AZERBAIJAN: Ata Sigorta's license for reinsurance temporary suspended

The Financial Markets Supervision Chamber of Azerbaijan (FIMSA) suspended the license issued to Ata Sigorta for the reinsurance operations, because of the non-conformity of Ata Sigorta's capitalization for provision of reinsurance services, FIMSA said in its statement.

Activity of the mentioned license was suspended for 5 months from December 17, 2018. The first Deputy of the Chairman of the Board of Ata Sigorta, Orkhan MAMEDOV, regarding the license suspension commented that total company's capital decreased due to the rapid increase of sales of insurance products. He pointed out that due to the mentioned rapid increase Ata Sigorta had to significantly increase its insurance reserves which had an immediate effect on the company's capital reduction.

According to the legal requirements, an insurance company's charter capital should be not less than AZN 5 million in order to keep insurance business and a company must have additional AZN 5 million to perform reinsurance activity. "Our total capital had always exceeded that limit, but at the moment it is a little bit less than AZN 9 million and we are sure that this is a temporary situation", MAMEDOV said. As he believes, the company is expecting that with stabilization of insurance sales total company's capital will exceed AZN 10 million in the nearest time and the company will continue its reinsurance activity.

Ata Sigorta has been performing insurance activity from 2004 and is included in AtaHolding. The company provides insurance services of 4 voluntary and 26 mandatory types. The company's assets as of the end of August 2018 exceeded AZN 30 million and its charter capital amounted to AZN 14.6 million.

According to FIMSA, GWP of Ata Sigorta from January to October 2018 amounted to AZN 18.15 million while its paid claims reached AZN 8.16 million. Based on 3Q2018 market results the company took 7th place of 21 active insurers in terms of the premiums generated.

*EUR 1 = AZN 1.9281 (31.10.2018)

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