Financial service market watchdog divides 83 active insurance companies into three risk groups
Kyiv, June 25 (Interfax-Ukraine) – The National Commission for Financial Service Markets Regulation of Ukraine has divided the 83 actively operating companies on the insurance market into three risk groups: high risk – 17 companies with a shortage of funds for fulfilling their liabilities, medium risk – 16 financially stable companies against which claims of clients arrive and low risk – 50 stably operating insurers, Acting Head of the commission Maksym Poliakov said at a press conference at Interfax-Ukraine on Tuesday.
He said that the regulator picked out 18 insurers that were involved in doubtful transactions via reinsurance after the results of their operation in 2013 and in the first quarter of 2014.
He also said that the licenses of insurance companies Raip, Siayvo, Progress Fund, Silum, Eurostandard and Vpevnenist-Bezpeka have been suspended. He said that the first three companies had challenged the decision of the regulator in court.
Poliakov said that the commission had informed SBU and Prosecutor General's Office about evidence of scheme operations of the companies it had uncovered. In addition, the commission plans to initiate the legalization of responsibility of shareholders in insurance companies for deliberate withdrawal of capital and destruction of insurance companies.
The commission plans to pay special attention to "family" (or the associates of former President Viktor Yanukovych) insurance companies of Serhiy Kurchenko, Vitaliy Zakharchenko and Serhiy Arbuzov. At present, checks are being conducted and in the near term the licenses of some of them will be suspended, Poliakov said.
He also said that now Dominanta and Ukrainian Insurance House are being checked. The companies of the Kremen and Status groups will be also checked.
Poliakov said that within one month (by July 15) temporary administrations would be introduced at three large insurance companies operating on the OSAGO (mandatory insurance of the civil liability of motor vehicles owners) market, from which shareholders started removing capital, according to the information of the regulator. The shareholders do not plan to develop them.
"We'll apply a tougher approach to the operation of such companies. In six months we'll be able to chance the non-market trends that existed on the insurance market," he said.
He also said that the commission forecasts that by the end of the year 7-10% of insurance companies involved in schemes will leave the market.
He said that today the insurance market is capitalized by real funds only by 20%, and 50% are bills of exchange and shares.
With the purpose of the permanent monitoring the financial state of insurance companies the commission has introduced practice of interim inquiry of information on the operation of insurers between official reporting periods.
He also said that the commission pays special attention to claims of clients for OSAGO, voluntary medical insurance and life insurance as these are social types of insurance.
In 2014, the regulator conducted 28 scheduled and 48 off-schedule checks. Licenses were suspended at 14 companies, 24 licenses were canceled, five companies were removed from the state register of financial organizations, Poliakov said.