The National Bank of Ukraine (NBU) has developed a regulation on the transition of the Ukrainian insurance market to European standards to bring insurers’ activities in line with Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the establishment and conduct of insurance and reinsurance activities (Solvency II).
According to the NBU’s website, the regulation on establishing requirements for insurer solvency and investment activities has been developed and proposed for public discussion and consists of two main blocks.
The first block includes requirements for ensuring solvency, in particular, establishes the procedure for calculating regulatory capital and eligible regulatory capital, taking into account restrictions on the composition and structure of eligible assets for their calculation, as well as the procedure for calculating solvency capital. Thus, the minimum capital under the simplified approach for certain categories of insurers, in particular, life insurers and non-life insurers with significant volumes of activities, is set at the level of at least UAH 48 million, and for others – UAH 32 million.
Insurers will apply a simplified approach to calculating solvency capital based on insurance premiums, insurance claims, technical reserves, etc. until 2027.
The second block includes requirements for the insurer’s investment activities, including assets to cover technical reserves and restrictions on investment.
The NBU notes that the regulation will come into force on January 1, 2024, and will provide for a six-month period for insurers to bring their activities in line with the new requirements. After that date, the NBU will not apply any enforcement actions to insurers for violating solvency requirements if they implement their recovery and/or financing plans.
Comments and suggestions on the draft are accepted until December 18, 2023.
The EU Solvency II Directive primarily concerns the amount of capital that insurance companies must hold to reduce the risk of insolvency. The next steps to strengthen the solvency requirements for insurers in Ukraine, according to this directive, will be to determine the procedure for assessing certain categories of eligible assets and to introduce requirements for calculating solvency capital and minimum capital under the basic approach for certain categories of insurers from 2027.
Order No. 285 on the package adoption of CEN-CENELEC European normative documents in Ukraine was signed by Oleg Shvydky, head of the national standards body, the Economy Ministry press service said Thursday.
“The adoption and implementation of European standards in the Ukrainian economy will allow faster ratification of the ACAA Agreement, will open new opportunities and prospects for Ukrainian business,” the statement said.
As it was specified in the press-service, national standardization body of Ukraine with support of Ministry of economy carried out work with European experts of CEN-CENELEC on actualization of base of European standards and studying of legal bases, what provided an opportunity of package adoption of European standards in Ukraine as national.
The European Committee for Standardization (CEN) European Committee for Standardization in Electrotechnics (CENELEC) together form a European system of technical standardization. Standards agreed by these agencies are regularly adopted in many countries outside Europe that follow European technical standards.
