The statutory capital of the insurance companies must be brought closer to the capital of banks, Avaz Alakbarov, the Finances minister, told Trend. Following rise in the minimal amount of statutory capital of insurance companies the Ministry of Finances now is involved on designing new proposals. In accordance with the existing program in increase of the statutory capital in the insurance companies, by 2010 it must be increased to 5bn manats (1m AZN), whereas at banks the requirement is set for the aggregate capital, which is to comprise 10m AZN by 2008, Trend reports quoting the Finance Minister. The Ministry of Finances has great hopes for in 2005 in connection with the increase of the insurance market.
"Now I dont want to say on which volume of capital and what terms of implementation of requirements we will claim at. At present we conduct calculations in this direction. Moreover, we dont want to evolve problems for insurance companies in issues of increase of requirements to the capital," Alakbarov noted.
The minister also touched upon the problems in the insurance market, with special accent on unfair rivalry among the insurance companies, violation of rights of conclusion of insurance agreements and implementation of insurance payments, as well as refusal from insurance payments.
To remove all negative factors the Finances Ministry plans to hold inspection within the insurance companies. At present the inspection is carried out at the companies Azergrant and Absheron. The Ministry of Finances received complaints concerning the activities of Birlik company.
As to new appeals for issue of licenses for insurance activities, they have not been submitted. Today there are 28 insurance companies in the country, including 3 joint stock companies.
The minister hopes that the legislation in the sphere of insurance will be improved shortly and accounts on the adoption of the draft law on Insurance in the new edition in 2006.