The Central Bank of the Republic of Azerbaijan has approved changes to its criteria for identifying systemically important insurers. The revised framework assesses insurers across their impact on the insurance system, the wider financial system and the real economy, using three categories: size, diversification and substitutability. Insurers with a systemic importance index of at least 15 percentage points will be classified as systemically important. The changes remove the previous complexity category, introduce new indicators and weights, and add securities turnover to the methodology for the first time. Reinsurance premiums will cover only risks accepted from within Azerbaijan and will receive greater weight. For firms engaged exclusively in reinsurance, the number of insured objects will not apply, with its weight transferred to another indicator in the same category. The Central Bank’s Board will approve the list of systemically important insurers annually by Sept. 1, using an approach aligned with the methodology applied to the banking sector.
2026-09-04Central Bank of the Republic of Azerbaijan
Central Bank of the Republic of Azerbaijan revises systemic insurer assessment, sets 15 percentage point threshold
The Central Bank of the Republic of Azerbaijan has revised its methodology for identifying systemically important insurers and set a classification threshold of 15 percentage points. The framework now assesses size, diversification and substitutability across insurers’ effects on the insurance system, financial system and real economy, with the list approved annually by Sept. 1.