UKRAINE: supervision and regulation of the insurance market to be transferred to the National Bank of Ukraine

18 September 2019 — Marina MAGNAVAL
On September 12, 2019 the Verkhovna Rada of Ukraine adopted a bill on "Amending certain legislative acts of Ukraine, concerning the consolidation of the state functions regulating the financial services market", which provides for separation of functions of the National Commission for the financial services market, Forinsurer reports.

The law provides that the supervision and regulation of the insurance market, leasing and factoring companies, credit unions, and other financial non-banking entities, to be transferred to the National Bank, while the National Commission for securities and stock market will regulate non-state funds. The new regulatory model will allow for the finding of new growth points for non-banking financial market, as well as maximize the protection of the consumers of the financial and insurance services.

The transitional period during which the National Commission for financial services market will perform its current regulation is 10 months (until August 1, 2020). The National Bank will develop new standards by this date.

A risk-based approach will be introduced to allow for forecasting problems in companies and take preventive measures in time, as well as new standards of corporate management - to enhance the quality of the companies' operations and improve consumer protection.

Participants of the insurance market supported the reform of the non-banking financial sector, aimed at strengthening of state regulation in order to ensure presence of solvent insurance companies on the market able to fulfill their obligations to their clients. This will help with making the insurance market of Ukraine transparent, solvent, customer-oriented and attractive for investors. Among the main problems of the current situation specialists note: lack of legislation related to insurers' exit from the market, when clients do not get compensation and can't protect their rights, as well as a way too high number of market participants, whose reliability can't be verified and confirmed - these and other problems reduce confidence in the Ukrainian insurance sector.

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