Compulsory insurance of shares in building cooperatives to be introduced in Azerbaijan

Business Materials 11 March 2013 14:22 (UTC +04:00)

Azerbaijan, Baku, March 11 /Trend A. Akhundov/

The Ministry of Finance of Azerbaijan has prepared a bill on amendments to the Housing Code aimed at provision of housing construction insurance, a government report on the results of 2012 says.

The bill has been prepared and is now being improved considering suggestions and remarks of the respective bodies.

'Improvement of the bill will soon be completed', the report says.

Amendments to the law contain provisions for compulsory insurance of a buyer's share in building cooperatives, the State Insurance Supervision Service of the Ministry of Finance informed Trend.

"Facts on the violation of participants of building cooperatives rights including resale of their shares are now being observed. To avoid such cases it was suggested this type of insurance was offered. The law will allow recompensating losses of those who suffered from fraud and other factors," the State Insurance Supervision Service announced.

Actuality of this kind of insurance was mentioned in parliament during the discussion of the government's report on the results of 2011.

The list of risks covered by compulsory real estate insurance in Azerbaijan has increased since late 2011. According to the law 'on compulsory insurance types 'that started to be implemented on December 16, 2011, apartments of individuals and domestic homes are subjected to compulsory insurance. Insurance cases include damage caused by fire, explosion, thunderstorm and short circuit, breakdowns of sewage and water supply systems and natural disasters.

The minimum compensation limit was established to provide social security for the population: of 25000 AZN for Baku, 20000 for Ganja, Sumgayit and Nakhchivan, and 15000 for other regions. Compulsory insurance for addressed social aid recipients will be provided from the state budget.

Official exchange rate on March 11 is 0.7849 AZN/USD