After in July 2010, Azerbaijani President Ilham Aliyev approved the law on compulsory insurance on labor ability loss in production, the topic of insurance of workforce gained urgency not only in words, but in deeds. Not only insurance companies, which in this regard have seen the growth of prospects of the insurance market, moved to this activity, but also the employers are willing to work in harmony with the laws of the government. By the way, the industrialized countries have long recognized that professional injuries, diseases and the overall incidence of workers can not be companions of business, economic and social development of the state and it has been proven by the practice. It is estimated that every dollar invested in improved working conditions can save almost $5.
Currently, there are three companies involved in life insurance in Azerbaijan - Atesgah Heyat, Qala Heyat and PASHA Heyat, who have the permission to compulsory insurance accidents in production. PASHA Heyat received a license for insurance activity on Feb. 14, 2011. According to estimates to the State Labour Inspection Service under the Ministry of Labour and Social Protection, at least 1.5 million employees of about 400,000 employers must be insured. Expected premiums are estimated at 30-40 million manat.
The presence of such a small number of so-called life-companies in the insurance market in Azerbaijan has its own explanation. The fact is that the life insurance still occupies in the insurance market the share of not more than one-half percent, and was therefore not developed as an insurance product. The reasons for this were many, ranging from mistrust of the Azerbaijani population in this type of insurance, originating in ignorance of this service, from a lack of professional staff of this type of insurance to provide the market with interesting and quality products for life insurance up to the peculiarities of local mentality. Unfortunately, to protect the life of our citizens are thinking only after the protection of property. Meanwhile, the life insurance market in the global insurance market makes up 60-70 percent of the total market.
The total amount of premiums of all insurance companies of Azerbaijan on life insurance in January 2011 amounted to 125,326 manat (0.7 percent of total fees) under payments of 3,460 manat (0.09 percent). The total amount of premiums of all companies operating in the country amounted to 17.939 million manat in January, and payments - 3.522 million manat. Totally 28 insurance and one reinsurance company operate in Azerbaijan.
Now, according to the law, the situation has become compulsory. The Labour Inspectorate of the Ministry of Labour and Social Protection of Azerbaijan has been conducting inspections in the enterprises of the country on a compulsory insurance from accidents of workers since February. Thus, the Labour Inspectorate in February monitored some 400 production facilities in Baku and regions with regards to the introduction of compulsory insurance from labor ability loss in production. Deputy Chief Labour Inspectorate Maharram Maharov said in the first months, monitoring, inspection is mainly carried out to enlighten employers and employees, and provided recommendations on the use of the new kind of insurance services. "For this reason, no penalty was introduced in February.
Inspectors conduct daily monitor 5-10 production facilities in the capital and in regions with regards to the existence of compulsory insurance.
Maharov said after inspectors reveal facts of failure of any enterprise to conclude the agreement on compulsory insurance from labor ability loss in production, their coordinates will be transferred to the insurance companies that provide services for this type of insurance. After that, the company will offer its services to these enterprises.
According to the primary monitoring results, today most of the enterprises, which were monitored, have not yet insured their workers.
The main goal to adopt compulsory insurance of employees is to reduce accidents in production.
For comparison, in Azerbaijan, in 2010, there had been recorded 69 facts of death, with 31 in the construction sector, in 2007 - 259 accidents, 128 facts of death, 202 facts of injury, in 2008 - 255 accidents, 79 deaths and 212 facts of injury, in 2009 - 250 accidents, 69 deaths and 218 injuries.
According to the World Labor Organization, the accidents at work kill 2.3 million people each year worldwide, three times more people are injured.
The Ministry of Labour has appealed to Parliament with a proposal to increase the amount of penalties for employers in the absence of employees' insurance up to 3,000 manat from 1,200 manat in accordance with the Code of Administrative Violations.
It is envisaged that the introduction of this type of insurance services will significantly reduce the number of accidents due to the requirements of the insurance contract, which requires introducing the rules of technical safety.
The head of State Insurance Supervision Service under the Finance Ministry of Azerbaijan Namik Khalilov said the introduction of compulsory insurance from labor ability loss in production will improve the social development and welfare of the workable parts of the country. "It will also reduce the number of lawsuits between workers and employers on the non-payment of compensation."