Azerbaijan, Baku, Aug. 19 / Trend A.Akhundov /
Azerbaijan does need a fund of guarantee payment on OSAGO (mandatory automobile civil liability insurance), Azerbaijani Insurance Company Ltd. Pasa Sıgorta Chairman Nofel Rzayev said.
"There is no necessity, because limits are very low and insurance companies can easily cope with the requirements under the current legislation," Rzayev said.
Under the draft law on obligatory types of insurance, which is prepared by the Azerbaijani Finance Ministry, the negotiations on issue to increase the fees for OSAGO are underway.
Rzayev said if the conditions of insurance coverage will remain the same, according to latest calculations of actuaries and underwriters, the OSAGO rate must be at 40 manat per year.
The current coverage for this type of insurance is 5,000 manat per year (to cover damage to health) and 1,000 manat per insured event due to damage to property. The premium for OSAGO is 10 manat.
"This is a serious concern to insurance companies, but they do not have the right to refuse a client in this service, as it is a mandatory form of insurance. They [the insurers] have lost all interest in it [OSAGO], because it is financially unreasonable for the insurer," Rzayev said.
Development of the OSAGO market will not affect the market for voluntary insurance, Rzayev added.
"This is due to the fact that OSAGO is liability insurance, and private insurance can include liability, and can not," he said.
OSAGO tariffs vary in the range from $90 to $200 in Russia. Azerbaijan introduced a uniform tariff, for this type of insurance, while the Russian insurance market used the base rate of around $80 and set different rates depending on the conditions and place operation of the vehicle, expiration date, the person who uses them.
The Azerbaijani Finance Ministry is in talks with the insurance companies on the possibility of increasing OSAGO tariffs to 25,000-50,000 manat.
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