Commission set up to deal with insurance complaints
By Nigar Orujova
Azerbaijan has set up a commission to deal with complaints in connection with problems associated with insurance payments.
Mushvig Israfilov, the deputy head of State Insurance Supervision Service under the Finance Ministry announced about this at the third National Forum of Insurance Agents in Baku on April 6.
He said the number of complaints vis a vis the activities of insurance companies has grown recently.
The Presidential Administration has received many complaints about the fact that insurance companies do not honor their payment responsibilities he noted. Currently this issue is under the control of the Finance Ministry and President Administration.
The Commission, chaired by Israfilov, will receive visitors every Wednesday from 15:00 to 17:00. Anyone will be able to register a complaint in connection with the activities of insurers or submit their suggestions for improving their performance.
However, he stressed that overall only 20 percent of complaints against insurance companies are reasonable.
"A meeting with representatives of seven major insurance companies will be held tomorrow, in which we will discuss this issue," he added.
Israfilov said the work of the commission will be summarized a few months later. Then it will be decided, in what format it will continue its activities in the future.
The official further said that Azerbaijan revoked licenses for 46 insurance agents since 2014, adding that 81 agents had their licences suspended for six months.
Despite the fact that more than 900 insurance agents are registered in Azerbaijan, many of them do not actually operate, he noted. Many have actually failed to notify the state they no longer operate.
"Insurance agents are required to submit a quarterly report on their activities. Unfortunately, not all do that. To date, only about 800 insurance agents have reported their results for the third and fourth quarters of 2014, but more than 100 - have not reported yet," he stressed.
According to Mahir Abdullayev, department head at the State Insurance Supervision Service, the number of insurance agents in Azerbaijan increased by almost five times, from 201 in 2009 to 950 in 2014.
He noted that of the 950 insurance agents only 60 are legal entities, the remaining 890 being individuals.
Abdullayev further noted that the main problem remains the commission fees insurance agents receive for selling compulsory insurance.
"The amount of commissions for compulsory insurance is strictly limited, but some companies continue to encourage agents by larger rewards. This is one of the major problems in the activities of insurance agents," he said.
Touching to the problem of so-called "sub-agents" he said there is no such thing in the Azerbaijani legislation. Some agents give out insurance forms to their family and friends in order to increase sales. This phenomenon must also be suppressed, he added.
Head of State Insurance Supervision Service, Namiq Khalilov said the adjustment of the manat rate did not cause a rise in the price of insurance services in Azerbaijan.
At the same time, he said that the devaluation did not affect the financial stability of insurance companies existing in the country.
In February, Azerbaijan Central Bank set the manat at 1.05 against the USD, compared to 0.78 earlier. The move aims to strengthen “international competitiveness,” amid aggravated pressure on the country’s finances due to low oil prices.
“Liabilities, insurance reserves, assets, as well as payments made by insurance companies are carried out in manats,” he said. “Therefore, the change of the national currency rate has not created currency risks for insurance companies.”
The Forum of Insurance Agents is discussing the status and problems existing in the insurance market. The event is attended by representatives of insurance companies, state insurance supervision service, the Bureau of compulsory insurance, insurance agents, etc.
There are 27 insurance companies and one reinsurance company in Azerbaijan.
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Nigar Orujova is AzerNews’s staff journalist, follow her on Twitter: @o_nigar
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