ALFA Insurance OJSC has been declared bankrupt on August 29th, following the decision of the Baku Administrative Economic Court No. 1, the Azeri news agencies inform. A Liquidation Commission has been established within the company, in charge with selling the companies' assets and paying its debts.

Previously, on August 26, the company's operating license was withdrawn by the Azerbaijan's Financial Market Supervisory Body, due to the sharp deterioration of Alfa Insurance's financial situation, the loss of assets and capital. Moreover, the company didn't create adequate reserves and fulfil its obligations.

Given the bankruptcy of its sole owner, Texnikabank, ALFA Insurance's financial situation became even more critical, as no capital injection was possible.

According to information provided by the Azeri financial press, the Supervisory Body together with the Azerbaijan Deposit Insurance Fund (ADIF), also liquidator of Texnikabank, tried to recover ALFA Insurance by selling its insurance portfolio. The operation failed as the company had insufficient technical reserves and low liquidity indicators.

For the time being, claims issued by ALFA Insurance's customers can be not paid yet. All claims are filled waiting for the Liquidation Commission to actually begin its activity and put in place the appropriate resources for claims payments, report the local press.