New Insurance Law to Solve Main Problems in Azerbaijan’s Market – Insurance Company’s Head
Azerbaijan, Baku, 3 April / Trend corr Y. Ismayilova/ A new Law on insurance activities will promote professionalism in Azerbaijan's insurance market, Nofel Rzayev, the Director General of Pasa Sigort, said.
"Presently, the insurance market is facing four major problems which we hope will be solved in future in accordance with the regulations of the new Law," Rzayev said.
According to Rzayev, the four major problems are:
- Low capitalization of insurance companies: the insurance companies of Azerbaijan should have the authorized capital of some AZN 15-20mln in order to carry out fully-fledged insurance activities instead of working as a broker re-insuring large risks of large re-insuring companies.
- Mass popularization of insurance policies (which is not used in the world today) - when insuring a car or property banks conclude insurance agreements with the borrower with no communication from the insurer and the insured.
- Weak work on obligatory insurance which may promote voluntary insurance.
- Bad organization of insurers in the country.
According to Rzayev, bad organization of the insurers reflects the activity of the Azerbaijan Association of Insurers, which during the year of its operation did not implement the expected consultative and educative work.
On 15 March, the Law on Insurance Activities took effect in Azerbaijan. The document envisages the main directions and principles of development of the insurance system, specialized market participants, insurers and re-insurers, and defines the economic basics and the right of the State Insurance Control.
Pasa Sigorta, with its authorized capital comprising AZN 4mln, has been operating in Azerbaijan since 2006 offering 29 types of insurance. In 2007, the company received the management quality certificate from Moody International Certification Services.
There are 28 insurance and one re-insurance company in Azerbaijan. The total amount of the companies' premiums comprised AZN 147.2mln and the payments AZN 35.62mln in 2007.
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