Azerbaijan, Baku, May 19 / Trend A.Akhundov /
It is proposed to exclude from the bill "On compulsory types of insurance" the item regarding the franchise on property insurance, as it contradicts the other points of the law, Executive Director of Azerbaijan Insurers Association (AIA) Azer Aliyev told Trend.
The AIA submitted a proposal to the Finance Ministry in early May as a part of submission of the bill for the third reading to the parliament. The bill was passed on second reading in late April.
"The first proposals were of a technical nature to improve the structure of the bill. It was also proposed to remove certain articles of the bill as they are duplicated in other positions," Aliyev said.
He said the insurers also proposed to include the concept of "harm caused to life" in addition to the concept of "harm caused to health" in the bill, as well as to transfer the payment of premiums by the policyholder not once, but in two parts.
"It is also suggested to rename the chapter title" Compulsory insurance of civil liability of vehicle owners "to" Compulsory insurance of civil liability of auto vehicle owners, "as the bill is about motor vehicles," Aliyev said.
He said the ministry has not yet answered to proposals.
This draft law regulates the four types of compulsory insurance - real estate, liability of owners of motor vehicles, passenger insurance, and liability insurance while exploiting the real estate.
Under the bill, regardless of the housing cost the insurance sum is set at 25,000 manat for Baku, and the release amount at 250 manat. The figures are 20,000 manat and 200 manat, respectively, for Sumgait, Ganja and Nakhchivan and 15,000 manat and 150 manat - for other regions.
The insurance fee for Baku's resident will hit 50 manat a year with insurance rate at 0.2 percent for this type of insurance. One who seeks a higher amount of insurance compensation has the opportunity to buy voluntary property insurance policy that will allow development of this insurance type.
Under the bill, the compulsory insurance of real estate will be distributed to all types of buildings, houses and apartments belonging to individuals, offices, legal entities, public property. In this case the insured event will be considered the facts related to damage to this property as a result of fire, explosion, lightning, short circuit in the electrical system, an accident in the sewer or water system, natural disasters, etc.
Compulsory insurance of civil liability associated with the exploitation of real estate provides insurance protection for third parties from harm caused by using this property. This kind of insurance will apply to legal and physical entities engaged in entrepreneurial activity. The rate of insurance coverage for this type of insurance for damage to health will hit 50,000 manat (per person, 5,000 manat), property - 50,000 manat.
Compulsory insurance for passengers will relate to people using the vehicles, regardless of its form. The amount of the insurance coverage will hit 5,000 manat per person. Until now, this type of insurance is regulated by the law adopted in 2003, but the acting form is unacceptable today and creates problems in obtaining compensation.
The bill provides for a differentiated approach while determining the insurance rate, depending on the vehicle. The rate of insurance coverage on property will amount to 5,000 manat (1,000 manat today) and 50,000 manat (5,000 manat today) for health. This activity is regulated by the law dated 1996.
Twenty seven insurance companies and one reinsurance company operated in Azerbaijan in the report period.