Azerbaijan, Baku, 31 March / corr. Trend U. Ismayilova/ The new Law on Insurance in Azerbaijan will provide conditions for only professional insurance companies in the market, which will contribute in gaining the confidence of population which is a critical element for the insurance, said Dovlat Salimov, the manager of StarAlyans insurance company on 31 March.
The new Law on Insurance took effect on 15 March. The law establishes basic principles of the development of insurance system and specialized players of the market, insurers and re-insurers, and also establishes economic basis and right of the state insurance watchdog as well.
According to Salimov, the new law will positively affect the insurance market of the country. "The previous law on insurance had put restrictions on the activities of insurance companies," Salimov said. For instance, the foreign capital could make up only 49% of the capital which has been canceled in the new law. The companies could not assume serious responsibilities and turned to large foreign re-insurance companies for the payment of big risks which caused an outflow of capital from Azerbaijan.
"Such conditions hindered the development of the market," Salimov said.
According to new law, the investors have a right to obtain 100% of shares of the domestic insurance companies and companies will have to transfer into open joint stock company. Salimov said that the companies with foreign capital and international experience can offer high-quality insurance services.
"Only strong companies can survive healthy competition," Salimov said.
According to Salimov, the new rules and competition will force companies to employee only skilled workers. "The skilled agents will appear as a result of the training, which will solve the problem of shortage of insurance workers," Salimov said.
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