NBU initiates Ukrainian insurance market's transition to European standards
MOSCOW. Nov 20 (Interfax) - The National Bank of Ukraine (NBU) has drafted a regulation on the transition of the Ukrainian insurance market to European Solvency II standards to bring insurers into line with directives of the European Parliament and the Council of the EU, Ukrainian media said, citing the NBU website.
The regulation on certain requirements for insurers has been drafted and put up for public discussion. There are two sets of requirements that concern the solvency and investment activity of insurers.
The first is solvency requirements: specifically, it establishes the procedure for calculating regulatory capital, taking into account restrictions on the composition and structure of assets for their calculation, as well as the procedure for calculating solvency capital. Thus, the minimum capital for certain categories of insurers, including life insurers and non-life insurers, with extensive volumes of activity has been set at not less than UAH 48 million, and for others at UAH 32 million.
Insurers will be able to benefit from a simplified approach to solvency capital calculation based on insurance premiums, insurance claims and technical reserves, until 2027.
The second set of requirements concerns investment activity, including assets to cover technical reserves and restrictions on investment.
The regulation will take effect on January 1, 2024, and there will be a six-month period to allow insurers to bring their operations into line with the new requirements.
The deadline for submitting comments and proposals to the draft is December 18, 2023.
The European Union's Solvency II Directive primarily deals with the size of capital insurance companies are required to hold to reduce the risk of insolvency. Under the directive, the next steps to tighten the solvency requirements for insurers in Ukraine will include determining a procedure for assessing certain categories of eligible capital and introducing requirements for calculating solvency capital and minimum capital using the baseline approach for certain categories of insurers from 2027.