From 17 May 2013 a foreign insurance company can render insurance services in Ukraine from a local branch. In essence new amendments to the Insurance Law grant foreign insurers full access to the Ukrainian insurance market1. These changes are some of the specific commitments undertaken by Ukraine under the WTO General Agreement on Trade in Services.
Before starting its operations, a branch must be registered and obtain an insurance license from the National Commission on the State Regulation in the Area of Financial Services Markets (the "Financial Services Commission").
The foreign insurer must meet certain conditions to open a branch in Ukraine, includingthe following:
(i) its country of registration must cooperate with the FATF;
(ii) its activity must be subject to oversight in its home country, and the Financial Services Commission and its national regulator must have signed a memorandum on exchange of data;
(iii) Ukraine and its country of registration must have signed a treaty on the avoidance of double taxation and the prevention of tax evasion;
(iv) its country of registration can not have "off-shore" status under the OECD standards;
(v) its financial solvency rating must meet the criteria of the Financial Services Commission;
(vi) it must have placed a guarantee deposit with a Ukrainian commercial bank of not less than (a) EUR 1 million for a foreign non-life insurer and (b) EUR 10 million for a foreign life insurance company; and
(vii) Ukrainian insurance companies are allowed to render services in its home country through branches.
Along with the Amendments a number of regulations on the operation of a branch adopted by the predecessor of the Financial Services Commission also became effective, including (a) the regulations on registration of a branch, (b) the regulations on licensing terms for the activity of a branch, and(c) the regulations on placement of the guarantee deposit.
These amendments grant foreign insurers full access to the Ukrainian insurance market if they meet the set criteria and their branches undergo registration and obtain insurance licenses. By introducing the Amendments Ukraine has complied with one of its WTO obligations.
1. Amendments to Law of Ukraine No. 85/96-ВР "On Insurance",dated 7 March 1996 (the "Insurance Law"), which became effective on 17 May 2013.
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