Azerbaijani Finance Ministry receives first appeal for passengers’ compulsory insurance

Business Materials 11 January 2012 20:24 (UTC +04:00)

Azerbaijan, Baku, Jan.11 / Trend A.Akhundov /

The Azerbaijani insurance company Ipek Yolu Sıgorta (earlier Azal Sıgorta) became the first company which appealed to the Finance Ministry for participation in the bureau on compulsory insurance for all four kinds regulated by the new law on "Mandatory types of insurance", the company told Trend today.

"We have already appealed to the Finance Ministry and wait for the decision," the company said.

The bureau on compulsory insurance was established in Azerbaijan in accordance with the requirements of the law on "Mandatory types of insurance".

The law regulates four types of compulsory insurance - real estate, liability of owners of vehicles, passenger insurance and liability insurance while touching on real estate. Insurance companies started using the law since December 16, 2011.

Pasa Sıgorta, Atesgah Sıgorta, Ata Sıgorta, AXA MBASK, Xalq Sıgorta and Standard Insurance are the founders of the bureau. AzSıgorta joined the bureau later.

All these companies will render services for three types of compulsory insurance - liability of owners of motor vehicles, real property and insurance of liability while using real estate.
That is, today, compulsory insurance of passengers does not work in Azerbaijan.

The companies, which announced the plans to participate in the bureau and sent the appropriate request to the Finance Ministry (Azerbaycan Senaye Sıgorta, the state commercial insurance company AzerSıgorta, Azerqarant Sıgorta, Basak İnam, International Insurance Company, Era Trans Sıgorta, Mega Sıgorta, Royal Sıgorta) do not plan to deal with compulsory insurance of passengers.

The sum to be paid while concluding a contract of this kind for a period of one year for each vehicle is formed depending on the number of passenger seats in it and the amount determined for a passenger seat, depending on the type of vehicle.

The sum insured for one passenger seat in the aircrafts is specified to the amount of 14 manat, ship - 5 manat, train - 3 manat, vehicles - 6 manat.

The new law, as opposed to the old one, abolished the practice of insurance payments only to passengers having the tickets. That is, the insurance is envisaged for all passengers.

The compulsory insurance of passengers envisages insurance payments in case of damage to life and health of passengers of intercity and international air, railway and road transport.

The finance ministry set a membership fee at 200,000 manat. Fees worth 200,000 manat for obligatory liability insurance of vehicle owners, 200,000 manat for insurance of passengers, 100,000 manat for property insurance and 100,000 manat for liability insurance of real estate operation defined to obtain permission to engage in these kinds of insurance.

Besides the contributions for participation, permits and fees to the sum of five per cent per transaction, there will be additional benefits in the course of the activities (transfers to warranty service coupon and calendar payments.

The number of participants in the compulsory insurance Office established in Azerbaijan may increase to 15, Namig Khalilov, head of the State Service for Insurance Supervision, said earlier.

"About 10 to15 companies have the capability to meet the requirements for entry into the bureau. A list of participants can further expand with the increasing ability of firms in the future", Mr Khalilov said.

He added that the number of participant in the bureau can increase to 10 by late 2011- early 2012.

İpek Yolu insurance company, specializing in air transport insurance, was established in 1995.

There are 29 insurance and one reinsurance companies in Azerbaijan. At the same time the insurance license of the Fidan Sığorta Company was suspended.

The official exchange rate is 0.7863 manat to $1 on Jan.11.