compulsory insurance bureau compulsory insurance bureau azerbaijan, baku 2012 tel: (+99412) 595 00...

Compulsory Insurance BureauAzerbaijan, Baku 2012Tel: (+99412) 595 00 20 [email protected] | www.isb.az

Compulsory Insurance Bureau: Responsibilities, Challenges, Priorities

BAKU, 2012

Compulsory Insurance BureauAzerbaijan, Baku 2012

Tel: (+99412) 595 00 20 [email protected] | www.isb.az

COMPULSORY INSURANCE BUREAU: HISTORY OF DEVELOPMENT

On October 8, 2011 the Law of the Azerbaijan Republic «On Compulsory Insurance» comes to force;

On October 19, 2011 State Insurance Supervisory Service with the participation of 6 insurance companies holds the constituent assembly of Compulsory Insurance Bureau ( CIB )

On November 29, 2011 CIB passes the state registration with Ministry of Justice as an Union of Legal Entities

On December 06, 2011 CIB is registered by the Ministry of Taxes

On December 16, 2011 The first MTPL is issued by means of information system of CIB.



PRIMARY MISSION OF CIB

• protection of interests of insured persons and third parties suffering damages and losses

• stabilization and development of the compulsory insurance system and fulfillment of duties prescribed by the Law of Azerbaijan Republic “On Compulsory Insurance”



PRIMARY FUNCTIONS OF CIB

The CIB shall carry out the following key functions stipulated by the Law:

coordinate activities of CIB participants (hereafter: participants)

represent and protect interests of participants when interfacing with local and international organizations

provide recommendations and initiate adjustments to the legislation and practical procedures associated with types of compulsory insurance

development and application of guidelines for technical expert examinations in relation with investigation of claim-cases and assessment of damages

PRIMARY FUNCTIONS OF CIB

provide compensation payments to third persons, injured on road accidents

ensure availability, stable usage of an electronic information system and its

integration with other electronic information systems;

availability and centralized control of compulsory insurance certificate forms

as per provisions of the same law

REQUIREMENTS FOR CIB PARTICIPATION

• obtain preliminary consent from State Insurance Supervisory Service

• install Participation fee ( 200 000 AZN)

• install Security Deposits as follows:

– Real estate (100 000 AZN)

– third party liability associated with the use of the real estate (100 000 AZN)

– third party liability of owners of motor vehicles (200 000 AZN)

– personal accident insurance of passengers (200 000)



At present the register of participating insurers of bureau already includes 12 insurance companies

CURRENT CIB PARTICIPANTS

1. OJSC «АTƏŞGAH» INSURANCE COMPANY

2. OJSC «STANDARD INSURANCE»

3. OJSC «АТАSIĞORTA»

4. OJSC «XALQ SIĞORTA»

5. OJSC «PAŞA SIĞORTA»

6. OJSC INSURANCE COMPANY «AXA MBASK»

7. OJSC «AZSIĞORTA»

8. OJSC «ALFA SIĞORTA»

9. OJSC “MEQA SIĞORTA"

10. Commercial State Insurance Company of the Republic of Azerbaijan

11. OJSC "İPƏK YOLU SIĞORTA“

12. OJSC “AZƏRBAYCAN SƏNAYE SIĞORTA“



CIB FUNDS & RESOURCES

• compulsory payments made by participants

• monetary funds raised from debt securities issued by the Bureau

• incomes derived as a result of direct investment by the CIB

• funds received from grants, donations or other sources not prohibited by the legislation

• borrowed funds received to cover lacking amount for compensation payments

• funds received by exercising the subrogation right



INVESTMENT PORTFOLIO

INVESTMENT PORTFOLIO - 6,4 MILLION AZN*

THE AVERAGE PROFITABILITY - 8 % PER ANNUM

THE SUM OF GUARANTEE DEPOSITS – 4,6 MILLION AZN*

*As of June 01 2012



TYPES OF COMPULSORY INSURANCE

COMPULSORY PERSONAL ACCIDENT INSURANCE OF PASSENGERS

COMPULSORY REAL ESTATE INSURANCE

COMPULSORY THIRD PARTY LIABILITY INSURANCE ASSOCIATED WITH THE USE OF THE REAL ESTATE

COMPULSORY THIRD PARTY LIABILITY INSURANCE OF MOTOR VEHICLES




Compulsory Real Estate Insurance is used to compensate losses that are caused by damages, destruction or any kind of loss of the real estate caused by fire or other natural disasters.The following types of real estate property are subject to compulsory insurance:

- residential and non-residential premises

- residential houses

- industrial buildings

- apartments




Settlement Location Amount of Insurance franchise Insurance Premium

Baku 25.000 250 50

Ganja, Sumgait, and Nakhichevan 20.000 200 40

other locations 15.000 150 30

Real Estate Insurance premiums to be paid on houses and apartments belonging to individuals (AZN)

* Real Estate Insurance premiums to be paid on non-residential as well as industrial premises are subject to calculation based on the guidelines developed by the Ministry of Finance



COMPULSORY THIRD PARTY LIABILITY INSURANCE OF MOTOR VEHICLES

Individuals (AZN) Legal Entities (AZN)

CARS AND OTHER VEHICLES MADE ON THEIR BASE min 50 - max 250 min 60 - max 300

LORRIES AND OTHER VEHICLES MADE ON THEIR BASE min 150 – max 250 min 180 – max 240

MINIBUSES, BUSES AND OTHER VEHICLES MADE ON THEIR BASE; min 150 - max 200 min 180 – max 300

MOTORCYCLES AND MOTOR SCOOTERS 50 60

TRACTORS, THE VEHICLES USED IN ROAD-BUILDING WORKS, WOOD AND RURAL FARMS 50 60

TROLLEYBUSES AND TRAMS 100

For vehicles registered abroad entering the Azerbaijani Republic for the purpose of transit (for one month) – coefficient 0.25



COMPULSORY THIRD PARTY LIABILITY INSURANCE ASSOCIATED WITH USE OF REAL ESTATE (Real Estate TPL)

Real Estate TPL provides insurance coverage for damages caused to health and property of third parties as a result of use of the relevant property, as well as while carrying of construction, repair, reconstruction or other works within the territory of such property.

The following types of real estate property are subject to compulsory insurance:

• Buildings, constructions, premises• Facilities and areas being used by legal entities for the purposes of their operations, as

well as by physical persons engaged into entrepreneurial activities without the creation of the legal entity for their activities

• Real Estate TPL premiums to be paid on non-residential as well as industrial premises are subject to calculation based on the guidelines developed by the Ministry of Finance



COMPULSORY PERSONAL ACCIDENT INSURANCE OF PASSENGERS (Passenger Insurance)

• Passenger Insurance is used for the purpose of securing a compensation for damages caused to health and life of passengers travelling by air, water, railway or automobile transport

• the insurance amount per passenger in a vehicle - 5000 AZN



COMPULSORY INSURANCE - MARKET DEVELOPMENT HISTORYinsurance premium history by type

MTPL 115 500 2 040 218 3 173 264 5 930 665 9 039 539 8 921 170

Real Estate 150 278 443 524 359 625 714 702 752 940 695

Real Estate TPL 30 17 110 22 240 20 468 19 146 222 024

Passenger Insurance 0 0 0 0 0 52 052

Dek Jan Fev Mar Apr MayAZN 0

AZN 1,000,000

AZN 2,000,000

AZN 3,000,000

AZN 4,000,000

AZN 5,000,000

AZN 6,000,000

AZN 7,000,000

AZN 8,000,000

AZN 9,000,000

AZN 10,000,000

20122011



COMPULSORY INSURANCE MARKET STRUCTURE

MTPL 29 220 355,25 AZN

REAL ESTATE - 3 072 112,6 AZN

REAL ESTATE TPL - 301 017,91 AZN

PASSENGER INSURANCE- 52 052 AZN

*As of June 01 2012



INDICATORS OF COMPULSORY INSURANCE MARKET DEVELOPMENT

TOTAL AMOUNT OF COMPULSORY INSURANCE PREMIUMS

RECEIVED TO DATE: 32,646,000 AZN

SINCE THE DATE - THE LAW “ON COMPULSORY INSURANCE” CAME INTO

FORCE – A TOTAL OF 426,174 CONTRACTS OF COMPULSORY INSURANCE

HAS BEEN ISSUED BY 11 PARTICIPANTS OF BUREAU

*As of June 01 2012



«CIB INFORMATION SYSTEM»

CIB information system has been developed in accordance to the provisions of the Law “On Compulsory Insurance” and has the following goals:

• centralized system of policy issue & registry

• centralized depository of claim associated documentation

• automatic system of bonus-malus calculation and associated premiums

• centralized database of insured persons and vehicles

• facilitate statistics and reporting information



MTPL POLICY STATUS NOTIFICATION

From March 13, 2012 subscribers of "Azercell", «Azerfon» and «Bakcell» may query the Compulsory Insurance status of each vehicle by sending an SMS to a short number of 9707.

SMS must contain one of the following:

• state registration plate number of vehicle• MTPL policy number

The system will provide with the following information in return:

• Validity of insurance policy (TRUE or FALSE)• Name of insurance company issued the policy• Emergency contact numbers of associated insurance company

MTPL policy status or status of vehicle may be also checked at CIB website - www.isb.az - in a special “Check Your Policy” section

http://www.isb.az/



MTPL CLAIMS

Damage to property

Damage to vehicles

Death of the person

Damage to health TOTAL

Quantity 11 312 1 1 325

Amount Paid 20991.8 AZN 448707.7 AZN 5000 AZN 250 AZN 474949.5 AZN

*As of June 01, 2012

Note: As per official statistics, covering period of January-May, 2012 - there were 1035 road accidents, which resulted in 313 victims, and 1144 injured persones.



COMPENSATION TERMS

Compensation shall be covered by CIB in the following cases:

• in case an insurer is not able to meet its obligations due to its insolvency;

• in case of a third person’s injury by an unknown motor vehicle;

• in case of a third person’s injury as a result of use of a vehicle operated by a

person, who had no compulsory insurance agreement for civil liability of

owners of vehicles

(provided that, despite a claim being put forward by a victim against the owner of the car

to remedy the damage, this claim was not satisfied)



AMOUNT OF COMPENSATORY PAYMENTS

Amount of compensations to third persons injured at a road accident

• 5000 AZN in case of death of the individual

• 4000 AZN for the I group of disability

• 3000 AZN for the II group of disability

• 2000 AZN for the III group of disability

• 1500 AZN receiving heavy injuries without disability assignment

• 250 AZN receiving slight injuries



DEVELOPMENT PERSPECTIVES

Integration of electronic information system with information systems of the Ministry of Internal Affairs, State Traffic Police, State Migration Service and the Ministry of Taxes.

Inclusion of other types of compulsory insurance into CIB information system

Deployment of Bonus-Malus system is planned at the beginning of 2013

Ensuring integration of electronic information system with electronic information systems of CIB participants and full transition away from operating via Web Interface

The conclusions of contracts on compulsory insurance on electronic carriers without use of paper forms

Entry of the Azerbaijani Republic into system “Green card”



THANK YOU

compulsory insurance bureau compulsory insurance bureau azerbaijan, baku 2012 tel: (+99412) 595 00...

Documents

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