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More legislative acts are available from this sourceLaw of the Azerbaijan Republic
18 February, 1997
 
 

Law of the Azerbaijan Republic
On social insurance




This Law regulates relationships in the area of social insurance, defines legal, economical and organisation grounds for social insurance in the Azerbaijan Republic.

Chapter I. General
Article 1. Concept of social insurance
Social insurance - is form of security intended for compensation of lost right to work, profits and also extra expenses of citizens envisaged by this Law, and for prevention of such losses.
Article 2. Forms of social insurance
Social insurance may be obligatory state insurance and voluntary (additional) insurance.
Obligatory state social insurance is implemented by employees with respect to all employees working under individual labour agreements (contracts). In situations envisaged by this Law other persons may be also liable to obligatory state social insurance.
Article 3. Principles of social insurance
Principles of social insurance are the following:
· state guarantee of continuity of social insurance;
· overall character of social insurance;
· provision of social insurance in all cases of disablement of the employee;
· equality of legal subjects of social insurance;
· compulsory state social insurance;
· guaranteed participation of public organisations in control over obligatory social insurance.
Article 4. Social-insured accident
Social-insured accident is such situation when insurant gets the right for insurance compensation to be paid by the insurer.
The following are regarded as social-insured accidents:
· on reaching pension age;
· disability;
· loss of breadwinner;
· temporary disability;
· pregnancy and confinement;
· childís birth;
· care of a child;
· death;
· need in recreation.
Obligatory state social insurance is applied in all cases specified in this Article, and voluntary (additional) insurance - in insurance cases chosen by the parties.
Article 5. Insurance documents
Documents confirming social-insured accidents and constituting basis for allocation of social insurance compensation are as specified by legislation.
Article 6. Kinds of social insurance compensations
The following insurance compensations are allocated in case of social-insured accident:
· state pensions allocated in compliance with the Law of the Azerbaijan Republic "On social welfare";
· addition to state pensions paid based on voluntary (additional) social insurance;
· compensation for temporary disability;
· maternity benefit;
· postnatal allowance;
· allowances to parents paid until children are of age specified by legislation;
· allowance for burial;
· full or partial compensation of expenditures for stay in sanatorium of insured persons.
Other kinds of social insurance may be applied according to legislation of the Azerbaijan Republic.
Article 7. Legislation on social insurance
Legislation on social insurance includes this Law and other normative-legal acts.

Chapter II. Parties in social insurance process. Rights and responsibilities
Article 8. Parties in social insurance
Parties in social insurance are insurers, insuring persons and insured persons (insurants).
Insurers are legal entities implementing obligatory state social insurance or voluntary insurance and controlling insurance funds as specified by laws of the Azerbaijan Republic.
Insuring persons are all employers operating in the Azerbaijan Republic and also other persons implementing social insurance of other persons.
Insured persons (insurants) are those persons in whose favour insurance is implemented.
Article 9. Rights and responsibilities of insurers
Insurers have the following rights:
· to demand that all employers insure employees using obligatory state insurance;
· to receive statements (extracts) from insurants specifying sums of social-insurance payments and grounds for that;
· to control that insurants observe rules of obligatory state insurance;
· to demand that obligations under the agreement of voluntary (additional) social insurance;
· to realise other rights envisaged by legislation.
Insurers must:
· take measures for being permanently solvent;
· provide estimation and payment of social-insurance sums in due time;
· fulfil obligations under the agreements of voluntary (additional) social insurance in due time and in full amount;
· fulfil other obligations envisaged by legislation.
Article 10. Rights and obligations of insurants
Insurants have the following rights:
· to take part in all forms of social insurance;
· to choose independently insurance company for voluntary (additional) social insurance;
· to demand that regulations of social insurance and provisions of agreements on voluntary (additional) social insurance are observed.
· Insurants must:
· register in insurance company which carries out voluntary state social insurance;
· pay instalment insurance premiums to the insurer within specified period;
· whenever insured accident occurs - pay insured persons insurance sums in due time and in an established order;
· fulfil other obligations envisaged by legislation.
Article 11. Rights and obligations of insured persons
Insured persons have the following rights:
· to demand that employers insure them using obligatory state social insurance;
· to choose independently insurer for voluntary (additional) social insurance;
· to demand that social-insurance premiums are paid to them in due time.
Insured persons must:
· register themselves with the company-insurer carrying out obligatory social insurance;
· to pay instalment insurance premiums in due time;
· to present to the insurer or to the insurant documents confirming existence of insured accident.

Chapter III. Obligatory state social insurance
Article 12. Persons liable to obligatory state social insurance
Obligatory state social insurance involves persons appointed to their posts by decrees of Milli Majlis of the Azerbaijan Republic, decrees and orders of the President of the Azerbaijan Republic; citizens of the Azerbaijan Republic and stateless citizens working under individual labour agreements (contracts) in all institutions, enterprises and organisations operating in the Azerbaijan Republic or belonging to Azerbaijan Republic but located in foreign states; persons who occupy electoral paid posts; public prosecutors, deputy prosecutors and assistants to prosecutors, inspectors of the procuratorís offices; members of the Board of barristers; persons who carry out individual business and production activity; foreign citizens in compliance with intergovernmental agreements.
Article 13. Registration of participants of obligatory state social insurance
Employers must register in the company-insurer carrying out obligatory state social insurance not later than one month after they have been registered as economic entities, and employers that are not economic entities - not later than one month after conclusion of individual labour agreement (contract) with presentation of data on number of personnel; persons who carry out individual business and production activity register themselves independently.
Procedure of registration of participants in obligatory state social insurance is established by relevant executive power body, which has control in the area of obligatory state social insurance.
Article 14. Instalment premiums in obligatory state social insurance
Instalment premium in obligatory state social insurance is sum of money paid to the company-insurer for instance.
Sum of instalment premium in obligatory state social insurance is established in percents against the amount of wages fund (income) and is paid at the expense of finances of insurant (insured person).
Instalment premiums in obligatory state social insurance are paid:
· by all employers (except kolkhozes, sovkhozes, inter-economy, agricultural enterprises and farmerís enterprises - at a rate of 35 percent of estimated amount of wages fund (income);
· by kolkhozes, sovkhozes, inter-economy agricultural enterprises, farmersí enterprises - at a rate of 25% of estimated amount of wages fund (income);
· by persons using hired labour force at home (cleaners, nurses, personal secretaries, drivers, etc.) - at a rate of 20% of estimated wages fund;
· persons appointed to their posts by Decrees of Milli Majlis of the Azerbaijan Republic, decrees and orders of the President of the Azerbaijan Republic; persons who occupy electoral paid posts; public prosecutors, deputy prosecutors and assistants to prosecutors, inspectors of the procuratorís offices; persons who work under individual labour agreements (contracts) and also service (military) when employed on the basis of contract - at a rate of 1 percent of the estimated wages fund;
· persons who carry out individual and production activity and members of the Board of barristers - at a rate of 10 percent of their income;
· tenants for the persons working with rented transport means - at a rate of 20 percent of rent sum;
· persons carrying out activity in line with the Law of the Azerbaijan Republic "About tax on income of physical persons in the Azerbaijan Republic" if their monthly wages relative to the average wages in the country for the last quarter is:
· up to 1-fold wages - 10 percent of average monthly wages;
· up to 2-fold wages - 15 percent of average monthly wages;
· up to 3-fold wages - 20 percent of average monthly wages;
· up to 4-fold wages - 25 percent of average monthly wages;
· up to 5-fold wages - 30 percent of average monthly wages;
· over 5-fold wages - 35 percent of average monthly wages.
· legal entities and physical persons paying authorís fee - 15 percent of estimated sum of the fee.
Employers and Board of barristers pay instalment premiums in obligatory state social insurance in cash and by bank transfer for every month, at the beginning of the next month, after deduction of paid social insurance sums; legal entities and physical persons paying authorís fee - on each estimation of the fee; persons carrying out individual business and production activity - for each quarter - at the beginning of the next quarter.
Article 15. Types of income which are subject to estimation of instalment premiums in obligatory state insurance
Instalment premiums are estimated from all types of payments for work, and income except compensations, allowances and income which, in compliance with instructions of respective executive power body, are not subject to social-insurance payments.
Article 16. Terms and procedure of payments under obligatory state social insurance
Terms and procedure of assignment of payments under the obligatory state social insurance are established by the Law of the Azerbaijan Republic "About provision of pensions to the citizens", Regulations "On estimation and payments under the obligatory state social insurance" approved by respective executive power body and other normative-legal acts.
Article 17. Payments under the obligatory state social insurance
Payments under the obligatory state social insurance are done by the insurant to the insured person, in case of liquidation of the insurant or suspension of its economic activity - by legal successor of the insurant, and if there is no such legal successor - directly by the insurer which has registered the insurant at a place of its work or residence.
Payments under the obligatory state social insurance to the persons who carry out individual business and production activity are done directly by the insurer.
Article 18. Management in the area of obligatory state social insurance
Management in the area of obligatory state social insurance is accomplished by respective executive power body. Said executive power body:
· has control over the means of obligatory state social insurance;
· gives explanations as per the use of this Law and takes normative acts within the limits of its authority;
· determines procedure of collecting instalment premiums under obligatory state social insurance;
· supervises if means of obligatory state social insurance are spent in a correct way;
· receives reports from insurants concerning obligatory state social insurance;
· imposes fines against insurants who violated regulations of obligatory state social insurance;
· applies financial sanctions to insurants violated regulations of obligatory state social insurance;
· imposes fines against officials of the insurant for systematic violation of regulations of obligatory state social insurance for a sum of 50% of their average monthly wages;
· whenever instalment premium under the obligatory state social insurance has not been paid, or there is delay with payment, this executive power body informs the insurant, and if said problem is not settled within certain period, suspends operations with money transfer to the bank accounts (except payments to the budget and other obligatory payments) in an order established by legislation;
· submits claim for payment of debts under obligatory state social insurance, by way of suspension of operations of insolvent insurants and sale of their property;
· on temporary decline of financial status of insurants assists them in settling with obligatory state social insurance;
· carries out other activities relevant to its status.
Article 19. Means of obligatory state social insurance
Means of obligatory state social insurance are concentrated in one fund and are used for financing social-insurance payments and other expenditures in line with this Law and other normative-legal acts.
It is prohibited to use insurance money with other objectives.
Article 20. Sources of money for obligatory state social insurance
Funds of obligatory state social insurance are formed at the expense of:
· incoming insurance instalments under the obligatory and voluntary (additional) social insurance;
· deductions from state budget;
· proceeds from financial sanctions and fines;
· proceeds from sale of tickets to the health resorts;
· bank credits;
· other profits (income) received in accordance with legislation.
Relevant executive power body exercising control in the area of obligatory state social insurance has the right to use 30 percent of money received from application of financial sanctions to remuneration of employees and development of production facilities.
Article 21. Financial sanctions for violation of regulations of the obligatory state social insurance
Relevant executive power bodies exercising control in the area of obligatory state social insurance have the right to apply the following financial sanctions to insurants:
· for violation of rules of registration under the obligatory state social insurance by the insurants - fine at a rate of 5 percent of social-insurance payment (instalment);
· for delayed presentation of reports and financial documents related to obligatory state social insurance - fine at a rate of 10 percent of social-insurance instalment estimated for the report period;
· for concealment of payments received for work and profits liable to obligatory state social insurance (under-estimation of social insurance payment) - fine at a rate of 50 percent, and should such actions repeat - at a rate of 100 percent of the under-estimated sum of social-insurance payment, with reimbursement of this sum;
· for deliberately overpaid social-insurance payment at the expense of funds of obligatory state social insurance - at a rate of 50 percent, and should such action repeat - at a rate of 100 percent of the overpaid sum, with reimbursement of this sum;
· for use of money of obligatory state social insurance with other objectives - fine at a rate of 50 percent of spent money, with reimbursement of these sums;
· for payment wages in an amount less than minimum wages established in the country - fine at a rate of 50 percent of difference between the sums of actually paid wages and minimum wages;
· when payment of instalment under the obligatory state social insurance has been delayed - penalty at a rate of 0,1 percent of insurance payment for each day of delay.
Sums of financial sanctions shall be withdrawn from the bank account of the insurant. If the insurant is not legal entity, or has no bank account, financial sanctions are applied based on the notaryís signature.

Chapter IV. Voluntary (additional) social insurance
Article 22. Right for voluntary (additional) social insurance
Citizens of the Azerbaijan Republic, stateless citizens, foreign citizens, all companies, enterprises and organisations have the right for voluntary (additional) social insurance.
Article 23. Insurers
Voluntary (additional) social insurance is accomplished by relevant executive power body, which is authorised to keep control in the area of obligatory state social insurance and also by private insurance companies formed specially with this objective.
Private institutions of social insurance must pass state registration in an order specified by legislation for legal entities, and get license for their activity.
Respective executive power body which issued a license, will keep control over permanent solvency of private organisations - insured entities.
Article 24. Kinds of payments under voluntary (additional) social insurance
Respective executive power body exercising control in the area of obligatory state social insurance may carry out voluntary (additional) social insurance in all kinds of payments envisaged in Article 6 of this Law as per private social insurance for all kinds of payments except state pensions.
Article 25. Insurance fund of private organisations of social insurance
Insurance fund of private organisations of social insurance is formed at the expense of resources of its founders, insurance instalments received under the agreements of social insurance, proceeds from commercial activity, other resources obtained legally. Organisation of social insurance has exclusive rights to dispose of insurance fund resources.
Article 26. Agreement of voluntary (additional) social insurance
Voluntary (additional) social insurance is implemented based on agreement of social insurance concluded between the insurer and the insurant (insured person). Agreement of social insurance specifies rights and obligations of the parties, sums of social insurance instalments and payments, insured accident, responsibilities of the parties and also other conditions, as agreed between the parties.
Article 27. Social insurance certificate (policy)
The insurer issues to the insurant (insured person) certificate (policy) of social insurance. The form of insurance policy is approved by respective executive power body.

Chapter V. Conclusions
Article 28. Relationship between the insurers and bank institutions
Payment for banking services - operations in connection with social-insurance instalments and payment of insurance premiums is governed by agreement concluded between respective executive power body carrying out control in the area of obligatory state social insurance and banking organisation.
All banking organisations not later than 10 days after they received letter of inquiry from the insurance company, must submit all relevant data.
Article 29. Arbitration
All disputes arising between the insurant and insured person (entity) with regard to social insurance are settled in compliance with the Law of the Azerbaijan Republic "On settlement of individual labour disputes", and disputes between the insurer and insurant - at the court of arbitration.
Article 30. Responsibility for violation of this Law
Persons guilty of violation of provisions of this Law will be responsible as is specified in legislation of the Azerbaijan Republic.
Article 31. International agreements
If provisions of international agreements with participation of the Azerbaijan Republic differ from provisions of this Law, provisions of the former shall apply.
 

President of the Azerbaijan Republic
Heydar Aliyev
Baku, 18 February, 1997