INSURANCE ON THE ROAD

Driving has become an increasingly popular pastime in Azerbaijan in recent years. It is both economic and convenient. And that doesn't just apply to "domestic tourism": lovers of long-distance driving are not worried by the number of kilometres as they boldly set off around Europe in their cars enjoying the wonders of nature and tourist sights along the way. They don't have to worry about luggage formalities or restrictions, whether they have enough money for air tickets for all the family, and so on. All they need is a few documents such as a passport, visa, driving licence, of course, a registration certificate and medical insurance. And if their route takes them through the Old World, they will also need a "Green Card". Here, many travellers from Azerbaijan will start to get worried - what is it and, more importantly, where can you get one?

The green light for go

By definition a "Green Card" is compulsory third-party insurance for owners of vehicles in the territory of the member-countries of the international "Green Card" system. And the insurance companies from whom one can buy such a policy will reimburse the costs against any damage to the vehicle, other property and the life and health of third persons resulting from a road accident. When bringing a vehicle into the territory of countries that are members of the "Green Card" system, the owner must without fail acquire a common certificate (a "Green Card" policy). i.e. travelling through the territory of these countries without such a policy is prohibited.

At the same time, the amount of insurance (limits of liability) according to the "Green Card" agreement is established in accordance with the legislation of the country in which the accident occurred. And therefore the cost of the card depends on the type of vehicle, the term of validity of the agreement and the country visited.

In each participating country in the "Green Card" system a national bureau is formed by insurance organizations. At the same time, the indemnity bureau produces "Green Card" certificates for issue to insurers, but the bureau for the settlement of claims is responsible for claims arising in the participating country and pursues litigation against foreign citizens guilty of causing damage to a vehicle and the owner of a vehicle. As soon as an insurance event occurs in a foreign country the bearer of a "Green Card" certificate must notify the local authority (road traffic police, customs services) of the incident and sign documents.  When completing them one needs to indicate whether one understands the language of the foreign country in which the insurance event occurred, and the counterfoil of the "Green Card" must be handed to the other party in the accident. On returning home, the insurance company where the "Green Card" was bought must be informed immediately and all the relevant documents presented.

The advantages of the system are obvious: first of all, it protects the owner of a vehicle from excess car insurance which is provided for by the national laws on compulsory third-party car insurance. Second, it protects the interests of the owner of the vehicle which was damaged as a result of a road accident involving foreign citizens. In short, having paid once, one can relax and continue driving on the roads of different countries.

Incidentally, the term of validity of the "Green Card" may vary from two weeks to one year, depending on the requirements of the insurance company. It may also be completed either partially, for travel to certain countries, or in full, to all countries where the agreement is valid, which is also very convenient for people who like to tour around.

The process is under way

Unfortunately for drivers, Azerbaijan is currently only a transit member of the "Green Card" system, but the Finance Ministry assures us that by 2015 the republic will be a full-fledged member. 

According to the head of the State Insurance Supervision Service of the Finance Ministry, Namiq Xalilov, in order to sign up to the "Green Card" changes need to be made to the law, specifically in resolving the question of which department will fulfil the functions of the National "Green Card" Bureau and defining its obligations. "To this end we are now preparing the relevant amendments to a document which will also establish the rules of re-insurance of contracts for compulsory third-party insurance for the owners of vehicles in companies with a high rating, and also a guarantee offered by banks with a high rating " Xalilov said.

As far as the department is concerned, it was earlier reported that the functions of the National "Green Card" bureau in Azerbaijan might be fulfilled by the Compulsory Insurance Bureau (ISB), which today includes 12 insurance companies operating in Azerbaijan. However, Xalilov said, the amendments also provide for granting all companies that have a licence to provide compulsory third party insurance (CTPI) services the opportunity to join the "Green Card" Bureau.

"The question is whether all these companies want to join the bureau because these are different areas and they demand individual financial assurance: the requirements of the "Green Card" provide for a separate financial fund without crossing other reserves," Xalilov said. However, he believes that this product could interest Azerbaijani insurance companies, on the basis of the need for a "Green Card" for travelling by car.

"Today, of the countries in the region only Azerbaijan, Georgia and Armenia are not members of this system. Our other neighbours have already joined it and, accordingly, the crossing of their borders by Azerbaijanis already requires having a "Green Card" which creates an additional market for local insurance companies," Xalilov pointed out.  

Back in February, at a session in Brussels, a tentative green light was given to Azerbaijan's joining the system. And the adoption of amendments is planned for 2015, depending on the procedures established for "Green Card" membership entry, Xalilov said.

In short, in a couple of years' time, Azerbaijani drivers will have one problem less and one incentive more to help the growth of statistics for foreign tourism.