By KYIV. Nov 20 (Interfax-Ukraine) – The National Bank of Ukraine (NBU) has developed a regulation on the transfer of the Ukrainian insurance market to European standards to bring the activities of insurers into compliance with Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II).
As reported on the NBU website, the regulation on establishing requirements for ensuring the solvency and investment activities of the insurer, developed and proposed for public discussion, consists of two main blocks.
The first block includes requirements for ensuring solvency, in particular, it establishes the procedure for calculating regulatory capital and acceptable regulatory capital, taking into account restrictions on the composition and structure of acceptable assets for their calculation, as well as the procedure for calculating solvency capital. Thus, the minimum capital under the simplified approach for certain categories of insurers, in particular life insurers and non-life insurers, with significant volumes of activity is set at no less than UAH 48 million, for others – UAH 32 million.
Insurers will use a simplified approach to calculating solvency capital, taking into account indicators of insurance premiums, insurance payments, technical reserves, etc. until 2027.
The second block includes requirements for the insurer’s investment activities, including assets to cover technical reserves and restrictions on investment.
The NBU said that the regulation will come into force on January 1, 2024 and will provide for a six-month period for insurers to bring their activities into compliance with the new requirements. After this date, the National Bank will not apply sanctions against insurers for violation of solvency requirements if plans for resumption of activities and/or financing are implemented.
Comments and proposals for the draft will be accepted until December 18, 2023
The EU Solvency II Directive concerns primarily the amount of capital that insurance companies must have in order to reduce the risk of insolvency. The next steps to tighten the requirements for the solvency of insurers in Ukraine, according to this directive, will be the determination of the procedure for assessing certain categories of eligible assets and the introduction, from 2027, of requirements for calculating solvency capital and the minimum capital according to the basic approach for certain categories of insurers.
