The Central Bank of Azerbaijan (CBA) has made changes to the rules for calculating insurance premiums for compulsory civil liability insurance for motor vehicle owners.
“Elchi” reports that the relevant decision was adopted by the CBA Board on April 1, 2026.
According to the decision, the previously applied Bonus-Malus (BM) system is being replaced by an “insurance history coefficient” mechanism. Under the new approach, the calculation of the insurance premium will now be determined based on the insured’s previous insurance history and at-fault incidents.
According to the changes, the insurance history coefficient has been set at a minimum of 0.60 and a maximum of 3. The coefficient will be formed separately for each person and may be applied differently across various vehicles.
According to the new rules, when concluding an insurance contract for individuals, the indicator of the person with the highest insurance history coefficient among the vehicle owners will be taken as the basis. In addition, persons who have owned the vehicle within the last month will also be taken into account in the calculation.
The decision also states that for legal entities (excluding taxi activities), the insurance history coefficient is set at 1, and no additions or discounts are applied to this coefficient.
According to the document, a 5% discount will be applied each time for persons with an accident-free insurance history. Conversely, in the event of an at-fault insurance incident, 30% will be added to the insurance history coefficient for each incident.
At the same time, the coefficients applied depending on the number of vehicle owners have also been updated. Thus, the coefficient is set at 1 if the number of owners is 4 or fewer, and 1.15 if it is 5 or more.
According to the decision, the Bonus-Malus indicators formed under the previous system will be integrated into the new mechanism and will be applied as the insurance history coefficient during the transition period.
It should be noted that the changes will come into force 2 months after the date of the decision’s publication.