LAW OF THE AZERBAIJAN REPUBLIC

of May 22, 2007 No. 333-IIIQ

About compulsory insurance of professional responsibility of the auditor

This Law governs the relations on compulsory insurance of professional responsibility of the physical persons and legal entities rendering auditor services in the territory of the Azerbaijan Republic before subjects of audit, and determines their organizational, legal and economic basis.

Article 1. Basic concepts

The concepts used in this Law have the following values:

1.1. the auditor - the physical person or legal entity rendering in the procedure established by the legislation auditor services in the territory of the Azerbaijan Republic;

1.2. the subject of audit - the physical person or legal entity which signed the contract with the auditor on carrying out audit;

1.3. object of compulsory insurance of professional responsibility of the auditor - responsibility for the harm done to the subject of audit as a result of rendering services by the auditor;

1.4. professional responsibility of the auditor - the obligation of the auditor to compensate the harm done to the subject of audit as a result of rendering auditor services;

1.5. the insurer - the legal entity created for the purpose of implementation only of activities for insurance and reinsurance and who got special permission (license) in the procedure established by the legislation;

1.6. insurer - the physical person or legal entity which is rendering auditor services in the procedure established by the legislation, signed the agreement on insurance of the professional responsibility with the insurer;

1.7. insured event - the case which is under the agreement of compulsory insurance of professional responsibility of the auditor the basis for implementation of insurance payments to the insurer;

1.8. insurance premium - the sum of money which is subject to payment by the insurer to the insurer according to the agreement of compulsory insurance of professional responsibility of the auditor (further - the insurance contract);

1.9. insurance sum - extreme limit of the insurer liability on indemnification, the audit caused to the subject as a result of rendering auditor services;

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