Double Increase in Share Capital of Insurers not an End in Itself

The question of raising the minimum capital requirements of local insurance and reinsurance companies has again become topical.

The other day, the Minister of Finance Samir Sharifov said that there are plans to increase the bar from 5 to 10 million manat for insurers and from 10 to 20 million for reinsurance companies. He explained the features of the desire of the insurance sector, linked directly with the public and in need of special supervision. "Financial companies' ability should be sufficient to enable them to provide quality services to the population," he said.

According to the head of one of the active participants in the market, this is done to reduce the number of players in favor of the companies linked to the main bureaucratic resources and centralization of control of financial flows - the obsession of Ministry of Finance. If a year or two ago, insurers saw the salvation of the situation in the diversification of the portfolio, now these measures do not help - the corporate niche has been invaded, and they are not accustomed to work with the population, believes the source of Turan. In his view, it is important to not increase the level of capital, but to provide the efficient use of financial resources - only in the past year, some of the "favorites" of the company spent to act professionally 7 or 8 million and took abroad the same amount of currency in the manat equivalent. - 17D-