Azerbaijan, Baku, Dec.10 / Trend, A.Akhundov /
The reforms in Azerbaijan's insurance markets will allow for increasing the stock of assets in the local capital market over time, the Transition Report 2012 of the European Bank for Reconstruction and Development (EBRD) says.
The law 'on compulsory insurance' regulating the principles and basis for mandatory insurance came into force in September 2011. In November 2011 the authorities established a Compulsory Insurance Bureau with the purpose of stabilisation and development of the system of compulsory insurance and fulfilment of duties as prescribed by the law
'These reforms are expected to increase the size of the insurance market and over
time increase the stock of assets in the local capital market', the report says.
EBRD said that a fivefold increase in requirements to banks' capital also affects Azerbaijan's capital market development.
According to the CBA board's decision dated July 25, the minimum total capital of existing banks and authorised capital of newly established banks increased from the current 10 million manat ($12.7 million) to 50 million manat ($63.7 million). The new requirement for the capitalisation of the existing banks will come into force from January 1, 2014.
'"The new norms should help strengthen the capital position of Azerbaijani banks', the report says.
There are 43 banks, 28 insurance and a reinsurance company in Azerbaijan.