Azerbaijan may change compulsory car liability insurance rates
BAKU, Azerbaijan, May 26
By Yusif Aghayev - Trend:
Rates and insurance amounts for compulsory car liability insurance (OSAGO) in Azerbaijan may be changed, Executive Director of the country’s Compulsory Insurance Bureau Rashad Ahmadov told Trend.
According to him, an appropriate working group has been set up, which is actively working in this direction. Ahmadov said the mentioned rates for this type of insurance were set in 2011, and have not changed since then.
“So, the insurance amount under compulsory motor-vehicle liability insurance for damage caused to the health of individuals was set at 5,000 manat ($2,940), given that it wouldn’t exceed 50,000 manat ($29,400) for one case, and for damage caused to property of third parties - 5,000 manat,” he said.
“If the total amount of the insurer’s liability for damage caused as a result of an insured case to several third parties, calculated separately for each suffered person in the manner prescribed by the law on compulsory insurance, exceeds the indicated insurance amounts, then insurance compensation will be issued to each suffered person in proportion to the ratio of the total insurance amount established for one insured case and the amount of damage caused by it,” said Ahmadov.
“If a driver, passenger or pedestrian dies as a result of a traffic accident, which may be considered an insurance case, the insurer, who insured the civil liability of the owner of this vehicle, pays compensation to the family members of the deceased in the amount of 20 percent of the sum insured within two working days from the receipt of a certificate from the relevant state body confirming this fact and a copy of the relevant death certificate,” Ahmadov explained.
“Over the past period, many economic indicators have changed. Several waves of devaluation seriously affected the prices of spare parts and components for cars, as well as the cost of their repairs,” he said. “As a result, the above insurance amounts ceased to be relevant.”
“At the same time, an increase in insurance premiums also will affect insurance rates since the loss ratio for this type of insurance is quite high. According to the results of 2019, the loss ratio for this type of insurance amounted to approximately 67 percent, while in the first quarter of 2020 it reached 84 percent, despite the fact that the premiums collected compared to the 1st quarter of 2019 decreased by four percent,” he added.
Compulsory insurance in Azerbaijan is carried out by insurance companies licensed for a certain type of compulsory insurance, included in the Compulsory Insurance Bureau. There are currently 15 such companies, 4 of which operate in life insurance, and 11 in non-life insurance segments.
Presently, 21 insurance companies and one reinsurance company operate in Azerbaijan.
(1 USD = 1.7 AZN on May 26)
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