Gov't to set stringent rules for insurance intermediaries
By Amina Nazarli
Azerbaijan will set more stringent rules to regulate the activities of intermediaries in the insurance market.
This remark was made by Azerbaijani Finance Minister Samir Sharifov at the 6th Azerbaijan International Insurance Forum (AIIF) held in Baku on July 2.
“In many cases, the good work of insurance companies is undermined and discredited by the work of insurance intermediaries (insurance agents and brokers),” the minister believes.
Sharifov said insurance companies should not think of increasing
their revenues through the provision of poor quality services to
consumers.
”Insurance companies should pay more attention to working with
consumers and protecting their rights,” he stressed.
In this regard, the Finance Ministry sent a request to the State Insurance Supervision Service to develop a plan of action to optimize consumer protection.
“We have approved a number of steps to improve the regulation of insurance intermediaries. They have to build friendly relationships with their customers, which should not be undermined by the poor quality services rendered by intermediaries,” the minister said, adding that work on this issue is underway.
A total of 26 insurance and one reinsurance company are operating in Azerbaijan. The country has 950 insurance agents, 60 of which are legal entities, while the remaining 890 are individual persons.
Earlier, Orkhan Bayramov, the head of the Insurers Association noted that the country will prepare a “black list” of insurance intermediaries, informing about unreliable insurance intermediaries having a large receivables to customers, providing false information.
According to Bayramov, to include an intermediary on the black list, it is necessary to provide specific evidence to support any claim of unfair practices.
Earlier in April this year, the Taxes Ministry announced that insurance intermediaries should pay a 20 percent income tax. This is due to the fact that the activities of insurance intermediaries are considered as entrepreneurial just like the activities of insurance and reinsurance companies.
In accordance with the Tax Code of Azerbaijan insurance companies, including insurance intermediaries, are not able to pay the simplified tax. A legal entity engaged in entrepreneurial activities pay corporate tax, whereas individual person would pay income tax.
Furthermore, insurance and reinsurance companies, as well as insurance agents and brokers are exempt from value added taxes (VAT).
During the 3rd National Forum of Insurance Agents held in Baku in April, a number of insurance agents had expressed dissatisfaction with the fact that the Ministry of Taxes requires them to pay 20 percent in income taxes instead of the four percent simplified tax.
Insurance agents have asked the State Insurance Supervision Service under the Finance Ministry and the Azerbaijan Insurers Association to help them resolve this issue and retain their right to pay the four percent tax.
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Amina Nazarli is AzerNews’ staff journalist, follow her on
Twitter: @amina_nazarli
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