BAKU, Azerbaijan, Feb. 29
By Yusif Aghayev – Trend:
The system of agricultural insurance in Azerbaijan will be based on the principles of joint risk sharing, and used for the first time in the country's insurance system, Trend reports referring to Azerbaijan's Agricultural Insurance Fund.
According to this system, participants are insured through joint funds, creating collective insurance capital. Unlike insurance conditions developed by private insurance companies, the total insurance premiums that form this insurance capital, in the absence of insurance payments, are transferred to the next year.
In addition to the above, it is provided for subsidizing agricultural insurance by the state, in accordance with the established interest rates. As a result, a stable and effective insurance system, which allows avoiding the burden on the state budget in the event of natural disasters and other unforeseen events of a catastrophic nature causing serious damage to the country's agricultural complex will be ensured.
The new mechanism provides for the establishment of a management body to be established by insurance companies under the Agricultural Insurance Fund. The main function of the management company will be the exercise of the executive powers of the fund, the sale of insurance contracts, and the organization of the preparation and support of its own electronic information system.
The usage of agricultural insurance mechanisms is expected from the second half of 2020.
On August 19, 2019, President Ilham Aliyev signed a decree on the application of the law on agricultural insurance and the creation of the Agricultural Insurance Fund. This fund is non-profit legal entity that ensures the organization, development and stability of the agricultural insurance system in Azerbaijan, as well as the formation of a governing structure and exercises control for his activities.
The Cabinet of Ministers of Azerbaijan approved the Charter of the Agricultural Insurance Fund on December 14, 2019. The Charter sets the goals of the activity, obligations and rights of the fund, the basis of its management, authorized capital, property and financial activities, the procedure for compiling and submitting audit and accounting reports, as well as other issues.
The mandate of the fund is to determine the main directions of the policy in the field of agricultural insurance, implement the functions of channeling assets into investments to ensure the effective operations of the fund, conclude contracts with professional participants in the insurance market for mediation in the field of agricultural insurance, and much more.
The Azerbaijani Agricultural Insurance Fund and the Turkish Agricultural Insurance Union (TARSIM) have signed a Declaration of Intent in the field of agricultural insurance on February 27.
The declaration of intent envisages cooperation in the field of agricultural insurance between the two countries.