International Bank of Azerbaijan Ceases Activity of InterProtect Re AG Reinsurance Company
Azerbaijan, Baku / corr. Trend I.Khalilova / The Executive Board of the International Bank of Azerbaijan has made a decision to terminate the activities of the daughter company of International Insurance Company in Zurich, Reinsurance Company InterProtect Re AG, a source of the bank stated.
The necessity to make such a decision appeared due to Swiss Parliament increasing its requirements for authorized capital of the reinsurance companies functioning in the Country. Since 1 January, 2007 the authorized capital has been increased up to CHF 5 mln (as of 7 May - 1 CHF equals AZN 0.7139). InterProtect Re AG was created two years ago, with authorized capital in amount of CHF 1.2 mln. "The problem is that according to the Azerbaijani legislation, the capital of the daughter company should not exceed 20% of the authorized capital of the mother company. Therefore the existence of the reinsurance company of the International Insurance Company in Zurich is contrary to the legislation," the same source stated.
However, according to the audit of the international audit company, the activities of InterProtect Re AG were profitable. InterProtect Re AG was created at 100% participation of the International Insurance Company which is fully owned by International Bank of Azerbaijan.