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Insurance vocabulary

insurance

– the system of the relations which is based on transfer or distribution of risks in the sphere of protection of the valuable interests connected with property, life, health, the civil responsibility, and also the activities, including business activity of the insurer which are not forbidden by the law or insured

reinsurance

– a relationship system based on the transfer or distribution in whole or in part of the risks insured by the insurer under an insurance contract, in accordance with the agreement concluded with the reinsurer

insurer

– the local legal entity, the corresponding license for the implementation of insurance activity which is the agreement party of insurance and having based on “Insurance Activity” Law, on which in case of the loss occurrence provided in the insurance contract the obligation on payment of insurance indemnity according to the procedure, the provided laws on compulsory insurance or the agreement lies

insured

– a party to an insurance contract who pays the insurance premium and has an insurable interest in insuring the insurance object

reinsurer

– a party reinsuring (accepting for reinsurance) risks insured (reinsured) on the basis of insurance or reinsurance contracts concluded with a primary insurer or primary reinsurer having a license for reinsurance activity

reinsured

– the insurer or reinsurer reinsuring (transferring for reinsurance) insured or reinsured risks on the basis of a reinsurance contract

financial market supervisory authority

– the structure created by relevant organ of the executive authority for the purpose of implementation of regulation and control in the financial markets

insurance contract

– the agreement in which conditions of acceptance by the insurer on themselves obligations of payment based on approach of certain case of compensation or the approved sum of money for the caused damage, losses in connection with risks to which object of insurance, instead of payment of the corresponding insurance premium by the insurer can undergo are enshrined

insurance policy

– the document issued by the insurer to the insurer and (or) insured and the confirmatory fact of the conclusion of the insurance contract

insurance rules

– the document accepted by the insurer or supervision body behind the financial markets according to article 16.5 of this Law, taking into account requirements of the Civil code of the Azerbaijan Republic and this Law, establishing rules and conditions on this type of insurance on which the type of voluntary insurance performed by the insurer is proved

object of insurance

– any valuable interest of the insurer which is not contradicting the law, or insured

insurance premium

– the sum of money paid to the insurer from the insurer instead of acceptance or distribution of risks according to the insurance contract in case of voluntary insurance and to the laws on compulsory insurance in case of the compulsory insurance, according to the procedure, provided by the insurance contract

insurance sum

– the final limit of the obligation of the insurer on insured risks expressed in the amount of, the established laws on compulsory insurance on compulsory insurance, by the insurance contract on voluntary insurance

redemption amount

– the sum of money paid by the insurer to the insurer in case of early termination of the agreement on accumulative life insurance

subject of insurance

– physical person, property or circumstance to which the valuable interests insured according to the insurance contract belong

insurance risk or risk

– the probability of occurrence of the event that caused the occurrence of losses or damages related to the object of insurance, as well as the liability assumed by the insurer against this possibility

insured event

– a case or circumstance occurring or arising during the term of the insurance contract and on compulsory insurance - according to the laws on compulsory insurance, on voluntary insurance - according to the insurance contract which is the basis for paying insurance compensation to the insured, insured or other beneficiary

insurance claim

– appeal of the insurer, the insured or the beneficiary, directed to the insurer regarding the performance of its duties upon the occurrence of the insured event in accordance with the Civil Code of the Republic of Azerbaijan, this Law, laws on compulsory insurance and the insurance contract; this concept in relation to the relevant appeal of the reinsurer to the reinsurer under reinsurance contracts is used as a “reinsurance claim"

insurance payment

– financial compensation paid by the insurer upon the occurrence of an insured event in accordance with the laws on compulsory insurance or an insurance contract

own deduction

– part of the insured risk, which according to the insurance or reinsurance contract remains the responsibility of the insurer (reinsurer)

co-insurance

– is a mechanism of legal and economic relations arising from a contract concluded between several insurers regarding the joint insurance of risks established by the insurance contract and the allocation of insurance indemnity obligations

cumulative life insurance

– a form of life insurance that provides for the accumulation of insurers regularly paid by the insurer of insurance premiums as term savings funds

actuary

– a specialist who determines the basis for calculating insurance contributions by conducting economic and mathematical calculations in accordance with this Law, as well as calculating insurance reserves

license

– an official document authorizing the insurer to carry out insurance activities, the reinsurer - reinsurance activities, the insurance broker - the activities of the insurance broker, the insurance agent - the activities of the insurance agent

required capital

– an amount that expresses the funds required by the insurer to fully meet its financial obligations

insurer's own funds

– funds free from the insurer's obligations, the amount of which is calculated according to the rules established by the financial market supervision authority

aggregate capital

– the cash amount of funds required to ensure the financial stability and solvency of the insurer

person

– individual or legal person

foreign individual

– an individual who is not a citizen of the Republic of Azerbaijan, whose place of residence is not the territory of the Republic of Azerbaijan

foreign legal entity

– legal entities that are not covered by the notion of local legal entity

foreign reinsurer

– a foreign legal entity having the right to realize reinsurance activities according to the laws of its country

subsidiary

– for the purposes of the law “On Insurance Activities” a legal entity, that has a substantial control over its main founder(stockholder)for the purposes of the law “On Insurance Activities” a legal entity, that has a substantial control over its main founder(stockholder)

dependent companies

– legal entities, one of which is under the majority control of the other, or each of which is under the majority control of the same third party (s)

especially important contract

– for the purposes of the law “On insurance activity”, a contract representing a person, regardless of whether he or she has shares in a legal entity, has the authority to substantially influence this legal entity in making decisions

majority control

– for the purposes of this law “On insurance activity”, the possession of 50 or more percent of the placed ordinary shares of a legal entity, or the possibility of significant influence on the decision-making of a legal entity by any person on the basis of a particularly important contract

prevailing interest

– is the direct or indirect possession of 20 or more percent of the shares placed in the authorized capital; a person is considered to be the indirect owner of the prevailing share in a legal entity in the event that it exercises majority control over another legal entity owning the majority share in this legal entity

civil impeccability

– for those envisioned in the AR Law on Insurance Activities; absence of conviction for intentional crime; no conviction for committing grave or especially grave crimes in the field of property and economic activity; not to be banned by a court order to engage in a relevant job or engage in professional activities

close relatives

– for the purposes of this law ,“On insurance activity”, husband, wife, parents, children, adoptive parents, sisters, brothers, parents, sisters, brothers of husband or wife