The draft law ‘On the System of War Risk Insurance’ developed by the National Bank of Ukraine together with the Ministry of Economy and the Ministry of Finance introduces a nationwide system of war risk insurance for the population, business community, etc.

On 26 and 27 September, during consultations with the business community, representatives of the National Bank of Ukraine and the Ministry of Economy presented the draft Law of Ukraine ‘On the War Risk Insurance System’. It provides for the protection of the insurance interests of individuals and legal entities and is aimed at ensuring compensation for losses incurred by such persons as a result of military risks in Ukraine.

‘The lack of war risk coverage is a significant obstacle to attracting investors to rebuild Ukraine and develop our economy. We want to fix this by creating a unified war risk insurance system.

There are already a number of working instruments in this market. For example, the Unity mechanism for ship insurance, where the state allocated a small part of the capital to cover the first risk, allowing the market to be significantly revived and rates to be reduced several times. We have successful large projects with MIGA, are launching cooperation with DFC, and have the first war risk insurance contract for an investment loan from the Export Credit Agency. Our goal is to combine all existing programmes into a single pool, create clear rules of the game and eventually be able to attract international reinsurers to this market,’ said Oleksiy Sobolev, First Deputy Minister of Economy of Ukraine.

The comprehensive nationwide system of war risk insurance will be financed both by accumulated mandatory insurance payments under insurance contracts and by financial assistance from donors.

Separately, the draft law provides for the creation of the State Agency for War Risk Insurance by the Ministry of Economy, which will determine a common policy for assessing and accepting risks for insurers participating in the system. It will also develop standardised insurance products, define centralised approaches to pricing and maintain a single centralised database in the war risk insurance system.

The system will cover the risks of physical damage caused by the war, and it is envisaged that property pledged as collateral and residential construction projects will be subject to compulsory insurance. Consultations are currently underway to further refine the list of mandatory insurance objects. At a later stage, it is planned to expand coverage to a wider range of objects.

The draft law is scheduled to be submitted to the relevant committee of the Verkhovna Rada by the end of December this year, taking into account comments from the business community and representatives of the insurance market.

Source: https://me.gov.ua/News/Detail?lang=uk-UA&id=aabc6cca-645b-4cdd-9229-324780878348&title=StrakhuvanniaVonnikhRizikiv