On 15 March 2011 the Parliament of Ukraine introduced amendments to Article 2 of the Law of Ukraine “On Insurance” (the “Law”). The amendments are now awaiting the President’s signature and will become effective as of the date of their official promulgation.
The Law will allow domestic insurers to underwrite their risks with the non-resident re-insurers based in non-WTO countries, namely Russia. At the same time the Law clarifies that such re-insurance companies may not reside in the offshore jurisdictions which are on the special list adopted by the Ukrainian Government.
Removal of the ' WTO-only ' restriction has been prompted by the low capacity of the Ukrainian insurance market, significant increases in re-insurance rates and closer ties with Russian Federation, whose insurance/re-insurance market was historically cheaper than the European market .
The adopted amendments aim to increase the effectiveness of Ukrainian insurance companies and to offer them additional options for transferring their risks abroad. The Law is therefore expected to produce a significant increase in the number of re-insurance transactions with Russian underwriters.
Law: the Law of Ukraine “On the Introduction of Amendments to Article 2 of the Law of Ukraine “On Insurance”