TODAY.AZ / Business

License of Azerbaijan’s Alfa Insurance revoked

26 August 2016 [17:43] - TODAY.AZ

By Azernews


By Nigar Abbasova

Azerbaijan’s Financial Market Supervisory Body (FMSB) has revoked the license of Alfa Insurance company, the authority reported. The license was abolished by the relevant decision of FMSB’s board of directors.

The reason of a halt is sharp deterioration of financial position in the insurance company as well as loss of assets and capital, failure to meet reserve capital requirements and default of obligations. Temporary administrator has been appointed in the company since August 26. 

A special supervisory regime was applied to the company lately due to problems existing in the entity. Introduction of the regime was connected with the bankruptcy of Texnikabank, a 100 percent shareholder of the company.

“Bankruptcy of incorporator deteriorated financial situation of the company and made it more critical. The situation was even worsened by non-prudential activity and unhealthy insurance experience of Alfa Insurance’s management,” FMSB said.

The decision is aimed at prevention of growth of insurer’s obligations and avoidance of additional risks to the market. The membership of Alfa Insurance in Compulsory Insurance Bureau was suspended in April. Moreover, sale of its assets was also terminated.

FMSB also said that the authority took joint measures with Azerbaijan Deposit Insurance Fund (ADIF) to improve the situation in the company by means of a sale of its insurance portfolio, but failed due to lack of reserves with required level of liquidity in the enterprise.

“The license was withdrawn due to the fact that restoration of financial condition and bringing it to the level established by law is impossible without investment, but the bankrupt founder does not possess needed amount of funds,” FMSB said.

Alfa Insurance collected insurance premiums worth 1.02 million manats ($ 0.62 million), while payments amounted to 654,540 manats ($ 402.918) in the first half of 2016. 

"Alfa S??orta" OJSC started its activity in 1997.  The Central Bank of Azerbaijan (CBA) revoked the license of Texnikabank on February 2, 2016 on the grounds that the bank, which started its operations in the country in 1994 (previously - Rashadbank) couldn’t fulfill its obligations to creditors and didn’t manage its activity prudentially.

ADIF, which performs the function of a liquidator in the bank, has so far paid compensations worth 119.5  million manats ($ 73.5 million), while the volume of  insured deposits in the banks amounts to 122.6 million manats ($ 75.4 million)

URL: http://www.today.az/news/business/153692.html

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