The National Bank of Ukraine has applied influence measures to ALC IC “Varto” and PrJSC “IC “Into” in the form of the obligation to take measures to eliminate violations and the causes that contributed to their commission.
“Measures of influence are applied due to failure to comply with the requirements of paragraphs 1 and 11 of the NBU’s board resolution “On peculiarities of registration procedures and licensing of participants of the non-banking financial services market during martial law …”, the regulator said in a statement on its website.
According to the document, it refers to written assurances of companies to the National Bank on the compliance of direct and ultimate owners of material participation to the requirements of the regulator on the financial / property status, the documents to assess such a position and subsequent responses to the NBU request.
It is clarified that the Committee on the Supervision and Regulation of Non-Banking Financial Services Markets adopted such decisions on May 29, 2023.
According to the NBU, the net earned premiums of IC “Varto” in the first quarter of 2023 amounted to 4,36 mln UAH, insurance payments – 2,57 mln UAH, net profit – near zero. Assets of the company at the beginning of April equaled UAH 39,03 mln, shareholders’ equity – UAH 34,16 mln.
The larger IC “Into” has net earned insurance premiums in the first quarter of 2023 were equal to UAH 17,67 mln, insurance payments – UAH 10,46 mln, net profit – UAH 0,28 mln. At the beginning of April assets of the company amounted to UAH 146,35 mln, shareholders’ equity – UAH 110,63 mln.
Insurers of Ukraine from December 13 will be able to make insurance payments under reinsurance contracts entered into with non-residents, the website of the National Bank of Ukraine informs.
In particular, this applies to payments on the basis of: contracts concluded before February 24, 2022 for documents issued before May 31, 2022, contracts concluded from February 24 to May 31, 2022, if their terms provide coverage for military risks.
At the same time there are clear requirements for the implementation of the relevant operations. Firstly, the non-resident reinsurer concluded a contract of reinsurance should have the financial strength rating, which is not lower than “A3” (Moody’s Investors Service), “A-” (Standard & Poor’s ), “A-” (Fitch Ratings), “A-” (A.M. Best) by the classification of international rating agencies.
Secondly, a Ukrainian insurance company, which carries out reinsurance, should meet a number of requirements, among which: no decision of the NBU on the recognition of the ownership structure of the insurer is not transparent; no decision of the NBU on recognizing the business reputation of the insurer, its owners, managers or key persons as insolvent; compliance with the solvency and capital adequacy ratio and the risk ratio of operations by the insurer.
The NBU notes that in order to obtain confirmation of compliance requirements for further transfer to the servicing bank, the insurer must apply to the NBU.
“Providing the ability to pay foreign currency payments under contracts with non-resident reinsurers will ensure that insurers comply with obligations to clients and international partners arising as of May 31, 2022. This is important to maintain the continuity of the insurance market of the country,” – noted in the message.
The NBU has also settled the issue of payment to non-residents of insurance payments under contracts of reinsurance of aviation risks in respect of aircraft, including those in the lease or leasing, clarified the rules for the implementation of transfers to non-resident reinsurers under international contracts of insurance “Green Card”.
The respective amendments were introduced by NBU regulation No.242 dated December 9, 2022 “On Amendments to the resolution of the Board of the National Bank of Ukraine No.18 dated February 24, 2022”, which shall become effective on December 13, 2022.
In July-September 2022 insurance companies – members of the Motor (Transport) Insurance Bureau of Ukraine (MTIBU) settled 51.1% of claims for property damage within 60 days from the date of the accident, up 43.1% compared to Q2 this year (35.7%) .
According to the report on the website of the IASBU, the percentage of claims settled within 90 days in the 3rd quarter of 2022 increased from 46% to 62.2%, up to 120 days increased from 60.2% to 67.4%, for 365 days decreased from 96.3% to 95.9% compared with the 2nd quarter of 2022.
IASBU reports that the greatest number of payments within 60 days performs insurance companies “Universalna” -79,6% (for the 2nd quarter. 61,7%), “Unique” – 77,6% (61.1%), IC “VUSO” -76,2% (57.3%), SG “TAS” -75,5% (62,3%), “ARCS” -75,4% (62,7%), “Knyazha VIG” – 74,3% (62,6%), “ROM Ukraine” -70% (64,1%), “USG” -69% (47,7%), Alfa Insurance -67.6% (56.8%), Arsenal Insurance -66.8%, Providna -66%, Brokbusiness -65.4%, INGO – 63% (45.5%), Oranta -62.1% (38.3%), Express Strakhovanie -60.8%.
The smallest proportion of claims on MTPL within 60 days in January-September 2022 at “Oranta-Sich” -%, “UTSSK” -0,6%, “Omega” -0,9% and “Etalon” -4%.
MLSBU also reported that for the third quarter of 2022 the bureau received 294 complaints against its members, which is 19,1% less than during the quarter before (363).
MTSBU is the only association of insurers, which performs compulsory insurance of civil liability of ground transport owners for damage, caused to third parties.
The leaders of the insurance market of Ukraine in terms of net insurance premiums collected in January-September 2022 were insurance companies ARX (UAH 2.228 billion), “Unica” (UAH 1.813 billion) and SG “TAS” (UAH 1.685 billion, all – Kyiv).
As reported in the main indicators of insurance companies in Ukraine for 8M2012, published on the NBU web site. 2022, the leaders in insurance payments in this period were Unica (980 mln UAH), ARX (775,7mn UAH) and SG TAS (675,6 mln UAH).
Data: NBU, mln UAH
In January-September 2022, insurance companies – members of the Motor (Transport) Insurance Bureau of Ukraine (MTIBU) concluded 5.228 million contracts of compulsory civil liability insurance of motor vehicles owners (CMTPL), which is 22.9% less than during the same period of 2021.
According to data released on the website of MTSBU, 3.184 million of the total number of contracts were concluded electronically – 3.86% less than for the same period last year.
During nine months of 2022 the Bureau members reduced the amount of insurance payments on CMTPL policy by 5,8% compared to the same period of 2021 – up to UAH 4,962 billion, including UAH 3,346 billion (+17%) on electronic contracts.
The total of accrued insurance reimbursements under domestic insurance contracts in January-September reduced by 22,77% – up to UAH 2,015 bn. Including UAH 414,562 mln. was paid out using the “Europrotocol (-14,54%).
The Bureau has also reduced the number of settled claims for insurance compensation by 34.2% – to 82.795 thsd. – up to 32,583 thousand (-28,23%).
MLIBU is the only union of insurers providing compulsory insurance of civil liability of ground transport owners for damages, caused to third parties. There are 42 insurance companies that are members of the bureau.
The expenses of Ukrainian insurance companies on advertising and marketing in January-June 2022 increased by 29.9% compared to the same period a year earlier (UAH 38.8 million), according to the website of the National Bank of Ukraine.
In addition, administrative expenses for the reporting period amounted to UAH 2.568 billion, which is 13.1% less than in 6 months-2021, distribution costs amounted to UAH 951.8 million (+8.2%).
The cost of concluding and prolonging insurance contracts amounted to UAH 5.041 billion (-8.7%). Including expenses on agency fees decreased by 10.3% – to UAH 4.682 billion.
The cost of concluding and prolonging reinsurance contracts decreased by 36.9%, to UAH 27.5 million, including fees for brokers, by 39.6%, to UAH 25.1 million, while non-resident brokers increased by 20. 7% – up to UAH 12.8 million.
According to the regulator, over this period, expenses for the settlement of insured events decreased by 20.8% – to UAH 156.5 million. At the same time, the cost of paying for the services of appraisers decreased by 27.7%, to UAH 44.1 million.
Assistance costs decreased by 22.7% and amounted to UAH 80.9 million. At the same time, payment for the services of a non-resident assistance increased by 2 times – up to UAH 4.1 million.
It is also reported that the cost of insurers to conduct court cases for 6 months. 2022 amounted to UAH 10 million against UAH 9.9 million for the same period a year earlier.
As reported, Ukrainian insurance companies in January-September 2022 collected net premiums in the amount of UAH 17.134 billion, which is 27% less than in the same period in 2021 (UAH 23.480 billion). At the same time, the volume of gross insurance premiums amounted to UAH 17.619 billion (-28.9%). Including premiums received from individuals amounted to UAH 3.360 billion, from reinsurers – UAH 2.228 billion.
In January-June, insurers paid UAH 5.835 billion of net insurance payments (31.8% less). The level of net payments decreased from 36.4% to 34.1%. Gross insurance payments decreased by 31.8% to UAH 5.939 billion. The level of gross payments decreased from 35.1% to 33.7%.
The total number of insurance companies in Ukraine as of June 30, 2022 was 142 (6 months-2021 – 181), of which 13 (19) are “life insurance companies”. At the same time, the NBU noted that for 6 months. 2022 reports were submitted by 13 insurance companies.
