Order on the Regulation of Certain Issues in Insurance Activity

9/2/2019 “On the Regulation of Certain Issues in Insurance Activity” www.huquqiaktlar.gov.az/StatementDetails.aspx?statementId=30878 1/20 STATE REGISTRY OF LEGAL ACTS OF THE REPUBLIC OF AZERBAIJAN Type of Act: DECISION OF THE MINISTRY OF FINANCE OF THE REPUBLIC OF AZERBAIJAN Date of Adoption: 27.03.2014 Registration Number: Q-08 Title: “On the Regulation of Certain Issues in Insurance Activity” Official Source of Publication:
Date of Entry into Force: 08.04.2014
Index Code under the Unified Legal Classification of the Republic of Azerbaijan: 080.010.000 Registration Number in the State Registry of Legal Acts: 15201403270008 Date of Entry into the State Registry of Legal Acts: 07.04.2014

In order to ensure the implementation of sub-paragraphs 4.1.1, 4.1.3, 4.1.4, 4.1.6, 4.1.7, 4.1.8, 4.1.9, and 4.1.10 of the Decree No. 49 dated December 16, 2013 of the President of the Republic of Azerbaijan “On Amendments to the Decree No. 735 dated March 13, 2008 of the President of the Republic of Azerbaijan on the Implementation of the Law No. 519-IIIQ dated December 25, 2007 of the Republic of Azerbaijan ‘On Insurance Activity’”, and the implementation of Law No. 806-IVQD dated October 29, 2013 of the Republic of Azerbaijan “On Amendments to the Law ‘On Insurance Activity’”, the Collegium of the Ministry of Finance of the Republic of Azerbaijan DECIDES:

1. The minimum requirements concerning the official website and electronic information system of insurance companies are approved (Appendix No. 1).
2. The list of information, materials, and other documents required for approving the merger of insurance companies is approved (Appendix No. 2).
3. In accordance with Article 78.4 of the Law “On Insurance Activity” of the Republic of Azerbaijan, the list, forms, and reporting periods of other reports submitted by insurance companies to the State Insurance Supervision Service of the Ministry of Finance of the Republic of Azerbaijan, in addition to their financial reports, are approved:
3.1. Urgent report on insurance (reinsurance) operations (monthly, quarterly, and annual) – Form No. 11 (Appendix No. 3);
3.2. Report on insurance contracts (quarterly and annual) – Form No. 12 (Appendix No. 4);
3.3. Report on calculated insurance (reinsurance) premiums, refunded insurance (reinsurance) premiums, and insurance payments under insurance (reinsurance) contracts (quarterly and annual) – Form No. 13 (Appendix No. 5);
3.4. Report on receivable insurance and reinsurance premiums under insurance and reinsurance contracts (quarterly and annual) – Form No. 14 (Appendix No. 6);
3.5. Report on reinsurance operations (quarterly and annual) – Form No. 15 (Appendix No. 7);
3.6. Report on calculated reinsurance premiums for risks reinsured by insurance (reinsurance) companies (quarterly and annual) – Form No. 16 (Appendix No. 8);
3.7. Report on mandatory insurance (quarterly and annual) – Form No. 17 (Appendix No. 9);
3.8. Report on calculated insurance premiums, refunded insurance premiums, and provided insurance payments under insurance contracts with state enterprises (quarterly and annual) – Form No. 18 (Appendix No. 10);
3.9. Report on operational expenses (quarterly and annual) – Form No. 19 (Appendix No. 11);
3.10. Report on mandatory reserves for additional financing of insurance supervision (quarterly and annual) – Form No. 20 (Appendix No. 12);
3.11. Report on commissions calculated for insurance intermediaries (quarterly and annual) – Form No. 21 (Appendix No. 13);
3.12. Report on insurance broker activities (quarterly and annual) – Form No. 22 (Appendix No. 14);
3.13. Report on certain indicators of insurance (reinsurance) companies and legal entity insurance brokers (quarterly and annual) – Form No. 23 (Appendix No. 15);
3.14. Report on shareholders of insurance (reinsurance) companies and persons participating in their charter capital (quarterly and annual) – Form No. 23/1 (Appendix No. 16).
4. The guideline on conducting actuarial calculations is approved (Appendix No. 17).
The form and filling procedure for the actuary certificate are approved (Appendix No. 18).
6. The category of persons holding a position that enables them to compel, exert pressure, or influence insurance operations for supervision, direction, or attraction, who cannot be shareholders or participants of a legal entity insurance broker not licensed for insurance intermediary activities, is determined (Appendix No. 19).
7. The form of the quarterly report on the activities of a natural person insurance agent is approved (Appendix No. 20).
8. The insurance amount for professional liability of insurance brokers is determined as follows:
8.1. For natural person insurance brokers – 200,000 (two hundred thousand) manat;
8.2. For legal entity insurance brokers – 1,000,000 (one million manat).
9. Part One of Order No. I-216 dated December 24, 2010 of the Ministry of Finance of the Republic of Azerbaijan “On Approval of the List, Forms, and Reporting Periods of Reports to be Submitted by Professional Participants of the Insurance Market to the State Insurance Supervision Service” is repealed.
10. The Department of Regulation of Finance and Insurance Market of the Ministry and the State Insurance Supervision Service are tasked with ensuring that this Decision is submitted to the Ministry of Justice of the Republic of Azerbaijan for inclusion in the State Registry of Legal Acts of the Republic of Azerbaijan within 3 days, and with resolving other issues arising from this Decision.
11. I retain oversight of the implementation of this Decision.

Chairman of the Collegium,
Minister of Finance of the Republic of Azerbaijan Samir Şərifov Approved by Decision No. Q-08 dated March 27, 2014 of the Collegium of the Ministry of Finance of the Republic of Azerbaijan.

9/2/2019 “On the Regulation of Certain Issues in Insurance Activity” www.huquqiaktlar.gov.az/StatementDetails.aspx?statementId=30878 2/20
Appendix No. 1
Minimum Requirements Concerning the Official Website and Electronic Information System of Insurance Companies

1. General Provisions
   The Minimum Requirements Concerning the Official Website and Electronic Information System of Insurance Companies (hereinafter - Requirements) were prepared in implementation of sub-paragraph 4.1.1 of Decree No. 49 dated December 16, 2013 of the President of the Republic of Azerbaijan “On Amendments to Decree No. 735 dated March 13, 2008 on the Implementation of Law No. 519-IIIQ dated December 25, 2007 ‘On Insurance Activity’”, and determine the minimum requirements concerning the official website and electronic information system of insurance companies.
2. Minimum Requirements Concerning the Official Website of Insurance Companies
   2.1. The official website of an insurance company must include:
   2.1.1. Contact information on the “Home Page”.
   2.1.2. Address, phone number, and email address of the insurance company’s head office, branches, and representative offices.
   2.1.3. Information on the insurance company’s management personnel (surname, first name, patronymic, and position).
   2.1.4. A clear list of all insurance rules offered by the insurance company, available for download in “PDF” format and searchable as text.
   2.1.5. A survey section for each insurance type containing specific questions on insured events, with the ability to send an automatic reply letter confirming receipt of information or events considered insured.
   2.1.6. Information reflecting the complaint procedure against the insurance company or its employees, including the phone number and email address of the official responsible for complaints, with an independent section enabling electronic submission of complaints and automatic reply letters confirming receipt.
   2.1.7. Financial reports of the insurance company available for download in “PDF” format.
   2.2. The information specified in paragraph 2.1 of these Requirements must be placed on the insurance company’s website so that policyholders, insured persons, or beneficiaries can easily access and use it.
3. Minimum Requirements Concerning the Electronic Information System of Insurance Companies
   3.1. The electronic information system of an insurance company must contain at least the following data:
   3.1.1. For each concluded insurance and reinsurance contract:
   3.1.1.1. Name of the policyholder (reinsured);
   3.1.1.2. Gender and date of birth of the insured under life insurance contracts;
   3.1.1.3. Type and class of insurance;
   3.1.1.4. Contract number;
   3.1.1.5. Date of contract conclusion and validity period;
   3.1.1.6. Number of insured objects;
   3.1.1.7. Insurance (reinsurance) amount;
   3.1.1.8. Insurance tariff;
   3.1.1.9. Amount of insurance premium;
   3.1.1.10. For contracts with installment payments - amount of each payment and payment date;
   3.1.1.11. Amount and payment date of the actually paid insurance premium;
   3.1.1.12. Name and license number of the insurance intermediary, if involved in concluding the contract;
   3.1.1.13. Amount of commission payable to the insurance intermediary;
   3.1.1.14. Name of the reinsurance company and reinsurance broker;
   3.1.1.15. Number of the reinsurance contract;
   3.1.1.16. Amount of liability transferred to the reinsurance company;
   3.1.1.17. Amount of reinsurance premium;
   3.1.1.18. Amount of reinsurance commission.
   3.1.2. For regulated and unregulated losses:
   3.1.2.1. Date the insured event occurred;
   3.1.2.2. Registration date of the insured event;
   3.1.2.3. Name of the policyholder;
   3.1.2.4. Name of the beneficiary;
   3.1.2.5. Number of the insurance (reinsurance) contract;
   3.1.2.6. Class and type of insurance;
   3.1.2.7. Validity period of the insurance contract;
   3.1.2.8. Expected payment amount;
   3.1.2.9. Adjustment costs;
   3.1.2.10. Loss amount based on assessment;
   3.1.2.11. Reasons for refusal of insurance payment, date and number of the refusal letter;
   3.1.2.12. Insurance (reinsurance) amount under the contract;
   3.1.2.13. Deductible amount under the contract;
   3.1.2.14. Reinsurer’s share in the insurance payment;
   3.1.2.15. Name of the reinsurance company;
   3.1.2.16. Number of the reinsurance contract;
   3.1.2.17. Calculated insurance payment amount;
   3.1.2.18. Amount and date of the insurance payment;
   3.1.2.19. Amount recovered based on subrogation rights.
   3.2. The electronic information system of insurance (reinsurance) companies operating in life insurance must, in addition to the data specified in paragraph 2.1 of these Requirements, ensure accounting for debts provided to insured persons and operations related to the participation of insured persons in the insurance company’s investment income.
   3.3. The electronic information system must provide automatic generation of the “Journal of Insurance (Reinsurance) Contracts” and the “Journal of Losses”.
   3.4. The electronic information system must include a completeness control function for entered data (if required data are not fully entered, the program must refuse to perform the corresponding operation and notify accordingly).
   3.5. To ensure reliable and continuous operation during emergencies, the database and transaction journal backup must be stored on an additional server located outside the main server’s location.
   3.6. The electronic information system must provide opportunities for adding other functions in the future, as well as integration with external information systems, including the insurance supervision authority’s information system.
   3.7. User access to the electronic information system must be limited by mechanisms granting them corresponding authorities within that system.
4. Entry into Force of Minimum Requirements
   The minimum requirements specified in Part 2 of these Requirements enter into force on July 1, 2014, and those specified in Part 3 enter into force on January 1, 2015. Approved by Decision No. Q-08 dated March 27, 2014 of the Collegium of the Ministry of Finance of the Republic of Azerbaijan.

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Appendix No. 2
List of Information, Materials, and Other Documents Required for Approving the Merger of Insurance Companies

1. General Provisions
   The List of Information, Materials, and Other Documents Required for Approving the Merger of Insurance Companies was prepared in implementation of paragraph 4.1.3 of Decree No. 49 dated December 16, 2013 of the President of the Republic of Azerbaijan “On Amendments to Decree No. 735 dated March 13, 2008 on the Implementation of Law No. 519-IIIQ dated December 25, 2007 ‘On Insurance Activity’”, and determines the list of information, materials, and other documents required for approving the merger of insurance companies.
2. Information Required for Approving the Merger of Insurance and Reinsurance Companies
   2.0. The following information must be submitted to the insurance supervision authority for the merger of insurance and reinsurance companies:
   2.0.1. The number of insurance and/or reinsurance contracts concluded separately by each merging insurance or reinsurance company that are valid as of the date of application for merger (with separately indicated contracts concluded with natural persons);
   2.0.2. The amount of insurance (reinsurance) premiums under the valid insurance contracts concluded separately by each merging insurance or reinsurance company as of the date of application for merger;
   2.0.3. Information on business relations between merging insurance or reinsurance companies over the last 3 years (or period of operation if less than 3 years).
3. Materials and Other Documents Required for Approving the Merger of Insurance and Reinsurance Companies
   3.0. The following materials and other documents must be submitted to the insurance supervision authority for the merger of insurance and reinsurance companies:
   3.0.1. A list of contracts concluded between merging insurance or reinsurance companies over the last 3 years (or period of operation if less than 3 years) regarding their business relations;
   3.0.2. Consolidated financial reports of merging insurance or reinsurance companies for the last 3 financial years (or period of operation if less than 3 years);
   3.0.3. Extracts from the State Register of Legal Entities for each merging insurance or reinsurance company separately.

9/2/2019 “On the Regulation of Certain Issues in Insurance Activity” www.huquqiaktlar.gov.az/StatementDetails.aspx?statementId=30878 4/20 Form No. 11 (Appendix No. 3) URGENT REPORT ON INSURANCE (REINSURANCE) OPERATIONS (monthly, quarterly, and annual) Insurance company (reinsurance company) name: ______________________________________________________ Reporting period: __________________________________________________ year Accumulated total from the beginning of the year (in manat) Calculated insurance (reinsurance) premiums: Total:

• Voluntary insurance: Total:
  Life insurance
  • Property insurance
• Mandatory insurance: Total:
  Insurance payments: Total:
• Voluntary insurance: Total:
  Life insurance
  • Property insurance
• Mandatory insurance: Total:
  Note: Reports must be submitted by insurance (reinsurance) companies by the 10th of the month following the reporting period.
  Chairman of the Board: M.Y.
  Chief Accountant:
  Approved by Decision No. Q-08 dated March 27, 2014 of the Collegium of the Ministry of Finance of the Republic of Azerbaijan.

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Appendix No. 4 (Form No. 12)
REPORT ON INSURANCE CONTRACTS (quarterly and annual) Accumulated total from the beginning of the year (in manat)

Insurance Classes	Number of Contracts	Number of Insured Objects	Total Insurance Risk	Average Insurance Risk (Per Contract / Per Object)	Calculated Premiums (Total / Natural Persons / Legal Entities)
Life Insurance
Non-Life Insurance
Personal Insurance
Property Insurance
Mandatory Insurance
Total
Chairman of the Board: M.Y.
Chief Accountant:
Approved by Decision No. Q-08 dated March 27, 2014 of the Collegium of the Ministry of Finance of the Republic of Azerbaijan.

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Appendix No. 5 (Form No. 13)
REPORT ON CALCULATED INSURANCE (REINSURANCE) PREMIUMS, REFUNDED INSURANCE (REINSURANCE) PREMIUMS, AND INSURANCE PAYMENTS UNDER INSURANCE (REINSURANCE) CONTRACTS (quarterly and annual) Insurance company (reinsurance company) name: _______________________________________________________________________ Reporting period: _________________________________ Accumulated total from the beginning of the year (in manat)

Insurance Classes	Premiums Calculated (Total / Natural / Legal)	Refunded Premiums (Total / Natural / Legal)	Remaining Payments (Calculated / Events Count / Total / Natural / Legal)
Life Insurance
Non-Life Insurance
Personal Insurance
Property Insurance
Mandatory Insurance
TOTAL
Note: Refunded insurance (reinsurance) premiums refer to the total of premiums returned or payable due to early termination or modification of insurance (reinsurance) contracts. Chairman of the Board: M.Y. Chief Accountant:
Approved by Decision No. Q-08 dated March 27, 2014 of the Collegium of the Ministry of Finance of the Republic of Azerbaijan.

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Appendix No. 6 (Form No. 14)
REPORT ON RECEIVABLE INSURANCE AND REINSURANCE PREMIUMS UNDER INSURANCE AND REINSURANCE CONTRACTS (quarterly and annual) Insurance company (reinsurance company) name: _______________________________________________________ Reporting period: _________________________________

Insurance Class Name	Receivable Premiums (Total / Direct Insurance / Reinsurers / Brokers)
	Direct from Policyholders / From Insurance Intermediaries
	Direct from Reinsurers / From Insurance Brokers
TOTAL
Chairman of the Board: M.Y.
Chief Accountant:

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Appendix No. 7 (Form No. 15)
REPORT ON REINSURANCE OPERATIONS (quarterly and annual) Insurance company (reinsurance company) name: __________________________________________________ Reporting period: _________________________________ Accumulated total from the beginning of the year
I. Reinsured

Insurance Class	Reinsurance Company Name	Country of Residency	Broker Name	Contract Form	Number of Contracts	Total Insurance Risk (Domestic / Foreign)	Total Premium (Domestic / Foreign)	Reinsurer's Share (Risk / Premium)	Calculated Reinsurance Premium
...
Subtotal
TOTAL
II. Accepted Reinsurance
Broker Name	Contract Form	Number of Contracts	Insurance Risk (Domestic / Foreign)	Calculated Reinsurance Premium (Domestic / Foreign)	Commission (Domestic / Foreign)	Insurance Payment (Total / Domestic / Foreign)
-------------	---------------	---------------------	-------------------------------------	----------------------------------------------------	-------------------------------	----------------------------------------------
Chairman of the Board: M.Y.
Chief Accountant:

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Appendix No. 8 (Form No. 16)
REPORT ON CALCULATED REINSURANCE PREMIUMS FOR RISKS REINSURED BY INSURANCE (REINSURANCE) COMPANIES (quarterly and annual) Insurance company (reinsurance company) name: _____________________________________________ Reporting period: _________________________________