One of cofounders of compulsory insurance bureau under formation in Azerbaijan specified
Azerbaijan, Baku, November 4 / Trend, A. Akhundov /
Azerbaijani insurance company Paşa Sığorta decided to join the number of official founders of a compulsory insurance bureau, which is being formed in compliance with the requirements of the new Law "On Compulsory Kinds of Insurance".
"Paşa Sığorta current business plan for 2011-2013 envisions the company's active participation in the compulsory insurance process so the Board of Directors took decision to join the number of official founders of the compulsory insurance bureau being formed in accordance with the new Law's requirements," Rzayev said.
He said the fact is very good that leaders of the Finance Ministry and large insurance companies will work together in the bureau's board of trustees.
"International experience illustrates that it is crucially essential to provide effective dialogue and full-fledged partnership between state regulator and insurance companies to make compulsory insurance a success," Rzayev said.
He noted that insurers expect the Finance Ministry to approve terms on the entire four new compulsory kinds of insurance, the compulsory insurance bureau where membership will be obligatory for compulsory insurers to start operating, and State Insurance Supervision Department to issue initial permissions for compulsory insurance policies to concrete insurers before the end of the year.
"One should remember that European states historically supported either their population or insurers at a time when the insurance culture was getting affirmed in their respective countries exactly through the compulsory kinds - on property, on responsibility, on hazardous industries, and on construction - of insurance," Rzayev said.
Compulsory insurance plays particular role after crises as well, he noted.
"Azerbaijani economy demonstrates quite a healthy development but at the same time our companies and population are not secured against natural calamities, fires and other accidents. I think Azerbaijani insurers, if they receive the needed support, will be able to develop compulsory insurance potential and provide our businesses and population with high-quality insurance protection," Rzayev said.
Namig Khalilov, Chief of the Finance Ministry's State Insurance Supervision Department, told Trend earlier that insurance companies' fees to the compulsory insurance bureau will not be calendar payments only.
"If a certain company is bankrupt, money that will be accumulated in the bureau will not be sufficient to let it fulfill its commitments on insurance contracts, and additional payments by insurance companies can be made in such case," Khalilov noted.
He said the compulsory insurance bureau will represent a union of insurance companies to be involved in these kinds of insurance and will act as a separate agency independently from the State Insurance Supervision Department and the Association of Insurers. The bureau will pursue its own policy of investing its assets in order to keep these investments safe and profitable.
"If incomes exceed expenditures all this money will be accumulated, managed, boosted, etc. Undoubtedly, this money should not just be kept but bring earnings. The bureau will have its assembly of founders and board of trustees that will decide what exact instruments need to be used for the placing of this money," Khalilov said.
Following development of compulsory kinds of insurance, commitments to be taken by insurance companies will grow.
"The bigger this fund will be the better opportunities of protecting insurers' rights will be, in case of force major," Khalilov said.
He said assets of this fund will not be distributed neither paid back to its participants.
The Law "On Compulsory Kinds Of Insurance" regulating the following four kinds of compulsory insurance - real estate insurance, civil liability of vehicle owners (OSAGO), insurance of passengers, and real estate civil liability insurance - has been in effect in Azerbaijan since September 2011.
A total of nine kinds of compulsory insurance are effective in the country.
Pasa Sıgorta, a member of the Pasa Holding, was registered on March 3, 2006. It provides services to corporate and individual clients on 30 types of insurance. The statutory capital of the company is 30 million manat; the company is the leader of the country's insurance market in terms of capitalization.
The official exchange rate on November 4 is 0.7869 AZN/USD