The level of capital declared by many insurance companies is overestimated, and financial stability indicators are not true, according to the Financial Stability Report of the National Bank of Ukraine (NBU) published on Wednesday.
According to the report, the central bank is concerned about most of the requirements to reinsurers. At the same time, about a third of the premiums were transferred to insurers whose solvency is uncertain, which means that the probability of receiving reimbursement is small.
In addition, some insurance companies hold funds in bank accounts exclusively for reporting on quarterly dates. After that, the funds from the accounts are transformed into other assets. Of 150 financial institutions analyzed, similar behavior is characteristic of more than half of the companies. But in general, their deposits in banks make up less than 20% of the total deposits of insurers.
The NBU said that insurance companies need high-quality and liquid assets in order to make insurance payments on time. Such assets, in particular, are government bonds and funds in deposit accounts. At the same time, many insurers invest in illiquid assets which real market value is impossible to establish – capital of enterprises, shares and investment certificates. The income from such assets declared in their financial statements averages less than 5% per year, which is significantly lower than the current profitability of deposits or government bonds, and it is almost impossible to turn them into liquid assets. Some of the securities are seized or their circulation is stopped. Another significant component of the assets of a number of companies – accounts receivable – often in practice has no market value.
According to the regulator, the insurance market requires a fundamental change in the rules of the game, since its development is constrained by imperfect regulation, which in many aspects is not consistent with the Insurance Core Principles of the International Association of Insurance Market Supervisors (IAIS) and the European Solvency directive. Consumers should receive additional guarantees that their rights will be protected, and they will receive insurance indemnities on time and in full, the central bank said.
“The priority for the NBU will be to strengthen the financial stability of insurance companies, introduce the best corporate governance practices and internal supervision systems, respond in advance to financial problems and violations of the protection of the rights of consumers of financial services,” the NBU said.
The bus operator FlixBus (Germany) will resume operations in Ukraine on separate international routes from June 25.
According to the company’s press service, tickets are already on sale for trips from Kyiv via Zhytomyr, Rivne, Lviv, Uzhgorod to Krakow, Budapest, Vienna and more than a dozen German cities, and from July 3 green branded buses will travel from Odesa via Vinnytsia, Khmelnytsky and Ternopil to Plzen through Prague.
“So far we have renewed part of our routes from Ukraine, but we plan to gradually restore them all. Closing the borders has become a challenge for the entire industry of international transportation, but even taking into account severe restrictions on the borders with the EU countries that exist now, we see a demand for trips to the countries of Europe. First of all, these are Poland, Germany and the Czech Republic,” the press service said citing director of FlixBus in Ukraine and Poland Michal Leman.
The international bus carrier Ecolines, which includes the Ukrainian carrier Autolux, is resuming trips from Kyiv to Gdansk and Torun (Poland) from June 25.
According to the company’s website, it is also planned to resume trips from Kyiv to Zielona Gora from July 1.
As previously reported, Ecolines launched traffic from Kyiv to Wroclaw on June 22, and from Kyiv and Odesa to Minsk on June 25.
Hungary will open all checkpoints on the border with Ukraine from Monday, June 29, Minister of Foreign Affairs and Trade of Hungary Peter Szijjarto has said.
“On Monday, next week, we will open all checkpoints between Hungary and Ukraine… Thus, we will ensure the movement across the border. However, the rules of entering another country will remain in effect,” he said during a joint press briefing with his Ukrainian counterpart, following the fourth meeting of the Joint Intergovernmental Ukrainian-Hungarian Commission on Economic Cooperation in Kyiv on Thursday.
The minister also said that the rules for entering Hungary will not change: Hungarian citizens will be able to enter the country without restrictions, and Ukrainians will transit Hungary or move at a maximum distance of 30 kilometers for 24 hours.
Szijjarto noted that he could not voice the dates of resumption of air and railway traffic between Ukraine and Hungary so far.
The European Bank for Reconstruction and Development (EBRD) is ready to continue work with the National Securities and Stock Market Commission on capital market development initiatives, the bank’s press service has said.
“We look forward to working with the securities commission on other capital market development initiatives,” Matteo Patrone, the EBRD Managing Director for Eastern Europe and the Caucasus, said.
“The European Bank for Reconstruction and Development has worked closely with the National Securities and Stock Market Commission of Ukraine on the preparation of this framework. The work was also coordinated with and supported by the International Swaps and Derivatives Association (ISDA). The EBRD welcomes the approval as an important new chapter in the development of Ukraine’s capital market,” the bank said on its website.
“The new law will contribute to the establishment of a derivatives market in Ukraine,” Patrone said.
“The new law puts Ukraine on the map for the derivatives market and for netting, allowing companies to safely and efficiently hedge their risk and exposure, thus contributing to the development of a local currency financial market,” the report says.
The EBRD is the largest international financial investor in Ukraine. To date, the bank has made a cumulative commitment of almost EUR15 billion through 466 projects in the country.
Capital LLC (Kapital, Kyiv) has commissioned the second phase of the Oberig clinic, co-owner of Oberig and the Milk Alliance group of companies Oleksandr Derkach said on Facebook.
“As you already understood from my previous posts, our construction was completed. The second phase of the Oberig clinic was commissioned, and we began to receive the first patients there. Some 25,000 square meters, seven above ground floors and three underground, a large parking lot for employees and visitors, a charger station for electric vehicles, etc. Built in 2 years,” he wrote.
As reported, the beneficiaries of Capital LLC are Derkach and the director general of the Oberig clinic (Kyiv), Viktor Rybchuk.
Capital LLC was registered in 2005. Its core business is specialized medical practice.
The Oberig Universal Clinic medical center, one of the largest private investment projects in the field of healthcare in Ukraine, began work in 2008.
At the end of 2017, Capital LLC, within the framework of business social partnership and following the results of the won competition, began the construction of the second phase of the Oberig clinic in the territory of Kyiv City Clinical Hospital No. 14 in Zoolohichna Street.
