Market participant: Complex plan required for compulsory insurance in Azerbaijan

Business Materials 12 January 2011 14:21 (UTC +04:00)

Azerbaijan, Baku, Jan. 12 / Trend U.Ismayilova /

Introducing the compulsory insurance of disability resulting from occupational diseases and accidents at work in Azerbaijan will create an additional incentive to enhance the country's insurance market, Azer Jafarov, Advisor to the Chairman of Atesgah insurance company (former head of State Insurance Service under the Azerbaijani Cabinet of Ministers), said in an interview with an official newspaper.

"New companies on life insurance will appear on the insurance market. Successful introduction of new insurance services will enhance public confidence in the insurance," he said.

He said that the new law "Compulsory insurance of disability resulting from occupational diseases and accidents at work" will also affect the growth of the culture of insurance in the country and will promote this type of insurance.

The most important thing is that the new law will increase the responsibility of employers to the staff. By introducing the law, payments will be made in time. It will also serve as an additional incentive for employees.

"This law is really important document," Jafarov said.

He said that at present, life insurance in Azerbaijan is being revived. So, it appeared on the market in early 20 century. The new law will become a major legal document to ensure development of this type of insurance services.

He said that the new law is beneficial to the insurer, the insured and the employer, as now, there is significant growth in construction. But each facility complies with the rules of technical safety.

Compulsory insurance will resolve these problems, as well as increase the responsibility of employers.

Jafarov also said that the insurance companies will provide only the technical side of the new law. But the Azerbaijani Ministry of Labour and Social Welfare and the Association of Insurers, as well as employers themselves will mainly work to ensure the implementation of the law. "It would be good if the State Insurance Service and the Labour Inspectorate develop a comprehensive Action Plan to implement the new law," he said.

In July 2010, Azerbaijani President Ilham Aliyev approved the Law on compulsory insurance on labor ability loss in production. At present, there are only two companies specializing in life insurance - Atesgah Heyat and Qala Heyat. Licensing of Pasa Heyat is expected to be completed soon.

According to the World Labor Organization, the accidents at work kill 2.3 million people each year worldwide, three times more people are injured.

In Azerbaijan, in 2007, there had been recorded 259 accidents, 128 facts of death, 202 facts of injury, in 2008 - 255 accidents, 79 deaths and 212 facts of injury, in 2009 - 250 accidents, 69 deaths and 218 injuries.