Azerbaijan, Baku, July 9 / Trend A.Akhundov /
The recent decision of the State Insurance Supervision Service under the Azerbaijani Finance Ministry to eliminate the rights of insurance company Alfa Sıgorta to work on compulsory insurance of liability of owners of motor vehicles (CTP) will be the signal for the other Azerbaijani companies engaged in compulsory types of insurance, executive director of the Azerbaijani Association of Insurers Azer Aliyev told Trend on Monday.
"The big problem of the insurance market today is higher commissions. Some insurers manage to pay the mediator up to 30 per cent of the commission and this is excluding the cost of doing business. This may in future be a threat to financial stability of the company. The decision of the State Insurance Service for Alfa Sıgorta will be a good warning for other companies," Aliyev said.
The State Supervision Insurance Service told Trend on Monday that the Service continues measures on supervision over following requirements of the law firms.
"In practice we are faced with the fact that insurance companies, along with the insurance policy for CTP, offered some discounts, gave fire extinguishers, first aid kits and so on. Cases of large commission payments were recorded. Under the law on compulsory insurance types, such benefits are not provided. The maximum limit of commission payable to intermediaries is set by law at 15 per cent," the state service said.
Permission to Alfa Sigorta on CTP was revoked on July 3 due to numerous violations during the work on this type of compulsory insurance, the State Insurance Supervision Service said.
Insurance company Alfa Sigorta will continue to fulfil its obligations on policies of the compulsory insurance of liability of owners of motor vehicles, the head of the State Insurance Supervision Service, Namig Khalilov, told reporters earlier.
He said the company may apply for restoration of permission only after six months. At the same time, he said the company will continue to work on compulsory insurance of real estate and related liability.
The company was included in the registry offices of compulsory insurance on January 23. Then, in addition to compulsory insurance of liability of car owners, the company received permission to provide services for compulsory insurance of immovable property and liability insurance in the operation of real estate.
The founder of Alfa Sıgorta is local Texnikabank, which bought 100 per cent of the company in December 2006. Alfa Sıgorta is licensed to provide 30 kinds of insurance services, including six compulsory and 24 voluntary types of insurance.