Azerbaijan, Baku, Feb. 3 / Trend A. Akhundov /
Azerbaijani insurance company Pasa Sıgorta plans to begin rendering the services on the insurance of managers' liability for the first time in the insurance market of the country in 2012, the chairman of the board of the company Nofel Rzayev told Trend today.
"Perhaps, we will begin offering a new product to Azerbaijani large joint stock companies - insurance of managers' liability while making this decision. There is the opportunity that we will offer this to two major organizations and sign the policies this year."
He said that there is great interest in this type of insurance in Azerbaijan.
"This is a very interesting type of insurance, which is popular in Europe," he said. "Its insurance policy has not been signed in Azerbaijan yet."
Directors 'and officers' liability insurance, D & O compensates the losses of the heads of the companies. They have arisen as a result of presenting the claims / lawsuits by third parties on the facts of mistakes made by managers in their activity. The executive directors, members of the board of directors and supervisory boards, including the independent directors are subject to the insurance. An insurance policy reimburses a damage made by a director's actions, who is obliged to compensate it within the civil legislation and legal defense costs.
There are many grounds for claims:
- Poor management and control;
- Poor quality of decisions / lack of due diligence when making decisions;
- Errors, inaccuracies or incomplete disclosure of the information, made in the financial statements, investment declarations and prospect of emission;
- Imprudent investments, including a mistaken policy on mergers and acquisitions;
- Improper assessment of investments and transactions;
- Procurement without tender;
- Failure to comply with the order of large transactions and transactions in which there is an interest;
- Embezzlement of the company's funds;
- Use of insider information;
- Violation of the antimonopoly legislation;
- Violation of labor legislation: wrongful dismissal of employees, race, age, gender or any other discrimination.
The shareholders, employees, contractors and state agencies mainly make claims against directors of companies.
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 authorized capital amounts to 30 million manat. Pasa Sıgorta is a leader in terms of the capitalization volume in country's insurance market.
The official exchange rate is 0.7863 AZN/USD on Feb. 3.