12:17 19.11.2021

Rada's adoption of three financial laws to help build powerful financial sector in Ukraine – Rozhkova

3 min read
Rada's adoption of three financial laws to help build powerful financial sector in Ukraine – Rozhkova

The adoption by the Verkhovna Rada of Ukraine on November 18 of the law of Ukraine on insurance, and the draft laws on credit unions and on financial companies and financial services which are planned for consideration at the second reading, will help build a powerful competitive financial sector in Ukraine that supports the country's economy.

"It is to achieve this goal that the regulator and market participants should work together in the coming years. And in 2025, I hope we will see a completely different financial sector – stable and reliable, not only developing on its own, but also providing financial inclusion and supporting the economy," First Deputy Governor of the National Bank of Ukraine Kateryna Rozhkova said on Facebook.

According to her, back in 2015, at the height of the banking sector reform, there was a lot of talk that the nonbanking financial sector also needed changes. Then the "split" itself, the distribution of functions between the National Bank and the National Securities and Stock Market Commission, was just an idea, a dream. But they still understood that it is vital for insurers, credit unions, financial companies to fundamentally deep changes in regulation and supervision. Today, six years later, the first law was passed, she said.

Its key provisions include: new requirements for insurers to enter the market, transparent ownership structure, impeccable business reputation of owners and managers, satisfactory financial condition, compliance with legislation, including in the field of financial monitoring.

The requirements for the corporate governance system are changing, and simpler licensing rules are being introduced. Each institution will receive only one license. Not five, ten or even 20-30 like today. And only one. In this case, the volume of licenses can be changed.

New requirements are being introduced for the solvency of insurers. Solvency I and Solvency II.

"But I ask the companies not to be intimidated. They will be introduced gradually. Not today, and not tomorrow, but after a sufficient time," Rozhkova reassured.

In addition, insurers will be able to outsource a number of functions. For example, an actuarial function. In addition, there will be rules for the work of insurance intermediaries.

She expressed gratitude to the large team of the National Bank, market participants, MPs, international partners, who worked through these fundamental laws to the last comma and made the changes possible. She also thanked the MPs who supported these important changes enshrined in the law on insurance and expressed the hope that the two bills that were not adopted yesterday due to force majeure in the Verkhovna Rada will be voted on by the parliament.

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