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LAW OF THE AZERBAIJAN REPUBLIC

of June 24, 2011 No. 165-IVQ

About compulsory insurances

(The last edition from 13-06-2017)

This Law, governing the legal and economic relations between insurers, insurers, insured and beneficiaries in the sphere of compulsory insurance of real estate, obligatory civil liability insurance of owners of vehicles, obligatory civil liability insurance in connection with operation of real estate and obligatory personal passengers insurance from accident, for the purpose of protection of their rights and interests establishes general bases of implementation of noted types of compulsory insurance, and also the rule and condition of their implementation in the Azerbaijan Republic.

I. General Section

Chapter 1. Introduction provisions

Article 1. General provisions

1.1. The general Section of this Law establishes the basic principles and provisions which shall be applied in the relations by types of compulsory insurance, except as specified, for which excellent provisions are provided in other laws relating to separate types of compulsory insurance.

1.2. Provisions of the Special Section of this Law extend only to that type of compulsory insurance which is established by the corresponding Chapters of this Section.

1.3. If this Law does not provide other, interpretation of the used concepts is established by the Civil code of the Azerbaijan Republic and the Law of the Azerbaijan Republic "About insurance activity".

1.4. If this Law does not establish other, the relations following from implementation of the types of compulsory insurance provided by this Law are regulated by the Civil code of the Azerbaijan Republic and the Law of the Azerbaijan Republic "About insurance activity".

Article 2. Legislation on compulsory insurances

The legislation of the Azerbaijan Republic on compulsory insurances consists of the Constitution of the Azerbaijan Republic, the Civil code of the Azerbaijan Republic, the Law of the Azerbaijan Republic "About insurance activity", this Law, interstate international treaties and other regulatory legal acts of the Azerbaijan Republic.

Article 3. Principles of compulsory insurance

3.1. The basic principles of the compulsory insurances provided by this Law:

3.1.1. obligation and distribution of compulsory insurances concerning any person having insurance interest on the corresponding type of insurance;

3.1.2. providing in the amount established by this Law and procedure for protection of persons, to health and (or) property of which the damage as a result of insured events is caused;

3.1.3. stimulation of prevention of the circumstances which are the reason of insured events;

3.1.4. ensuring elimination of consequences of insured events, and also uses of insurance indemnities for these purposes;

3.1.5. ensuring financial stability in insurance transactions by means of the multi-level mechanism of financial provision;

3.1.6. ensuring single methodological approach to making of transactions by the types of compulsory insurance provided by this Law.

Article 4. Purpose, carrying out and territory of application of compulsory insurance

4.1. The types of compulsory insurance provided by this Law are applied for the purpose of ensuring compensation of damage to which physical persons and legal entities in connection with valuable interests are exposed.

4.2. Losses of persons as a result of insured events do not join in providing on compulsory insurance.

4.3. For the purpose of this Law insurance of valuable interests in connection with any property (the building, construction, the vehicle, the device, the device, the equipment and so forth) which is in condition, emergency or unsuitable to operation, is forbidden.

4.4. Carrying out the any kind of compulsory insurance provided by this Law is performed based on the corresponding permission issued to the insurer by supervision body behind the financial markets.

4.5. Additional requirements for issue of permission to carrying out types of compulsory insurance are established by supervision body behind the financial markets.

4.6. If the Special Section of this Law does not provide other, insurance coverage for agreements of compulsory insurance acts on the territory of the Azerbaijan Republic.

Article 4-1. Calculations

Payments by the calculations established by this Law are performed only in non-cash form.

Article 5. Insurer and insurer

5.1. The legal entity having the license for implementation of insurance activity in the Azerbaijan Republic and who got the corresponding permission to carrying out certain type of the compulsory insurance provided by the Special Section of this Law is considered the insurer.

5.2. According to the corresponding Chapter of the Special part of this Law, the physical person or legal entity which shall insure without fail the corresponding valuable interests and is the party of the agreement of compulsory insurance signed with the insurer is considered the insurer.

5.3. Insurers are free in the choice of any insurer having the license for carrying out the corresponding type of compulsory insurance for the conclusion of the insurance contract.

Article 6. Insured, beneficiary and victim

6.1. Person whose valuable interests are insured under the agreement of compulsory insurance is considered insured: in the agreement of compulsory personal insurance from accident - person for benefit of whom the agreement of compulsory insurance is signed (it is included in category of insured), on proprietary insurance - person who has property in property or actual possession, on civil responsibility insurance - person who is identified on the basis, the stipulated in Article 6.2 presents of the Law.

6.2. Any person operating on legal causes the property specified in the agreement of obligatory civil liability insurance and also the insurer at the time of operation of this property from its party are considered as insured.

6.3. Relevant provisions of the Special Section of this Law establish specific category of insurers or insured by each type of compulsory insurance.

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