Licenses for insurance firms, brokers and agents
Providing legal services for obtaining licenses and permits for both an insurance company and a broker, as well as obtaining an insurance agent's license is now much easier.
The executive authority on insurance law has set the requirements in legislation for obtaining licenses for insurance activities. It is well-known that the development of international standards further enhanced the importance of insurance law.
The widespread use of insurance law in foreign practice leads to the development of this field in our country as well. Obtaining a license or special permits for an insurance company or a broker requires several legal procedures to be followed and necessary documents to be received.
What is a license?
License is an official document granting permission for insurance activity to the insurance company, reinsurance activity to the reinsurance company, insurance broker activity to the insurance broker and insurance agent activity to the insurance agent.
Requirements for obtaining licenses
The Law on “Insurance Activities” defines requirements for obtaining licenses for insurance and reinsurance activities. Article 43 of the Law on “Insurance Activities” states that a newly created open joint-stock company will receive a license for insurance or reinsurance activities for 5 years.
The license for insurance activity gives you the right to carry out both insurance and reinsurance activity, and the license for reinsurance activity is the right to engage in reinsurance activity only. An application for issuance of a license for insurance or reinsurance activity is considered by the insurance supervision body in two stages:
- Consideration of the initial application for the issuance of licenses by the founders or the person (s) authorized by the legislation;
- Consideration of the final application for a license after the state registration as an open joint-stock company.
Documents required to obtain a license
Documents required for obtaining licenses are:
- Letter of application for licensing (a written request for a license with the name and address of an open shareholder established to become an insurer);
- Documents confirming the following information about persons who wish to become insurers:
- A citizen of the Republic of Azerbaijan must meet the following requirements in order to become the founder or shareholder of the insurer: - sufficient financial resources to acquire the relevant shares; when it intends to acquire an important stake or significant control - civil flawlessness.
- In order to become a founder or shareholder of the insurance company, the local legal entity must meet the following requirements: compliance with the financial sustainability standards in the area of activity as required by law; civil flawlessness of the executive officers of their executive body when they intend to gain an important share or significant control.
A foreign individual must meet the following requirements to become the founder or shareholder of the insurance company:
- Compliance with financial sustainability and solvency standards by the laws of their country; confirmation of the fact that there is no violation of the law by the insurance supervision agency of their country;
- Carry out uninterrupted insurance and (or) reinsurance activities within the country for the last five years;
- Have an appropriate rating given by international rating agencies and approved by the insurance supervision body;
- A copy of the charter of an open joint-stock company, and if the number of founders exceeds one, as well as a copy of the funding agreement;
- Information about founders of legal entities, including notarized copies of certificates of state registration as legal entities, notarized copies of constituent documents, for the last three fiscal years, if not less than 3 years, financial statements approved by an independent auditor regarding the balance sheet, profit and loss for the quarter preceding the date of submission of the documents, and a duly certified copy of the decision of its authorized management body to obtain the intended interest;
- Individuals 'founders' identity card data, documents, and proof of their permanent place of residence, place of work (occupation), documents confirming that they have sufficient funds to acquire shares;
- A duly certified document confirming the authority of the person to apply on behalf of the founders;
- Information about the founders' significant stake in other legal entities, as well as the significant contributions of other persons in the charter capital of each legal entity;
- Business plan for at least the next 3 years;
- plan of organizational measures and justified amount of funds allocated for this purpose;
- amount of funds provided for the initial stage of activity;
- types of insurance risks and assumptions;
- marketing plan, description of future customer base and potential customer groups;
- principles of reinsurance policy and reinsurance program;
- forecast of financial results of the established insurer;
- information on the independent auditor who will conduct the audit;
- simplified the projected figures reflecting the business development and solvency plan in the form of revenues and expenses, the amount and structure of operations, insurance premiums, commission premiums, business expenses, insurance payments, investment income and taxes;
- description of used office buildings, computer and telecommunications systems, electronic accounting and other computer programs;
- description of internal control mechanisms;
10. A notarized application for civil defects and a list of persons to be nominated for managerial positions
Note that these documents are required at the time of the initial application. Documents submitted during the final application for a license:
- The final application containing the name, the organizational-legal form, the location, the account number and the name of the corresponding bank, the type of activity applied for the license;
- Notarized copy of State Registration Certificate;
- Notarized copy of the document on registration of an open joint-stock company established by the relevant tax authority to become an insurer;
- Notarized copy of the Charter;
- Documents confirming the payment of the chartered capital of the open joint-stock company established to become an insurer;
- Notarized copies of relevant education and work experience records of persons appointed to senior positions;
- Insurance rules for any type (or types) of voluntary insurance to be granted;
- Copy of the document confirming the right to use the office building of the open joint-stock company established to become an insurer;
- Document confirming payment of state duty (bank receipt).
Documents required for issuance of an unlimited license:
- The final application containing the name, the organizational-legal form, the location, the account number and the name of the corresponding bank, the type of activity applied for the license;
- Extract from the State Register of Legal Entities;
- If there is any change in the content of the documents submitted during the final application for a license, notarized copies of those documents;
- Document confirming payment of state duty (bank receipt);
The insurance supervision agency informs the applicant about the documents and information provided during the final application for licensing and submits the relevant license after the issuance of the document confirming payment of the state fee for issuing the license. The amount of the state duty paid for the issuance of a license is established by legislation.
The insurance supervision agency shall inform the applicant about the issuance or refusal of issuance of the license by sending a written notice to the applicant within the period specified in the law. The license is issued directly by the insurance supervision body to the authorized representative of the insurer.
The Insurance Supervisory Authority shall notify the relevant tax authority within 10 days from the date of its registration in the registry as specified in Article 54 of the Law on Insurance Activities and publish information in two-state newspapers published in the Republic of Azerbaijan at the expense of the licensee.
Provision of legal services related to insurance activities
As Legal Store law firm, we provide high-quality legal services to our clients in this area. Thus, obtaining licenses and permits related to insurance agents, companies and brokers require several legal procedures to be followed and the necessary documentation to be collected. Our legal professionals will provide this service to you effectively and easily.
We also provide you with appropriate legal advice when applying for an insurance agency license. Legal aid to obtain licenses and permits related to the insurance company and the broker is a call away to you!
