UKRAINE: The new version of the Law "On Insurance" adopted in the first reading

22 June 2021 — Marina MAGNAVAL
The Verkhovaya Rada of Ukraine adopted in the first reading the Law of Ukraine "On Insurance" No. 5315, which contains norms on the activities of insurers, insurance contracts, intermediaries, and interaction with consumers of insurance services, Forinsurer wrote.

The draft law considers the key requirements of the European Union legislation, which Ukraine is obliged to follow in accordance with the Association Agreement with the EU, as well as the principles of the International Association of Insurance Supervisions (IAIS).

The new law will allow the NBU (National Bank) to switch from licensing certain types of insurance to licensing insurance classes; provides for the possibility of changing the scope of a license - to add other classes (risks within the classes) of insurance to the existing ones of an insurer or to combine the activity of inward reinsurance with direct insurance. The draft law proposes to significantly tighten the licensing standards for companies, form an effective management system and ensure transparency of the ownership structures of the insurance market.

The law establishes differentiated approaches to the size of insurers' charter capital: UAH 32 million (~EUR 0.98 million*) for non-life insurers, UAH 48 million (~EUR 1.48 million) for life insurers, liability insurance, credit insurance, sureties, and reinsurance. Upon registration, insurers will provide three-year business plans.

The law also provides for mandatory disclosure to consumers of comprehensive information about the terms of insurance contracts and insurance premium amounts. Other requirements will include disclosure of the cost of insurance products, mandatory disclosure of the remuneration to intermediaries or brokers, payable by consumers.

*at the following exchange rate:

1 EUR = 32.4424 UAH (21.06.2021)

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