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What factors damage Azerbaijan's insurance market?

Finance Materials 29 July 2020 17:55
What factors damage Azerbaijan's insurance market?

BAKU, Azerbaijan, July 29

By Eldar Janashvili - Trend:

The illegal increase of commission fees by companies in Azerbaijan is one of the most important factors damaging the country's insurance market, the Azerbaijan Insurers Association (AIA) told Trend.

The AIA noted that after the appointment of a supervisory authority, the Central Bank of Azerbaijan (CBA) focused on preventing illegal increases of tax from the Compulsory Insurance Commission (NVSMIS and Real Estate).

“To this end, the CBA held a joint meeting with the AIA, and insurance companies were instructed to reduce commissions to 15 percent established by law as soon as possible. However, this process has not fully been completed,” the association said.

“In May 2020, the CBA revoked the license of a standard insurance company operating in the Azerbaijani insurance market. The termination of the company's activities depended on many reasons, one of which was the introduction of high interest rates for many years,” the AIA noted.

“High commission interest rates are a negative phenomenon for companies, and for this reason some companies operating in Azerbaijan have partially reduced interest rates to the limit. However, there are still companies that abuse it,” added the association.

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Follow the author on Twitter: @eldarjanashvili

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