Fees of insurance companies to Bureau of Obligatory Insurance not to be limited to calendar payments

Azerbaijan, Baku, June 26 / corr Trend A.Akhundov /

Fees of insurance companies to the Bureau of Obligatory Insurance which is planned to establish in Azerbaijan, will not be limited only to calendar payments, head of the State Service for Insurance Control at the Finances Ministry, Namig Khalilov, told Trend.

"In case a company, which became bankrupt, has insufficient money at the bureau to pay its insurance contract obligations, then insurance companies could pay additional fees," Khalilov said.

According to Khalilov, work to establish the bureau will commence after enactment of the law on obligatory types of insurance, which was adopted last Friday in the third reading.

"The Bureaus for obligatory insurance will represent a union of insurance companies, which will be involved in these types of insurance and act as a separate organization independently on the State Insurance Control and the Association of Insurers," Khalilov said.

The bureau will have its police of investing funds to ensure safety and definite profitability of investments.

"If income exceeds expense, the funds will be accumulated, managed and increased," Khalilov underscored. "Indeed, the funds should not be kept inactively, but bring profit. The bureau will hold an assembly of founders, a trustee council, which will solve which tools to use to place funds."

According to Khalilov, by developing obligatory types of insurance responsibilities the insurance companies undertake will also expand.

"So, as much the fund is, as much opportunities to defend insurers' rights in cases of emergencies," Khalilov added. "The fund's resources will not be distributed and will not be repaid to participants.

Deputy Finance Minister Azer Bayramov said earlier the initial bill on the establishment of the bureau was envisaged only to deal with the compulsory motor TPL insurance, but given the suggestions expressed during the discussion of the bill, it will apply to all types of compulsory insurances covered by this law.

There are about nine types of compulsory insurances, the bill regulates four types of compulsory insurance - real estate, TPL, passenger insurance, liability insurance in the operation of real estate.

The executive director of Insurers Association Azer Aliyev told Trend that at the beginning stage, the main activities of the bureau will account for TPL, given the large number of losses in this type of insurance unlike other insurances. Over time, these losses will be reduced, said Aliyev.

In accordance with the law, insurance company should transfer monthly payments to the bureau in the amount of 5 percent of insurance premiums under the obligatory insurance contracts.

All insurers, licensed for obligatory types of insurance, should become members of the bureau and put transfer guarantee deposit.

Furthermore, it is planned to establish electronic information system and its coordination other information systems.

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