Compulsory insurance

A system of relationships designated to secure transfer or distribution of risks in connection with the protection of property, health, life, third party liability, as well as activities which are not prohibited by the law, including property interests associated with the entrepreneurial activities of the insured or a person covered by an insurance;

Insurer

A legal entity who has the license to engage into insurance activities in the Republic of Azerbaijan and who has the relevant permission to provide the relevant compulsory insurance services as provided by the Law On Compulsory Insurance shall be an insurer.

Insured

In accordance with the types of compulsory insurance as prescribed by the Law On Compulsory Insurance, physical persons or legal entities that carry the duty to procure the compulsory insurance for the relevant property interests and become a party to a compulsory insurance agreement made with the insurer.

Third parties

Except for the insured and / or his family members, any person who is not in accordance with the Law On Compulsory Insurance is a party to the insurance agreement on the compulsory insurance of the third party liability, suffering damages as a result of an action or a failure to act of the insured, and also physical persons – and where a physical person dies, his heirs, or legal entities or their successors who have the right to claim the insurance payment shall be third parties.

Compulsory Insurance Agreement

Compulsory insurance agreement is an agreement made between the insured and the insurer by way of issue to the insured (or persons covered by the insurance) of the compulsory insurance certificate for the purpose of securing the compulsory insurance.

Compulsory Insurance Certificate

Compulsory insurance certificate is a document that evidences the fact of entering into the compulsory insurance agreement.

Compulsory Insurance Amount

The maximum threshold of insurance of the object of insurance in accordance with the Law On Compulsory Insurance reflecting the monetary value of obligations of the insurer as per this Law.

Compulsory Insurance Premium

Shall be paid to the insurer as the Law On Compulsory Insurance may provide a one-off payment in cash or by a wire transfer, except as.

Participant

An insurer entered into the Register of Participating Insurers of the Union of Legal Entities “Compulsory Insurance Bureau”;

Payment ability

The capacity to perform the obligation at any point in time and in full;

Compensation payment

A payment to be made by the Union of Legal Entities “Compulsory Insurance Bureau” where the insurers are not able to make the insurance payments in compensation of damages caused to property and health under the relevant compulsory insurance agreements;

Compensation payments reserve

The total of funds to be accumulated by the Union of Legal Entities “Compulsory Insurance Bureau” in accordance with the law and the Charter of the Union of Legal Entities “Compulsory Insurance Bureau” solely for the purpose of making of compensation payments;

Participation Fee

A fee payable by a relevant insurer in the amount to be prescribed by the relevant insurance control authority to the Union of Legal Entities “Compulsory Insurance Bureau” for becoming a member of the “Compulsory Insurance Bureau”;

Security Deposit

A fee payable by a relevant insurer who wants to become a member of the Union of Legal Entities “Compulsory Insurance Bureau” in the amount to be prescribed by the relevant insurance control authority as one of sources of accumulation of compensation payment reserves;

Regular Fee

A fee regularly payable to the Union of Legal Entities “Compulsory Insurance Bureau” by the participant as a percentage of insurance premiums received from the relevant compulsory insurance agreements in the amount prescribed by the legislation and constituting the basis of the compensation payment reserves;

Additional Fee

Where the payments by the Union of Legal Entities “Compulsory Insurance Bureau” are not sufficient to make the compensation payments, to satisfy the obligations related to the making of the relevant payments, an amount payable by participants to the “Compulsory Insurance Bureau” in compensation of payments made by the “Compulsory Insurance Bureau” at the account of its own funds, where the amount of such payments shall be determined on a case by case basis by the insurance control authority.