Bureau on compulsory insurance prefers local banks in Azerbaijan
Azerbaijan, Baku, Feb. 22 / Trend A.Akhundov /
The compulsory insurance bureau was established in Azerbaijan in December last year in accordance with the requirements of the new law on "Mandatory types of insurance". It considers it appropriate to place its funds in deposit accounts of local banks at this stage, the Bureau told Trend on Wednesday.
"Four million manat, accumulated in the bureau, are placed in deposit accounts of local banks," the bureau said. "The proposals of banks were studied. The board of trustees chose eight banks, where these funds were placed. They were chosen on different criteria - for bank stability, rating, share on the market, as well as on the proposals (interest rates, etc.)," the bureau said.
After the investment portfolio of the bureau increases, the funds will be placed in the new tools. It is theoretically possible to place the funds in foreign markets, the bureau said.
"At present, the domestic market is more attractive in terms of the investment policy," the bureau said. While it allows mastering the funds, they will be placed on the domestic market. It is also possible to invest these funds in other tools in the domestic market. They are state short-term bonds and so on. At present, these variants are not considered, as the deposit portfolio has not increased to the amount when it is necessary to use these tools."
Till the portfolio reaches 10 million manat, other tools will not be considered.
"It will certainly be possible next year," the bureau said.
According to a source, it may be required to attract external managers to manage the bureau's funds in case of frequent increase in the portfolio.
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, Standard Insurance, AzSıgorta and Alfa Sigorta are the members of the bureau.
Insurance companies Atesgah Sıgorta, Xalq Sığorta and Standard Insurance, as well as two representatives of the Ministry of Finance, Head of Tax Policy, who are heads of legal and tax department, are elected as board trustees.
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.
There are 29 insurance companies and 1 reinsurance company in Azerbaijan. At the same time the insurance license of the Fidan Sığorta Company was suspended.
The official exchange rate is 0,7864 AZN/USD on Feb. 22.