Azerbaijan, Baku, 20 June / Trend A.Akhundov /
The Ministry of Finance of Azerbaijan will double its requirement for the minimum level of aggregate capital of insurance and reinsurance companies, the Minister of Finance Samir Sharifov said during the fourth International Insurance Forum in Baku.
In the coming years, the ministry plans to increase the capital requirement of insurance companies from five to 10 million manat. Accordingly, the capital requirement for reinsurers will be increased from the current 10 million manat to 20 million manat.
According to the minister, this increase of the requirements will not cause serious problems for the companies.
"The insurance sector is specific as it relates to the general population. From this point of view we should pay special attention to the supervision of the industry. The financial capacity of market participants should be sufficient to provide quality services to the public and ensure full and timely payments," Sharifov said.
However, according to him, measures to tighten regulatory requirements will be undertaken in stages for the market's development.
"In 10 years, the capitalisation of the insurance market has grown 16-fold and the income of insurance companies 17.5-fold. In 2002-2013, the minimum capital requirement for insurers increased from one million manat to five million manat, resulting in strengthened financial sector stability. The total capital of all insurance companies in the country has increased from 18.4 million manat to 300 million manat. Net income of the companies increased to 48 million manat during this period," Sharifov said.
The total capital of the insurance market amounted to 343.44 million manat last year including a paid-up share capital of the market at 294.06 million manat and other capital reserves at 49.39 million manat.
There are 28 insurance and one reinsurance companies functioning in Azerbaijan.