Azerbaijani insurers apply for release from one type of tax
Azerbaijan, Baku, July 24 / Trend , U.Ismayilova, I.Khalilova/
A profit tax should not be imposed on life insurance in Azerbaijan, Deputy Chairman of Az Sigorta company Khayal Mammadkhanli said.
"Many countries do not impose a profit tax on life insurance; it is not considered profitable," Mammadkhanli said.
He said that Azerbaijani insurers intend to apply to the Association of Insurers of Azerbaijan to propose that the Tax Ministry omit life insurance from profit tax.
Mammadkhanli said profit tax is not the only problem that hinders the development of this type of insurance in the country. Additional capital is necessary to develop and establish a company devoted entirely to life insurance.
"At present, due to the crisis, it is too difficult to think about additional capital," he said.
In Azerbaijan, under the law on "Insurance activity", which came into force in March 2008, companies involved in life insurance and other type of insurance must be separate and operate on different capitals.
Mammadkhanli said that another problem is that people worry about carrying out long-term investments, especially in a crisis situation. Potential clients are trying to learn as much information as possible about the company's financial indicators.
"This most important impetus to the development of life insurance will become active propaganda," he added.
At present, there is only one company in Azerbaijan that provides services exclusively on life insurance - Atesgah Heyat - formed from Atesgah company by separating the life insurance policies from other types of insurance.
Az Sigorta insurance has operated on the market since November 2006. At present the company has eight branches, as well as 40 regional offices in the country's regions. Az Sigorta offers 28 kinds of insurance services, three of which are mandatory.
In January-June, Az Sigorta collected premiums worth 5.56 million manat, with 1.95 million of payments.