NBU eases forex restrictions in insurance sector, regulates repatriation of interest on govt bonds by foreign investors

MOSCOW. May 22 (Interfax) - The National Bank of Ukraine (NBU) has eased foreign currency restrictions in the insurance sector and introduced regulations of transactions related to the payment of interest on domestic government debt securities to foreign investors.

Insurers will now be able to make insurance payments in favor of non-residents and refund insurance payments to non-residents for prematurely terminated insurance (reinsurance) contracts received by insurers after February 24, 2022, including where there are relevant court decisions, Ukrainian media reported citing a statement on the NBU website.

As reported earlier, transactions involving insurance payments are currently allowed to foreign nuclear pools if carried out by authorized insurers on behalf of Nuclear Insurance Pool association members, those under Green Card international insurance contracts, under insurance contracts of persons traveling abroad, under contracts for private insurance other than life insurance, and under insurance contracts for treatment at foreign medical establishments, the transportation of patients, and those related to persons' death abroad (including transportation and funeral costs).

In addition, the NBU shall unblock currency transactions involving the payment of membership fees by insurers to international organizations and international associations of insurers. The Motor (Transport) Insurance Bureau of Ukraine will also be able to carry out currency transactions involving the payment of membership fees to the Council of the Bureau of the international Green Card motor insurance system.

As for transactions related to the payment of interest on government bonds to foreign investors, an additional requirement set for repatriating funds obtained from the payment of interest on government bonds after April 1, 2023 allows the repatriation of such funds only by investors holding these bonds for at least the past 90 consecutive calendar days prior to receiving interest. This should help prevent premature repatriation of investments by foreign investors.

As reported earlier, the NBU allowed the repatriation of interest on government bonds after April 1, 2023 to stimulate non-residents to reinvest the principal amount and funds accumulated in hryvni on the primary government debt market.