ISB Report for Last Year

The Bureau of Compulsory Insurance (BCI) has reported (http://isb.az/images/reports/Annual%20report.pdf) on financial performance in the past year.

Its assets (including long-term ones) as of 31 December 2012 amounted to 11 million 357.57 thousand manats. Most of them were short-term (8 million 252.93 thousand manats) assets.

Among the obligations there were long-term financial commitments to its partners - 7 million 172.88 thousand manats, for comparison - short-term liabilities amounted to 96.02 million manat.

Financial reserves of the Bureau up to January 1, 2013 were 4 million 88.67 million manat.

BCI was established in the law "On mandatory types of insurance" and the start of operations in December 2011. Members of the Bureau are currently 11 insurance companies operating in Azerbaijan.

The main function of the Bureau is the implementation of compensation, management of certain financial fund, which will be produced by means of the payment of compensation.

The financial resources of the Bureau are formed from several sources. First, it is an entrance fee payable by the insurers to start the Bureau. Second, insurers do security deposit for each type of compulsory insurance, which they want to do. Third, 5% of the total premiums for compulsory insurance should be transferred monthly to the Bureau.

Bureau members at the moment are 11 companies: Azersigorta, AXA MBASK, Ateshgah, Xalq Sigorta, Standard Insurance, Pasha Sigorta, AzSigorta, Mega Sigorta, Ata Sigorta, Ipek Yolu Sigorta and Azerbaycan Senaye Sigorta. The company Alfa Sigorta was deprived of its license by the Ministry of Finance for alleged violation of terms of the preparation and submission of documentation.

BCI was established in the implementation of the law "On mandatory types of insurance. Primary income comes under the civil liability of owners of vehicles (CTP). Regarding this species in central European law provides for a maximum level of proven payment for damage to the health and life of one case of the accident is 50 000 manats (with four passengers and a driver), the damage of one individual - 5 000 AZN. Damage of the car, too, is compensated at the rate of five thousand manats.

By law, cases of non-payment of CTP insurance are not provided. Passenger or pedestrian is injured in action even drunk, escaped from the scene or has committed an intentional accident the driver, and the driver for driving without a license (if he was the owner of the vehicle) is entitled to receive compensation. Another thing is that entities responsible for a traffic accident shall be liable for the commission of an unlawful act.

The basic cost of auto insurance at the rate of 1.5 million cubic centimeters (on the cases of CTP) is 50 manats. With the increasing volume of the engine used a factor of 1.5 (up to 5 thousand centimeters cubed) and 5 (5 or more thousand centimeters cubed).

Increase in the base price also regards passenger transport and high tonnage trucks. However, the increase in the price of "large-caliber" buses has not affected the fares for passengers yet. 

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