27 insurance companies receive permanent licenses in Azerbaijan
Baku, Azerbaijan, Oct. 8
By Azad Hasanli - Trend:
Azerbaijani Finance Ministry issued permanent insurance licenses to 27 of 28 insurance companies operating in the country (including a reinsurance company) on Oct. 8, according to the State Insurance Supervision Service's register.
The last such license was issued to the Alfa Sigorta insurance company on Apr. 3, 2013.
Under the 'Law on insurance activity', which entered into force in March 2008, the permits for insurance activities in Azerbaijan are issued from this day on permanently.
Previously, they were issued for a period of five years. The first permit are issued for the newly created companies for five years.
Companies can apply for a permanent license after the expiration of the current license. The insurance supervision service renewed the permits of 27 companies today. The license of the Pasha Heyat Sıgorta insurance company will expire in 2016.
The license of the Royal Sıgorta insurance company was also expected to be renewed in 2016, but in Feb. 2014 the insurance supervision service temporarily suspended its operations due to shortcomings in its work.
In August, Royal Sıgorta's license was completely canceled.
In order to be engaged in reinsurance activities the insurers will need to obtain a separate license, under the amendments to Azerbaijan's insurance legislation, made in late 2013. At present, 11 insurance companies have a reinsurance license.
The permits were first issued in Feb. 2014 to Pasha Sıgorta, Mega Sıgorta, AzSıgorta, Azerbaijan Senaye Sigorta, and Xalq Sıgorta.
In early May, the permits were issued to Standard Insurance, Ata Sıgorta, AXA MBASK, Ipek Yolu Sıgorta and Pasha Heyat Sıgorta, and in June the license was received by the International Insurance Company.
The decision to separate the insurance and reinsurance activities was meant to provide greater financial stability of insurance companies, which, in addition to their main businesses, also engage in the reinsurance activities.
Aside from that, this is an additional incentive for insurance companies in the areas of boosting the capitalization and opening additional opportunities to attract reinsurance business.
From March 1, 2014 the capital of the insurance companies, wishing to obtain reinsurance licenses, has to exceed the minimum requirement set for the insurance companies, by 2.5 million AZN (nearly $3 million on Oct. 8)
Today, this minimum requirement stands at 5 million AZN.
Starting from Jan. 1, 2015 the minimum requirement should be exceeded by five million AZN.
In Jan.-Aug., 2014 the total amount of insurance fee of the insurance companies working in Azerbaijan, stood at 283.26 million AZN, or 6.6 percent (17.54 million AZN) more than in the same period of last year.
The insurance companies' payments in the first eight months of 2014 amounted to 103.53 million AZN, or 32.9 percent (25.7 million AZN) more than in Jan.-Aug. 2013.
The official exchange rate on Oct. 8 is 0.7843 AZN/USD.
Edited by S.I.