Azerbaijan, Baku, Nov. 28 / Trend A.Akhundov /
The State Insurance Supervision Service under Azerbaijani Ministry of Finance considers current capitalization level of the insurance market to be sufficient, the head of agency Namig Khalilov told reporters.
"At this stage of Azerbaijani insurance market's development, the capitalization of insurance companies is quite sufficient. The capital improvement program will be completed next year, the minimum requirement will be increased to five million manats. After some analysis, next steps will be proposed to us in this direction," Khalilov said.
According to him, the decision on raising the minimum capital of the insurance market in the next three years will be made by the end of next year.
According to current law, starting January 1 2013 capital of insurance companies in Azerbaijan cannot be less than five million manats, reinsurance companies - ten million manat.
Since January 1 2011, the minimum capital of insurance companies was set at three million manats, reinsurance - six million manats, starting 2012 - at four and eight million manats respectively.
Earlier State Insurance Supervision Service under the Ministry of Finance reported to Trend that significant improvements in the requirements for minimum capital of insurance companies are not expected in Azerbaijan.
Some 28 insurance companies and one reinsurance company are currently operating in Azerbaijan.
"The requirements are defined in accordance with the situation in the market and at a level that can meet by the market players," the agency reported.
Unlike the banking sector, significant improvements in the requirements to level of capital are not on the agenda in the insurance market.
According to CBA Board decision as of July 25, the requirement to the minimum total capital of existing banks and the capital of newly established banks increased from current 10 million manat to 50 million manat. The new regulation for the minimum total capital of existing banks will take effect on January 1, 2014.
Many experts, including the international rating agency Moody's Investors Service, expect serious reduction in the number of Azerbaijani banking system participants.
The official exchange rate on November 27 is 0.7849 AZN / USD.