BAKU, Azerbaijan, April 6
By Yusif Aghayev - Trend:
The exemption of the Azerbaijani insurance companies from making mandatory contributions to the Central Bank of Azerbaijan (financial market supervision body) in April will have a beneficial effect on the stabilization of the activity of the country's insurance market affected as a result of coronavirus, Chairman of the Association of Insurers of Azerbaijan Azer Aliyev told Trend.
“The insurance sector was greatly affected as a result of the pandemic, as during a downturn in economic activity, both corporate clients and individuals refuse from making insurance payments,” the chairman added.
“There has been a decrease in business activity in the sector over the last 2-3 weeks, since the introduction of a special quarantine regime in the country,” Aliyev said. “Some customers refuse to prolong the existing contracts. The amount of accounts receivable is growing, not to mention the types for which the fees have been ceased completely, such as insurance of those going abroad.”
"Taking into account the danger of spreading coronavirus, despite the insurers belong to the category of employees who are allowed to work during the period of restriction of movement due to the strengthening of the special quarantine regime, the staff of many insurance companies work at home," the chairman added.
The amount of deductions by insurance and reinsurance companies to the Central Bank is carried out according to the formula. The base rate on incoming premiums (insurance and reinsurance) not exceeding 10 million manat ($5.9 million) is taken as the basis, 4 percent for non-life insurers and reinsurers and 0.44 percent for life insurers.
In accordance with the Action Plan on the implementation of the order of the President of Azerbaijan dated March 19, 2020 “On a number of measures to reduce the negative impact of coronavirus (COVID-19) and sharp fluctuations as a result of coronavirus in the global energy market and stock market, on the economy of the Republic of Azerbaijan, macroeconomic stability, issues of employment in the country and business entities" approved by the Cabinet of Ministers on April 4, the banks and insurance companies in Azerbaijan are exempted from making payments to the Central Bank of Azerbaijan in April 2020.