Over half of potential customers covered by compulsory insurance at production

Business Materials 19 January 2012 15:27 (UTC +04:00)

Azerbaijan, Baku, Jan.19 / Trend A.Akhundov /

Over half of potential customers are already insured by compulsory insurance against disability resulting from occupational diseases and industrial accidents, which has been in force in Azerbaijan since Dec.2010, deputy chairman of the Pasha Heyat Company, Niyaz Ismayilov told Trend on Thursday.

Apart from Pasha Heyat, there are two other life insurance companies in Azerbaijan - Ateshgah Heyat and Qala Heyat.

He said there are about 150,000 companies in Azerbaijan likely to become customers of three companies of this type and 60 per cent have already been insured.

"All these companies may be insured until the end of 2012. This depends on the companies themselves. Moreover, new companies, new areas continue to open and that's why this process will not stop. Insurance of the other half is underway, new clients are being invited and contracts are being signed," Mr Ismayilov said.

He said about 10 million manat of additional insurance premiums are available nowadays in the compulsory insurance market taking into consideration current circumstances.

Azerbaijani life insurance companies collected 18.9 million manat of this type in the first year, or 83.81 per cent of fees in the life insurance segment. The market in of Azerbaijan increased 15.45 times from 1.46 million manat in 2010 to 22.55 million manat in 2011.

"Most of the fees on this type were collected by our company, namely 7.8 million manat, followed by Ateshgah Heyat and Qala Heyat. Our company insured about 200,000 people who work in about 1000 companies," Mr Ismayilov said.

He noted the mechanism of legal control functions effectively and there is no need to strengthen it.

Companies may be fined from between 150 to 200 manat for non-conclusion of the contract for compulsory insurance at work in accordance with the Code of Administrative Offences (Article 253.1).

In a case of non-compliance with requirements of the State service on labour inspection under the ministry of labour and social protection of population a company official may be subject to a fine of between 1000 to 2000 manat in accordance with the same Code (Article 318.1)

According to the law, all enterprises and organisations, regardless of the legal form and ownership engaged in entrepreneurial activity without a legal entity must insure their employees against occupational diseases and accidents on the basis of an employment contract or a civil contract.

There are 29 insurance companies and one reinsurance company in Azerbaijan. At the same time Fidan Sigorta Company's licence was suspended.

The official exchange rate is 0.7862 AZN to $1 on Jan.19.