In Ukraine, there are new requirements regarding the solvency of insurers and the formation of reserves
The National Bank of Ukraine has established requirements for the solvency of insurers, the formation of technical reserves, the accounting of insurance contracts and the protection of information. The specified requirements correspond to the norms of the Law of Ukraine “On Insurance”, which are based on the principles of Directive 2009/138/EU (Solvency II) and IFRS 17 “Insurance Contracts”.
The Regulation on Establishing Requirements for Ensuring the Solvency and Investment Activity of the Insurer (approved by NBU Board Resolution No. 201 dated December 29) defines the procedure for calculating regulatory capital and its components that are acceptable for meeting the requirements for solvency capital and minimum capital, as well as requirements for eligible assets the insurer, in particular to cover technical reserves.
The regulation on the procedure for the formation of technical reserves by insurers (approved by the resolution of the NBU Board of December 29, No. 203) establishes requirements for the quality of data used by the insurer to calculate technical reserves, rules for aggregating contracts, the list and methods of forming technical reserves, verification by the insurer of the adequacy of the formed technical reserves and adequacy of loss reserves.
The Regulation on the procedure for accounting by the insurer of contracts related to the performance of insurance activities and requirements for the protection of information of the insurer (approved by the resolution of the NBU Board of December 29, No. 204) defines the uniform requirements for keeping records of insurance contracts (reinsurance) and other insurance operations in electronically in information systems, as well as approaches to protecting information in such systems.
In particular, the requirements for accounting for technical reserves under concluded contracts and maintaining a register of assets to cover technical reserves have been established.
New requirements for solvency, contract accounting and information protection of insurers will come into effect on January 1, 2024. At the same time, a transition period is provided for insurers to bring their activities into compliance with these requirements until June 30, 2024.
Until January 1, 2027, insurers will calculate solvency capital according to the simplified approach, taking into account the indicators of insurance premiums, insurance payments, technical reserves, etc., and certain categories (life insurers and non-life insurers with significant volumes of activity) – the minimum capital according to the simplified approach .