BAKU, Azerbaijan, Mar. 18
By Matanat Nasibova - Trend:
Changes in insurance legislation, especially in legislation on compulsory types of insurance in Azerbaijan are expected in Azerbaijan in 2020, Chairman of the board of the Azerbaijan Insurers Association Azer Aliyev told Trend.
“Since the law on compulsory types of insurance was adopted in 2011, the country's socio-economic situation has changed a lot. Besides the fact that the insurance market has increased more than three times, there has been a devaluation in the country, as a result of which the value of many foreign-made goods has increased,” said the chairman.
“Moreover, the development of the market also did not stand still, and modern technologies were widely introduced. Currently, compulsory motor-vehicle liability insurance (OSAGO), as well as compulsory insurance against industrial accidents and occupational diseases, have been fully digitalized,” Aliyev said.
“In the process of institutional development, many insurance companies introduced modern innovations, digital modules in their activities and voluntary types of insurance. The new agricultural insurance mechanism, which is expected to launch in 2020, will also be digitalized,” the chairman said.
“All these changes require amendments to the relevant legislation. A feature of the legislation on compulsory types of insurance is that tariffs, insurance coverage, deductibles and other conditions of the insurance contract are established by law,” Aliyev noted.
“So, in the law on compulsory types of insurance, regarding the owners of OSAGO, both insurance rates and the size of insurance coverage - 5,000 manat ($2,941) for property damage and 25,000 manat ($14,705) for damage to the health of individuals, are established at fixed rates. Over the past nine years, the cost of both spare parts for cars and repair work has increased significantly. As a result, on the one hand, the size of insurance coverage for property damage does not meet today's realities, covering only insignificant losses, and on the other hand, tariffs that have not changed over the past period have made this type of insurance highly loss-making,” said the chairman.
In addition, the bonus-malus system, which provides for the use of increasing coefficients or discounts, depending on unprofitable or break-even driving, requires a serious review, Aliyev noted.
The fact that the powers of the insurance market regulator passed to the Central Bank of Azerbaijan (CBA) at the end of 2020, gives a great hope, he said.
Aliyev added that relevant proposals on amendments to the insurance legislation have been prepared and submitted to the CBA by the Azerbaijan Insurers Association.
Presently, 22 insurance companies and one reinsurance company operate in Azerbaijan.
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