Regulatory Alerts2025-11-28
Regulation on Formation of Life and Non-Life Insurance Reserves
The Central Bank of the Republic of Azerbaijan issued Resolution No. 12/1 to establish comprehensive rules for calculating and forming life and non-life insurance reserves. The regulation mandates minimum reserve amounts across multiple categories, including unearned premiums, reported and incurred-but-not-reported losses, stabilization, contingent liabilities, and catastrophic earthquake risks, while providing detailed actuarial formulas for each. It further standardizes the calculation of reinsurers' shares, defines key terminology, and requires insurers to maintain specific logs and documentation for at least five years post-contract termination.
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