Central Bank of Azerbaijan Finalizes Draft Amendments on Mandatory Property Insurance

Work on improving Azerbaijan's legislation on mandatory property insurance has entered its final stage. This was announced on Thursday at a press conference dedicated to the presentation of the Financial Stability Report by Vusal Gurbanov, Director General of the Central Bank of Azerbaijan (CBA).

According to him, the key objective of the forthcoming changes is to make insurance payouts more transparent and ensure more adequate determination of insured sums.

Gurbanov explained that the decline in the number of mandatory insurance contracts is due to several factors. These include changes in indicators related to the timing of contract conclusion, an increase in insured sums for certain types of insurance, and insurance of certain categories by the state.

"There is a decline in the number of mandatory insurance contracts. One reason is related to the timing of concluding insurance contracts. On the other hand, an increase in insured sums has been recorded for certain types of mandatory insurance. These indicators were also affected by the insurance of certain categories by the state," he noted.

According to the CBA representative, the draft amendments to the legislation on mandatory property insurance have been coordinated with government bodies for some time and are now in the final stage. In addition, the CBA continues work on other conceptual issues arising from the legislation.

"The main goal of the new edition of the legislation is to increase the transparency of insurance payouts and ensure a more adequate determination of insured sums. It is important to set the insured sum in accordance with the value of the property," he said.

Gurbanov emphasized that the changes are not aimed at increasing the number of mandatory insurance contracts. The main tasks are to improve the quality of insurance services, enhance insurance processes, and more accurately account for the real value of property.

"We do not envisage an increase in the number of insurance contracts. The goal of the project is to improve the quality of services, increase the transparency of insurance payouts, and ensure insurance of property in accordance with its value," he added.