2022 – the way from panic to development and planning

On 17.02.2023, at the regular meeting of the General Meeting, insurers approved the report on the results of the Association’s work in 2022

On 17.02.2023, at the regular meeting of the General Meeting, insurers approved the report on the results of the Association’s work in 2022.

An extremely difficult year for Ukraine and the insurance market can be briefly described as a way from panic to development and planning. The war did not affect the purpose and principles of the NAIU community: we continue to direct our activities and support the Regulator on the way to the formation of a solvent, sustainable, competitive insurance market in Ukraine with proper protection of the rights of insurance consumers.

The composition of the Presidium of the National Association of Insurance of Ukraine remained unchanged, which ensures the sustainability of the Association’s goals and principles.

We fulfill the task – to STAND and work on the task – to REBUILD and DEVELOP!

Сommitment to the principles on the way to the purpose unites the NAIU community, and a brief overview of the activities in recent years is a proper confirmation of this.

During 2020-2022, the Association “National Association of Insurers of Ukraine” actively participated in the development, processing and improvement of legislation in the field of financial services, in particular in the field of insurance, organization and conduct of examination of legislative and regulatory acts, as well as their projects that contribute to the development and functioning of the financial services market and submission of proposals to government agencies on the activities of the financial services market.

The participation of the National Association in the development and submission of proposals to the provisions of draft regulatory acts on the activities of insurers is in line with the principles set out in the White Paper “The Future of Insurance Market Regulation” of the National Bank of Ukraine and is in any case aimed at:

  • development of a solvent, financially sound, competitive and stable insurance market, the means of achieving which is the transparency of the insurance market functioning increasing its attractiveness to investors;
  • increasing the solvency and stability of insurance companies;
  • diversification of insurance products in the insurance market;
  • ensuring high standards of business conduct and consumer protection of consumers;
  • improving the regulatory framework of Ukraine for insurance and the activities of and the activities of insurers.

The proposals of the National Association do not affect the interests of individual NAIU members and are not aimed at limiting the competitive environment or creating a favorable competitive environment for individual NAIU members.

The NAIU Members are the top insurers of Ukraine.

Within 2 years, the NAIU analyzed and developed proposals for the following draft regulations:

  1. The Regulation on mandatory criteria and standards for capital adequacy and solvency, liquidity, profitability, asset quality and riskiness of insurer operations (adoption of the draft has been postponed until the end of martial law in Ukraine)
  2. The Regulation on determining the conditions for conducting financial services activities (the Resolution was repealed by the National Bank Resolution No. 153 of 24.12.2021);
  3. The Regulation on Licensing and Registration of Financial Service Providers and Conditions for Conducting Financial Services Activities (approved by Resolution of the Board of the National Bank of Ukraine No. 153 dated 12/24/2021);
  4. The new version of the Law of Ukraine “On Insurance”;
  5. The Law of Ukraine “On Financial Services and State Regulation of Financial Services Markets” (expires on January 01, 2024);
  6. The Law of Ukraine “On Financial Services and Financial Companies” (to enter into force on January 01, 2024);
  7. The new version of the Law of Ukraine “On Compulsory Insurance of Civil Liability of Owners of Land Vehicles”;
  8. The Rules for Preparation and Submission of Reports to Non-Banking Financial Services Market Participants (approved by the Resolution of the Board of the National Bank of Ukraine No. 123 dated November 25, 2021);
  9. Regulation on Supervision by the National Bank of Ukraine of Compliance by Financial Services Market Participants with the Legislation on Protection of Financial Services Consumers’ Rights (approved by Resolution of the Board of the National Bank of Ukraine No. 15 dated 09.02.2021, expired according to Resolution of the Board of the National Bank of Ukraine No. 198 “On Approval of the Regulation on Supervision by the National Bank of Ukraine of Compliance by Supervised Objects of Supervision with the Legislation of Ukraine on Protection of Financial Services Consumers’ Rights and Limited Payment Services, Requirements” dated 02.02.2022).
  10. The Regulation on the Procedure for Supervision of Non-Bank Financial Groups on a Consolidated Basis (approved by Resolution of the Board of the National Bank of Ukraine No. 128 dated November 2, 2021);
  11. The Regulation on the Procedure for Disclosure of Information by Non-Bank Financial Institutions (approved by the Resolution of the Board of the National Bank of Ukraine No. 114 dated November 05, 2021);
  12. The Regulation on the conduct of agricultural insurance activities with state support (approved by the Resolution of the Board of the National Bank of Ukraine No. 108 of 10/20/2021);
  13. The Regulation on reinsurance with a non-resident insurer (reinsurer) (approved by the Resolution of the Board of the National Bank of Ukraine No. 107 dated 10/20/2021);
  14. The Regulation on the Registration of Insurance and Reinsurance Brokers and Conditions for Conducting Intermediary Activities in the Insurance Sector (approved by the Resolution of the Board of the National Bank of Ukraine No. 135 dated June 30, 2022);
  15. Initiative to amend the Regulation on Requirements for the Ownership Structure of Financial Service Providers (approved by Resolution of the Board of the National Bank of Ukraine No. 30 dated 04/14/2021);
  16. The Regulation on the Organization of the Risk Management System in Financial Service Providers and Non-Bank Financial Groups (Draft Resolution of the National Bank of Ukraine);
  17. The Regulation on the Organization of the Internal Control System in Financial Service Providers and Non-Bank Financial Groups (Draft Resolution of the National Bank of Ukraine);
  18. The Guidelines for the organization of corporate governance in financial service providers and non-bank financial groups (draft approved by the Board of the National Bank of Ukraine);
  19. The Regulation on Determining the Methodology for Set Insurance Reserves and Requirements for the Methodology for Calculating the Surrender Value and Amendments to Certain Regulatory Acts of the National Bank of Ukraine (Draft Resolution of the National Bank of Ukraine);
  20. The Law of Ukraine on Amendments to the Customs Code of Ukraine to bring it in line with the Law of Ukraine “On Insurance” (draft);
  21. Support for the Resolution on the Insurance Amounts under Compulsory Insurance Contracts for Civil Liability of Owners of Land Vehicles (approved by the Resolution of the Board of the National Bank of Ukraine No. 109 dated May 30, 2022). Amounts of insurance amounts under contracts of compulsory insurance of civil liability of owners of land vehicles concluded after the entry into force of this resolution: 1) for damage caused to the property of victims, in the amount of UAH 160000 per victim; 2) for damage caused to the life and health of victims, in the amount of UAH 320000 per victim);
  22. Support for the Resolution on Certain Issues of Compulsory Insurance of Civil Liability of Owners of Land Vehicles (approved by the Resolution of the Board of the National Bank of Ukraine No. 108 dated 30.05.2022: Regulation on the list, value and procedure for applying adjustment coefficients when insurers conclude contracts of compulsory insurance of civil liability of owners of land vehicles; Regulation on a single centralized database on compulsory insurance of civil liability of owners of land vehicles; maximum amounts of insurance payment for damage caused to the property of victims in case of registration of documents on a road accident without the participation of authorized persons.
  23. Support for the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine on the First Steps of Business Deregulation through Civil Liability Insurance” after finalization and consideration of the proposals and comments of the NAIU (the draft law in the first reading was not supported by the NAIU, in particular, for its inconsistency with the principles and norms laid down in the new Law of Ukraine “On Insurance”);
  24. Appealing to the National Bank of Ukraine with an initiative to amend the Order of the National Commission for State Regulation of Financial Services Markets, the Resolution of the Cabinet of Ministers of Ukraine and the State Tax Service on the procedure for applying subparagraphs 165.1.27 and 165.1.28 of paragraph 165.1 of Article 165 of Section IV of the Tax Code of Ukraine, on amending the regulatory documents governing the circulation of medical records and amending the Concept of Healthcare Informatization;
  25. Appeal to the National Bank of Ukraine with a proposal to extend the NBU Regulation “On the Use of Digital Handwritten Signatures in the Banking System of Ukraine” to insurers, which is caused by the need to use remote methods of concluding contracts and document flow, in the conditions of mobile communication interruptions and difficulties in concluding contracts using one-time identifiers, the need to cooperate with partner banks using unified methods of signing documents, we consider it expedient to implement;
  26. Proposals for Amendments to the Methodology for Calculating the Surrender Value under Life Insurance Contracts (approved by Order of the National Commission for State Regulation of Financial Services Markets No. 4258 dated November 14, 2017);
  27. Appeal to the National Bank of Ukraine with a proposal to regulate the procedure for payment of insurance premiums under life insurance contracts concluded in the currency of insurance by amending the Regulation on transactions with currency values (approved by the NBU Board Resolution No. 2 of January 2, 2019);
  28. Together with the National Bank of Ukraine, proposals were prepared to amend the Tax Code of Ukraine to harmonize the taxation of insurance payments under long-term life insurance contracts;
  29. Proposals were submitted to the draft Procedure for the submission of reports by an insurance organization on non-state pension provision, which were partially taken into account (approved by the Decision of the National Securities and Stock Market Commission on 20.01.2022. N 22)
  30. The draft Law of Ukraine “On Environmental Insurance” was not supported, in particular for its inconsistency with the principles and norms laid down in the new Law of Ukraine “On Insurance”.

In particular, proposals were submitted for projects to improve Ukraine’s regulatory framework for the development of the insurance market, the implementation of the Split project and the Financial Market Development Strategy until 2025, and the implementation of the White Paper “Future Insurance Market Regulation” by the National Bank of Ukraine.

In 2020-2021, the NBU also actively worked on the feasibility of introducing an effective system for guaranteeing insurance payments under life insurance contracts together with the National Bank of Ukraine and the Deposit Guarantee Fund.

Interaction of NAIU with the authorities and international organizations

NAIU performs representative functions of the interests of NAIU members, constantly interacts and participates in the work of the relevant committees of the Verkhovna Rada of Ukraine on Finance, Tax and Customs Policy and the Committee on Social Policy and Protection of Veterans’ Rights, other committees and working groups of the Verkhovna Rada of Ukraine, the National Bank of Ukraine, the Cabinet of Ministers of Ukraine and other government authorities.

The National Association maintains direct international contacts, relations, concludes relevant agreements, and participates in the implementation of measures that do not contradict Ukraine’s international obligations, interacts with other professional associations of the financial market in order to create a civilized and highly professional financial services market in Ukraine, and interacts with non-governmental and international funds and organizations.

Times of the coronavirus crisis

NAIU sent appeals to the National Commission for State Regulation of Financial Services, the Cabinet of Ministers of Ukraine, the Tax Inspectorate, the Ministry of Health and the Ministry of Finance regarding amendments:

  • to the Tax Code of Ukraine aimed at accelerating and simplifying insurance payments under health and life insurance contracts;
  • to the regulatory acts of the Ministry of Health of Ukraine and the Cabinet of Ministers of Ukraine to relax requirements in the field of insurance and reinsurance;
  • to simplify the procedure for exchanging and obtaining information and concluding contracts, and to set out general anti-crisis measures to support the functioning of insurers.

Participation in a socially important project – Healthcare Reform in Ukraine

  • participation in meetings of the Verkhovna Rada Committee on National Health, Medical Care and Health Insurance (in terms of insurance medicine);
  • development of draft regulations with the involvement of representatives of the NAIU, from which a working group was created;
  • implementation of activities on integration and interaction with the Central eHealth Database of Ukraine (launch of the program);
  • participation in the development of the concept of the draft law on the creation of a mechanism for additional payments for medical services that are not included in the state-guaranteed packages;
  • a memorandum with the Ministry of Health has signed;
  • interaction with the relevant committee of the Verkhovna Rada of Ukraine on the plan to restore the healthcare system in terms of insurance medicine.

Participation in a socially important project – Pension Reform in Ukraine

  • submission of proposals to the draft Law of Ukraine “On Compulsory Accumulative Pension Provision”;
  • advocating for the admission of life insurers to participate in the second level of pension reform, both at the payment and accumulation stages.

Times of war and solving the problems that have arisen as a matter of priority

Since the beginning of the full-scale Russian invasion and up to now, the NAIU has been constantly studying the urgent needs of the insurance market, the problems and difficulties that result from it, and communicating with the National Bank of Ukraine to resolve such issues, in particular:

  • restrictions on cross-border currency transfers and, as a result, the inability to carry out reinsurance operations;
  • mobilization of critical employees of companies;
  • the need to obtain loans secured by government bonds;
  • registration of road accidents and remote settlement.

Coordination of the NAIU participants, holding meetings on the practical application of the “martial law” Resolutions of the Board of the National Bank of Ukraine, namely:

  • On the operation of the banking system during the period of martial law No. 18 dated 24.02.2022
  • On regulation of the Activities of Non-Banking Financial Services Market Participants, Non-Banking Financial Groups, Payment Market Participants, Collection Companies and Legal Entities Licensed to Provide Collection Services to Banks No. 39 dated 06.03.2022;
  • On the Amendments to the Resolution of the Board of the National Bank of Ukraine No. 153 dated December 24, 2021 “On Approval of the Regulation on Licensing and Registration of Financial Service Providers and Conditions for Conducting Financial Services Activities” No. 176 dated August 12, 2022.
  • On the peculiarities of applying the procedures for registration and licensing of non-banking financial services market participants during the period of martial law No. 177 of 12.08.2022.
  • On the Amendments to the Resolution of the Board of the National Bank of Ukraine dated March 06, 2022 No. 39 “On Regulation of the Activities of Non-Banking Financial Services Market Participants, Non-Banking Financial Groups, Payment Market Participants, Collection Companies and Legal Entities Licensed to Provide Collection Services to Banks” No. 179 dated 12.08.2022.

Mutual work of the National Association and its Members

The NAIU provides information, advisory, methodological and organizational support to its Members, promotes professional development and professionalism, summarizes and disseminates best practices in the field of insurance:

  • weekly analysis of rulemaking and draft acts in the field of insurance and related relations;
  • prompt processing of adopted regulations, providing a brief description, implementation plan, problematic issues and key innovations;
  • interaction with other associations, bodies and institutions is carried out in order to consolidate certain issues of the participants’ activities;
  • study and disseminate the practice of application and implementation of certain norms and processes by the participants;
  • problematic issues are worked out in order to obtain official explanations or prepare proposals for amending acts in order to ensure proper application and implementation of the introduced or updated regulations by the participants.

Committees (working groups) are established by the NAIU to develop regulations on a permanent or temporary basis and are currently in place:

  • The Life Insurance Committee (within the framework of the NAIU, which includes Members of the Association holding a life insurance license)
  • Financial Monitoring Committee;
  • MTPL Committee.

NAIU and EMA became partners in the initiative to develop open banking in Ukraine and signed a Memorandum on November 30, 2021. The partnership of the Associations within this initiative will ensure a seamless cross-sectoral exchange of information, on the basis of which the parties will create innovative and modern insurance and payment products for customers.

Implementation of the project of information exchange between insurance companies “PRIMA”

Throughout the entire activity of the NAIU, the project of information exchange between insurers participating in the “PRIMA” (Information Disclosure Project. Monitoring and Analysis) is constantly operating for the participants of the NAIU and is now open to the public to visualize data on the performance indicators of the Ukrainian insurance market.

The PRIMA Project provides an opportunity to receive up-to-date information and prompt access to reporting data, operational and financial performance indicators of insurers of the NAIU Members and other insurers of Ukraine, which is constantly updated along with the disclosure of data by the National Bank of Ukraine.

During 2020-2022, the NAIU updated and streamlined the system of accumulation and storage of data, both those provided directly by the participants and those published by the National Bank of Ukraine, which creates an opportunity for prompt analysis of any indicators, and created interactive dashboards based on MS PowerBi software.

Visualization in the form of an interactive presentation of a part of the data in MS PowerBi software and convenient visual display of insurers’ data allows all interested audiences to see the main trends of the insurance market, draw conclusions about its activities and development trends.

The PRIMA Project consists of two blocks: non-life and life, and has two versions: an internal version open only to NAIU Members and a public version open to the public, which generally repeats the internal version, but the information is visualized in an impersonal way and published on the NAIU website and has an English version.

In order to identify trends in the insurance market, identify key priorities and new development opportunities, the NAIU office, within the framework of the PRIMA Project, holds strategic sessions for its participants, which allows them to plan their activities in the future, taking into account economic factors, inflationary processes and changes in legislation.

Annual activity plan of the NAIU for 2023:

  1. Improving the taxation of insurance activities:
  • tax incentives for the development of voluntary health insurance;
  • stimulation of life insurance through the introduction of tax incentives;
  1. Reforming tax legislation to avoid double taxation and in connection with the transition to IFRS 17;
  2. Implementation of the Law of Ukraine “On Insurance”, updating the Law of Ukraine “On Compulsory Insurance of Civil Liability of Owners of Land Vehicles”;
  3. Improvement (simplification) of financial monitoring;
  4. Implementation of IFRS 17;
  5. Digitalization of insurance activities;
  6. Interaction with the NBU, including regulatory regulation of insurers’ activities;
  7. Interaction with the committees of the Verkhovna Rada on the regulatory regulation of insurers’ activities;
  8. Interaction with the MTIBU, including the improvement and implementation of the regulatory framework for compulsory insurance;
  9. Development of international relations, in particular, through the acquisition of membership in international insurance and related organizations;
  10. Improving the legal and regulatory framework of Ukraine in order to develop the insurance market based on the principles set out in the NBU White Paper;
  11. Improvement of the Project of information exchange between insurers PRIMA.