According to the information provided by the NBU as of September 30, 2019, 234 insurance companies were registered in the State Register of Financial Institutions. Nevertheless, a number of problems that have developed and have existed for several years do not allow the insurance market to develop effectively. Among the key problems, the NBU notes the following:
- Low solvency and liquidity (under current regulation, insurance companies can significantly lower reserves and overstate assets, which does not allow an objective assessment of solvency).
- Imperfection of business models of insurers (the vast majority of insurance companies in Ukraine operate without a clear development strategy and business model. Insurance activity is carried out more likely with the aim of withdrawing capital or optimizing taxes).
- Insufficient market transparency and problems in corporate governance (lack of mechanisms for monitoring the proper disclosure of the ownership structure of insurance companies, lack of standards and requirements for the business reputation of owners and persons performing key functions in insurance companies).
- The problem of protecting the rights of consumers of insurance services (in Ukraine there is no mechanism for guaranteeing insurance payments under long-term life insurance contracts).
1.2. Combination of activities (transition from licensing of certain types of insurance to licensing by insurance classes).
1.3. Compulsory types of insurance (a substantial reduction in the types of compulsory insurance, which are currently irrelevant) is planned.
1.4. Authorization of insurance intermediaries (implementation of authorization of insurance and reinsurance brokers, insurance agents and financial consultants).
1.5. Business plan (the regulator will evaluate the business plan before issuing a license).
1.6. Transparent ownership structure, obtaining approval for the acquisition of substantial participation (full disclosure of information about the structure and beneficiaries).
1.7. Corporate governance (assessment of the corporate governance system at the stage of obtaining a license).
1.8. Tighter requirements for key persons (governing bodies, financial monitoring and internal audit, accountant).
1.9. Creation of an effective system of internal control and risk management (the requirements for such components will be established by the regulator).
- Norms and solvency.
2.2. Assessment of the value of assets and the adequacy of the formed reserves (increasing requirements for the acceptability of assets, development of recommendations and requirements for assessment procedures for required reserves).
2.3. Strengthening the role of actuaries (revision of requirements for actuaries).
- Prudential supervision.
- Consumer protection and proper market behavior.
- Financial monitoring.
- Reporting and external audit.
- Termination of business and exit from the market.
- Legislative changes.
We remind you that from July 1, 2020, the NBU becomes a regulator and supervisor in the insurance market. The NBU is confident that through the implementation of the program "The Future of Regulation of the Insurance Market in Ukraine", the National Bank will be able to build a strong insurance sector that can qualitatively perform its main function - to protect the population and business from possible losses in the event of insurance events.