GEORGIA: BANK OF GEORGIA IS CREATING ITS INSURANCE COMPANY, WHILE INSURERS DEMAND TO LIMIT ACCESS OF THE BANKS TO THE INSURANCE MARKET

According to Devi KHECHINASHVILI, Chairman of the Board, Georgian Insurance Association, Bank of Georgia is creating its own insurance company. The new insurer already received a permission from the National Bank and is going to apply to the State Insurance Supervision Service.

Since the Bank of Georgia is one of the two main banks of the country, creation of an insurance company requires an appropriate permission from the National Bank. However, at this moment representatives of the Bank do not provide any details about the start of the new company’s operation, its name or segment of its planned insurance activity.

Regarding creation of the new insurer, the representatives of the National Bank explained that commercial banks are allowed to participate as mediators on the financial market, banks have the right to create financial subsidiaries, including insurance companies. This is not considered as their non-core business and does not contradict the existing legislation.

At the same time 12 insurers of Georgia protest against banks’ interference into insurance business. According to representatives of those insurers, banks, that have their own insurance companies, do not give loans to other market participants due to competition while providing unlimited financial support to theirs insurance companies.

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