individuals along with state insurance bodies. Also, this year, the structure of the insurance companies "Asko Vostok" and "Umid" became important in the formation of the competitive environment in the network. One of the cases in which the years of independence took a special place in the first stage of the development of insurance activity in Uzbekistan was the adoption of the Law "On Insurance" on May 6, 1993. This law consists of 34 articles, which reflect legal norms such as the concept of insurance, insurance objects and forms, mandatory and voluntary insurance, specific features of concluding an insurance contract. The adoption of this law undoubtedly started a new era in the insurance activity of Uzbekistan. On May 7, 1993, compulsory insurance of passengers was introduced on the basis of the Law of the Republic of Uzbekistan "On Compulsory Personal State Insurance of Passengers of Public Air, Railway, Inland Water and Road Transport". It should be noted that this type of insurance in our country was initially carried out by state insurance bodies, and later by state and state-owned insurance companies. Unfortunately, in 1991-1996, coordination and regulation of the activities of insurance companies in Uzbekistan was not systematically organized. This can also be seen in the fact that during these periods, the unified registration and registry of insurers was not carried out at the country level. Therefore, we are limited in our research to statistical data on the activities of more public insurance bodies. Despite this, some experts, including Sh.Baygin, noted that in 1995, the number of insurance companies in Uzbekistan reached 30. Continuing his opinion, he noted that there is no accurate information on the number of local insurance companies and emphasized that the state insurance control body, which coordinates the activities of insurance market participants, has not yet been established. In our opinion, in the first 6 years of the country's independence, the Civil Code of the Republic of Uzbekistan, adopted in 1996, was of great importance in the legal regulation of insurance activities. It should be noted that despite the fact that the adoption of the Law "On Insurance" in 1993 served to fill the existing gap in the regulation of relations between insurance companies and policyholders in a certain sense, some issues related to the conclusion of property and personal insurance contracts remained open. The Civil Code is distinguished by the fact that it fills this gap. American Journal of Business Management, Economics and Banking Volume 27 August - 2024 P a g e | 24 www.americanjournal.org The second stage of the development of insurance activity includes the years 1997-2002, and it can rightfully be noted as one of the important stages in the development of insurance activity in Uzbekistan during the years of independence. In these years, for the first time in our country, the classification of insurance activities was approved and the licensing of insurers was carried out. Also, at this stage, decrees and decisions aimed at stimulating the development of national insurance activities were adopted. Important changes characteristic of the second stage of the development of insurance activity include the fundamental reform of state insurance bodies and the establishment of large insurance companies with the participation of state capital on its basis. On the basis of the Decree of the President of the Republic of Uzbekistan No. PF-1710 dated February 18, 1997, "Uzbekinvest" national insurance company was established on April 13, 1994, the authorized capital is equal to 60.0 million US dollars. "Uzbekinvest" was transformed into an export-import national insurance company. The adoption of the Decree of the President of the Republic of Uzbekistan dated February 25, 1997 No. PF-1713 "Uzagrosugurta" on the establishment of the state joint-stock insurance company undoubtedly led to the complete reform of the system of state insurance bodies in our country. In accordance with this decree, the state joint-stock insurance company "Ozagrosug'urta" was established in the form of a joint-stock company, and it was considered the legal successor of the General Directorate of State Insurance under the Ministry of Finance of the Republic of Uzbekistan in terms of all property and non-property rights and obligations. As of the end of 2020, the "Guarantee" insurance company, which is one of the 5 largest insurers in the insurance market of Uzbekistan, was established on March 14, 1997 in accordance with the decision of the Cabinet of Ministers No. 144 and was entrusted with the task of providing insurance services to legal entities and individuals located in the cities of the republic. was one of the important events in the second stage of its development. However, the results of our research showed that despite the fact that more than 80 insurance companies operated in the country's insurance market in 1997, the provision of insurance services in the regions of the country was carried out by the district departments of the state joint-stock insurance company "Uzagrosugurta", which was established on the basis of the former state insurance bodies. At the end of 1997, insurance premiums totaling 2.03 billion soums were collected by all insurance companies, of which 910.7 million soums or 44.3 percent were contributed by the state joint-stock insurance company "Uzagrosugurta". It should be noted that until the first half of 1998, the absence of a competent state body for the regulation and control of insurance activity in our country caused the appearance of insurers who engaged in various frauds under the guise of an insurance company. For example, in 1996, the insurance company "Bukhara" attracted a large amount of money from the population under the condition of paying a high interest rate. However, he was unable to fulfill his obligations and caused huge losses to customers. Such negative situations, "still a big blow to the non-public insurance business among the population and legal entities, no doubt”. Based on the above, by the decision of the Cabinet of Ministers of the Republic of Uzbekistan No. 286 of July 8, 1998 "On measures to regulate insurance activity by the state", the function of state insurance control was assigned to the Ministry of Finance, and the state insurance control inspectorate was established under it. In accordance with this decision, it was determined that insurance companies operating in the territory of the Republic of Uzbekistan must re-register with the Ministry of Finance within three months. American Journal of Business Management, Economics and Banking Volume 27 August - 2024 P a g e | 25 www.americanjournal.org As a result of activities carried out in order to form a single database of insurance companies operating in our country, it was determined that there are more than 80 insurance companies operating in Uzbekistan with different forms of ownership. However, in 1998, 27 insurance companies were re- registered in the Ministry of Finance of the Republic of Uzbekistan. According to the data, the authorized capital of most insurance companies in the non-state sector is very small compared to the authorized capital of insurance companies established with the participation of state capital. For example, the authorized capital of "Sayyoh" insurance company was 6.2 thousand soums. However, the authorized capital of "Uzbekinvest" export-import national insurance company is 589 times more than the authorized capital of "Sayyoh" insurance company. How high the level of capitalization of insurers is important in insurance activity. Because the level of capitalization directly affects the financial stability of the insurer. In 2002, a number of legislative documents aimed at state support of insurance activities were adopted. In order to further develop the process of liberalization in the field of insurance services and deepen economic reforms, to strengthen the economic factors of the development of the insurance market in the republic, to strengthen the material and technical base of insurance companies and to ensure their financial stability. On January 31, 2002, the adoption of the Decree of the President of the Republic of Uzbekistan No. PF-3022 "On measures to further liberalize and develop the insurance market" was an important factor in raising the development of insurance activity to a new level. Based on this decree, starting from February 1, 2002, insurance companies, regardless of ownership, were exempted from paying income tax for a period of 3 years. It was determined that the funds freed up due to the exemption from paying taxes will be directed to the development of the material and technical base of insurance companies, the establishment of wide- ranging agency branches in the regions, training and retraining of personnel, including training and retraining abroad. The essence of the Law "On Insurance" adopted in 1993 did not meet the modern requirements of reforming the insurance activity during the next 9 years. Taking this into account, the Law "On Insurance Activities" was adopted on April 5, 2002. For the first time in the law, insurance was divided into the following 2 independent branches: the general insurance branch and the life insurance branch. Also, in this law, the rights and obligations of professional participants of the insurance market, the powers of the specially authorized state body, and the provision of norms such as licensing of insurance activities created an opportunity to further strengthen the legal basis of insurance activities. It should be recognized that from 1991 to the end of 2002, insurance companies in our country operated without a special license. Of course, it also had negative consequences. We touched on this above. It should be noted here that in all countries of the world, insurance activities are licensed by specially authorized state bodies. In this regard, the approval of the procedure for licensing insurance activities in accordance with the decision of the Cabinet of Ministers of the Republic of Uzbekistan No. 413 "On measures to further develop the insurance services market" on November 27, 2003 can be considered as an important event. Thus, in the years of independence, the second stage of the development of insurance activity in Uzbekistan left a mark as a stage in which important documents were adopted regarding the deepening of reforms and improvement of legal foundations in this sector. American Journal of Business Management, Economics and Banking Volume 27 August - 2024 P a g e | 26 www.americanjournal.org The years 2003-2009 can be recognized as the next third stage of the development of insurance activity in the country. It was during these years that the competitive environment in the field of insurance services intensified due to the increase in the number of insurers and their regional structures. In addition, the work started on economic stimulation of the development of insurance activities, improvement of the conditions for the activity of insurers, formation of the legal framework of the industry and training of bachelor personnel in the field of insurance was continued. On the basis of the decision of the President of the Republic of Uzbekistan dated April 10, 2007 No. PQ-618 "On measures for the further reform and development of the insurance services market", the approval of the "Program for the reform and development of the insurance market of the Republic of Uzbekistan in 2007-2010" and the professional insurance market the establishment of the association of participants has taken a special place in the development of national insurance activity. According to this program, in 2007-2010, the task was set to increase the volume of insurance services by 3 times, the insurance reserve of insurers by more than 2.5 times, and the gross capital of insurance companies by more than 2 times. The "Regulation on Insurance Agents" approved by the Order of the Minister of Finance of the Republic of Uzbekistan dated January 28, 2003 "On Approval of the Regulation on Insurance Agents" No. 19 and registered by the Ministry of Justice on February 1, 2003 with No.1213 is between insurance companies and insurance agents in our country. became important in regulating relations. Experience shows that the role of insurance agents in finding customers and selling insurance products to them is significant. Also, the "Regulation on Assets and Liabilities of Insurers" approved by the Order of the Minister of Finance of the Republic of Uzbekistan dated January 19, 2004 No. 18 "On Approval of the Regulation on Assets and Liabilities of Insurers" and registered by the Ministry of Justice on March 16, 2004 with No. 1328 by its very nature, it has gained great importance in strengthening the solvency of insurers and, on this basis, in protecting the interests of a large number of insurance consumers. On April 17, 2009, the Law of the Republic of Uzbekistan "On compulsory civil liability insurance of the employer" was adopted. This law envisages the implementation of the second type of compulsory insurance provided for in the program of reform and development of the insurance market for 2007-2010. The main purpose of the adoption of this law is to ensure social protection of citizens who have been injured in the course of work, have an occupational disease or have suffered health damage while performing their duties. The procedure for compulsory civil liability insurance of the employer is approved in accordance with the decision No. 177 of the Cabinet of Ministers of the Republic of Uzbekistan "On measures to implement the Law of the Republic of Uzbekistan "On compulsory civil liability insurance of the employer" adopted on June 24, 2009. which is expressed in the Rules of Compulsory Insurance. The rules of compulsory insurance apply equally to all insurers who have a license to carry out this type of insurance. The next fifth stage of the development of insurance activity in Uzbekistan includes important changes observed in the insurance sector of the economy in 2017 and beyond. Paragraph 3.1 of the "Strategy of Actions on Five Priority Areas of Development of the Republic of Uzbekistan in 2017-2021" approved in accordance with Appendix 1 of the Decree of the President of the Republic of Uzbekistan No. PF-4947 dated February 7, 2017 "On the Strategy of Actions for Further Development of the Republic of Uzbekistan" expanding the volume of insurance, leasing and other financial services due to the introduction of new types and improvement of their quality, as well American Journal of Business Management, Economics and Banking Volume 27 August - 2024 P a g e | 27 www.americanjournal.org as the definition of the tasks of attracting capital and developing the stock market as an alternative source for the deployment of free resources of enterprises, financial institutions and the population" implies the need to further increase the role and role of insurance in the economy in the next years. Conclusions and Suggestions In the years of independence, the development stages of insurance activity were systematically researched, divided into five stages based on legal documents and official statistics. The results of the research carried out within the framework of the first stage showed that despite the emergence of private insurance companies in the insurance sector, the dominant position of the state insurance bodies (Gosstrax) in the market has been preserved. Also, at the second stage of the development of insurance activity, based on the initiative of the government of Uzbekistan, the fundamental reform of the system of state insurance bodies and the creation of the insurance companies "Uzagrosugurta" and "Kafolat" with the participation of state capital on its basis, and the national insurance company "Uzbekinvest" as the national export-import insurance company "Uzbekinvest" it should be noted separately that it was reorganized. At this stage, it was recognized that the formation of the state body for the regulation of insurance activity and the adoption of important documents aimed at state support for the development of the insurance market were of particular importance in the development of insurance activity in Uzbekistan. The third stage of the development of insurance activity in our country covered the years 2003-2009, and the results of the research showed that at this stage, the competitive environment in the national insurance market and the scope of providing insurance services to customers expanded. It was from this period that insurance companies began to operate in two independent sectors, i.e. general and life insurance sector. The results of the conducted research made it possible to determine the specific characteristics of the fourth stage of the development of insurance activity. In particular, the number of insurers decreased by 8 at this stage, covering the years 2010-2016. From July 1, 2012, the strengthening of the requirement for the minimum authorized capital of insurance companies caused an increase in the level of capitalization of insurers, and consequently, an expansion of the insurance capacity of national insurance companies. References: 1. Law of the Republic of Uzbekistan "On protection of joint-stock companies and shareholders' rights".//National database of information on legal documents of the Republic of Uzbekistanwww.lex.uz. 2. Шеннаев Х.М. Страховая система Узбекистана: этапы становления // журнал «Рынок, деньги и кредит», №6 2004.– с.26-29. 3. Икрамов О.Г., Шеннаев Х.М. Market of insurance services in Uzbekistan: development trends and prospects//"Finance" scientific journal, 2008. 36-48 б. 4. Асанов Р.К. Формирование концепции “цифровой экономики” в современной науке / Р.К.Асанов // Социально-экономические науки и гуманитарные исследования.– 2016.– № 15.– С.143–148. 5. Байгин Ш. Если “у страха глаза велики” – покупайте страховку (рядовой клиент в массе своей редко прибегает к услугам страховых компаний – такого особенность нашего рынка). http://www.lex.uz/ American Journal of Business Management, Economics and Banking Volume 27 August - 2024 P a g e | 28 www.americanjournal.org // газета “Бизнес-вестник Востока”, №23 (179) 9-15 июня 1995 г. с.5. 6. Law of the Republic of Uzbekistan "On mandatory civil liability insurance of the employer". Collection of Legislative documents of the Republic of Uzbekistan. - T.: Ministry of Justice, 2009, No. 16 7. "Rules for compulsory civil liability insurance of the employer" approved by the decision of the Cabinet of Ministers of the Republic of Uzbekistan No. 177 of June 24, 2009 "On measures to implement the Law of the Republic of Uzbekistan on compulsory civil liability insurance of the employer" 8. https://www.lex.uz/docs/1493389. http://www.lex.uz/docs/1493389