Azerbaijan, Baku / Trend corr U. Ismayilova / The increase of capitalization of insurance companies will stimulate the extension of insurance market in Azerbaijan, the Deputy President of the Azergarant insurance company, Shukur Huseynov, said on 4 June.
The head of the State Insurance Control Department at the Azerbaijani Finance Ministry, Khalaf Khalafov, reported on 4 June that the Ministry had worked with insurance companies that have experienced problems with the capitalization in order to make them expand their statutory capitals. "Ultimately, the companies will not last if they do not raise the capital to the required level," Khalilov said.
In 1 January, 2007 the statutory capital of insurance companies made up AZN 700,000 and is to be raised by AZN 1mln by the beginning of 2008. Since 1 January, 2010 the statutory capital must reach AZN 3mln. "Expansion of statutory capital does not mean shutting down a company. That would involve the fusion of two or more companies and changes of the property form from closed joint-stock company to open joint-stock, which will draw additional capital," he said.
Azergarant, operating since 1993, was issued a license on 25 forms of insurance products, with 3 of them being obligatory.
Twenty-nine insurance companies are operating Azerbaijan, with seven of them having AZN 700,000 statutory capital.