In Ukraine, the State Agency for War Risk Insurance and mandatory insurance of critical objects were announced
The Financial Stability Board (FSB) considered the systemic risks of the financial sector of Ukraine. “The war remains a key challenge for the stability of the financial sector and the economy, intensifies the challenges, in particular for financing and the state budget,” the NBU report says.
The project provides for the introduction of mandatory insurance of certain objects and voluntary insurance of those that are not subject to mandatory insurance. Standardized products will be developed by the State Agency for Insurance of War Risks, created in the form of a joint-stock company under the control of the Cabinet of Ministers through the Ministry of Economy. State regulation and supervision of the agency’s activities will be carried out by the National Bank.
During the meeting, the Council supported the draft law on the creation of a fully functional war risk insurance system in Ukraine, the development of which is provided for in clause 62 of the Memorandum on Economic and Financial Policy between Ukraine and the International Monetary Fund.
According to the Memorandum, the National Bank together with the Ministry of Economy and the Ministry of Finance were to prepare the initial draft law. The working group created at the RFS completed its development in accordance with the conceptual note agreed on February 5, 2024. The draft law was approved by representatives of the working group and elaborated by specialists of the World Bank and will be submitted to the Verkhovna Rada of Ukraine after extensive discussion, in particular with representatives of the business community.
Previously, the First Deputy Head of the NBU, Kateryna Rozhkova, informed about the possibility of launching a fully functional war risk insurance system in Ukraine on the basis of the State Agency using the capacities of the Ukrainian market, as well as inviting international reinsurers to participate in it.
As reported by Forinsurer, the Export Credit Agency of Ukraine is already accepting applications for insurance of investments against military and political risks, which was provided for by the Law of Ukraine 3497-IX “On Amendments to the Law of Ukraine “On Financial Mechanisms for Stimulating Export Activities” regarding the insurance of investments in Ukraine from of military risks”, which entered into force on January 1, 2024.
“The start of insurance of military and political risks is an extremely important event for the market and no less important for the “Made in Ukraine” policy. The developed infrastructure of insurance against military risks can be an additional incentive for investors to enter the Ukrainian market, develop their factories Previously, insurance against war risks was available only from international organizations – MIGA insured foreign companies that are ready to invest in Ukraine, the American DFC and the Polish agency KUKE provided guarantees to foreign and Ukrainian companies to Ukraine and in Ukraine. Thanks to this, Ukrainian companies receive additional guarantees of financial security, and the economy – increased business activity. Insurance will contribute to the creation of facilities and infrastructure necessary for the development of the processing industry and the export of goods made in Ukraine,” said the First Vice. – Prime Minister of Ukraine – Minister of Economy Yulia Svyridenko.