20:09 29.05.2024

Requirements for approval of leadership of Ukrainian investigative agencies are now much stricter than in European countries – opinion

4 min read

Requirements for the approval of management and members of the supervisory board, the board of insurers and employees responsible for key areas in Ukraine are now much more complex and stringent than in European countries, Director General of the Insurance Business Association (IBA) Viacheslav Cherniakhovsky said.

"In Europe there are no tests or examinations by regulators, and in the absence of grounds for a more detailed consideration of candidates, their authorization occurs almost automatically after reviewing the standard questionnaire," he in the association's press release.

Thus, during the communication between the IBA and insurance associations of EU countries regarding the current procedures for appointing and approving the heads and key persons of insurance companies, representatives of the Swedish Insurance Association said that the insurance company has a one-level corporate governance system. Assessing the suitability of managers and those performing key functions is part of the supervisory authorization process. The insurance company must notify the regulator of the appointment of new members of the directorate/board, a new manager and new persons responsible for key functions. The regulator can respond if there are doubts about a person's suitability to perform their functions.

In Bulgaria, according to Nina Koltchakova, general secretary of the Association of Bulgarian Insurers, there are no requirements for testing or interviews by the regulator (Financial Supervisory Commission, FSC) to approve candidates for positions as members of the management or control body of insurance companies.

"The Financial Supervision Commission and the deputy chairman in charge of the insurance supervision department should monitor the management system taking into account the nature, volume and complexity of the business carried on by the insurer or reinsurer respectively," she said.

President of the Latvian Association of Insurers Janis Abasins said that in Latvia there is no practice of either examinations or testing in the process of appointing managers or key persons of the insurer. An insurer wishing the regulator to approve a person must provide it with a detailed application form and a summary of the candidacy.

"In practice, in many cases, the insurer communicates with the regulator before sending a formal application, so the company knows in advance that a particular person is likely to be approved by the regulator," Abasins said.

Former member of the board of the Latvian Capital and Financial Market Commission Guido Romeiko said only in exceptional cases, for example, when a candidate for a management position does not have experience in insurance, he came from another financial market or there was a significant break in work, the regulator may invite a person for an interview. Before such communication, the regulator's employees communicate the issues discussed in advance.

In Slovenia, an insurance company can choose a one-tier or two-tier management system. Representatives of the national insurance association note that the assessment procedure and approval by the regulator of members of corporate governance bodies, as in other European countries, is based on the requirements of the EU Solvency II Directive and is described in detail in the national law On insurance. A person applying for a managerial or key position must be professionally competent and have the experience necessary to manage an insurance business, have no criminal record, not be the subject of a personal bankruptcy process, have a good reputation, all criteria for which are defined.

"If we introduce European practices based on the provisions of the Solvency II Directive, then our national requirements should not exceed them. In addition, in many European countries, insurers either use a single-tier corporate governance system or can choose, depending on the scale of business, between single- and two-tier. In Ukraine, we do not have such an opportunity, despite the lack of real need for many companies to have a complex two-tier system," Cherniakhovsky said.