Information by the Central Bank of the Republic of Azerbaijan

19-05-2020

19 May 2020, Baku: The license of the OJSC ‘Standard Insurance’ insurance company has been revoked in accordance with Articles 107.1.4, 109.1.2, 118.1.1 and 118.1.2 of the Law of the Republic of Azerbaijan on Insurance Activity by the Resolution of the Management Board of the Central Bank of the Republic of Azerbaijan dated 19 May 2020 due to the fact that the Company lost its capital in full, failed to maintain its current activity in a reliable manner and viloated the rights of consumers. A temporary administrator has been appointed to the Company, as well as an appeal was filed to court to start bankruptcy proceedings on the Company. 

Authorities of the OJSC ‘Standard Insurance’ have been halted under the legislation and transferred to the temporary administrator.

Financial standing of the OJSC ‘Standard Insurance’ insurance company has long begun to deteriorate. After the Financial Markets Supervisory Authority had been liquidated and its powers passed to the Central Bank under Decree # 1616 of the President of the Republic of Azerbaijan dated 28 November 2019, the Central Bank started to assess financial conditoin of the insurance sector. The assessment revealed that total regulatory capital of the Company was considerably below the required level and the Bank held discussions with the Company management on capital recovery. However, shareholders failed to submit a specified plan on full capital recovery. Efficiency indicators of the OJSC ‘Standard Insurance’ are considerably low and the company has been incurring losses over recent two years.

An issue has been repeatedly raised before the company management on the company’s market behavior, in particular, consumer protection issues. Company’s chronic liquidity problem has led to serious delays in settlement of insurance claims, resulting in increased consumer dissatisfaction with insurance services.

The Central Bank systematically monitors financial stability of the insurance sector and the compliance of insurance companies' market behavior with the legislation. All measures taken are aimed at development of the insurance sector, protection of the rights of consumers of insurance services.