BAKU, Azerbaijan, Nov. 19
By Eldar Janashvili – Trend:
The Compulsory Insurance Bureau, the Azerbaijani Ministry of Emergency Situations, the Real Estate Public Register Service or a third party may equally become the regulators of compulsory real property insurance in 2020, Khayal Mammadkhanli, expert in the Azerbaijani insurance market, told Trend.
“Despite the law on compulsory insurance of real estate has been in force in Azerbaijan since 2011, there is no control over the process and fines are not applied towards individuals,” the expert said.
“The Ministry of Emergency Situations constantly controls and applies fines towards legal entities,” Mammadkhanli said. “The ministry checks the availability of fire systems, evacuation schemes etc., as well as an insurance contract in the facilities.”
“In accordance with the order, as for the individuals, local bodies shall impose fines, but these bodies have never dealt with this,” the expert said. “Moreover, executive bodies do not have the infrastructure that could meet the requirements of the e-mechanism of compulsory insurance, and its installation requires investments.”
“Therefore, it is unknown who will impose the penalties from the next year, after the introduction of the clause related to the insurance in e-registry - Compulsory Insurance Bureau, the Ministry of Emergency Situations, the Real Estate Public Register Service or other state agencies,” Mammadkhanli said.
“The option to transfer these powers to Azerishig OJSC or another utility provider is attractive,” the expert said. “For example, switching off the light, gas etc., would be used as sanctions.”
“Another problem is that the compulsory insurance of real estate applies only to those who have an agreement on the insured property: a bill of sale, a warrant or other document confirming the right to the real estate,” Mammadkhanli said. “The individuals without documents or a bill of sale cannot be insured or fined.”
"In this regard, the Azerbaijani president instructed the state institutions to document all real estate,” the expert said. “The documentation process will take a maximum of a year and then it will be easier to determine who has an insurance policy and who must be fined. The fine may be imposed in one click.”
“Presently, this mechanism is the most optimal in the field of insurance in Azerbaijan to solve not only insurance problems but also documentation tasks,” Mammadkhanli said. “About 100,000 people live in houses without documents in Baku.”
"Another issue is that compulsory insurance in Azerbaijan is necessary because the government annually allocates money from the budget to help those who suffered as a result of accidents, and wants to burden the insurance fund,” the expert said.
“It’s also good for people,” Mammadkhanli said. “Instead of appealing to the department of housing and communal services or the parliament, those who suffered as a result of fire or an earthquake will immediately receive the insurance payment from the insurance company.”
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