Modern Approaches to Prudential Regulation in the Insurance Market of Ukraine
Vilenchuk O. M., Dema D. I., Kurovska N. O.

Vilenchuk, Oleksandr M., Dema, Dmytro I., and Kurovska, Nataliia O. (2022) “Modern Approaches to Prudential Regulation in the Insurance Market of Ukraine.” The Problems of Economy 2:132–139.
https://doi.org/10.32983/2222-0712-2022-2-132-139

Section: Finance and banking

UDC 368.02(477)

Abstract:
The article reflects modern approaches to the organization and implementation of prudential regulation in the sphere of insurance. From a scientific point, the expediency of taking the State regulatory measures to increase the business activity of participants in the insurance process and enhance the financial capacity of companies to fulfill their contractual obligations is specified. The article is aimed at a theoretical-methodological substantiation of prudential regulation processes in the insurance market of Ukraine. In the course of the research, a rather positive dynamics of the development of key indexers of the insurance services market for 2016-2020 is identified. This applies, first of all, to the indicators of total assets and the condition of formed insurance reserves, the identified tendency was observed against the background of a significant reduction in insurance companies in the market. Simultaneously, it is found that as of the beginning of 2021, three-quarters of insurance companies comply with solvency requirements and financial standards. It is emphasized that the current conditions of risk-causing market environment require the implementation of balanced regulatory and supervisory activities in the insurance market in accordance with the Pan-European requirements of «Solvency I» and «Solvency II». A critical analysis of key articles of the Law of Ukraine «On Insurance» (2021) on ensuring solvency and investment activity testifies to their innovative nature and direction of integration of the national market into the European insurance space. The authors’ own vision of prudential regulation is formulated, which consists in systematic coordination of actions of both the State-based and non-state institutions in the insurance market to effectively neutralize the possible risks associated with the livelihoods of society. A conceptual vision of further development of prudential regulation in Ukraine is defined, which is based on three following components: increasing transparency in the activities of insurance companies, increasing requirements for the solvency of insurers as a guarantee of their fulfillment of contractual obligations, improving the corporate governance system as a basis for ensuring the competitiveness of the insurer in the market. Prospects for further research are the digitalization of regulatory processes in the insurance market of Ukraine.

Keywords: solvency, prudential regulation, risks, insurance market, participants in the insurance process.

Fig.: 2. Tabl.: 2. Bibl.: 13.

Vilenchuk Oleksandr M. – Doctor of Sciences (Economics), Associate Professor, Associate Professor, Department of Finance and Credit, Polissia National University (7 Staryi Blvd, Zhytomyr, 10008, Ukraine)
Email: vilenchuk@ukr.net
Dema Dmytro I. – Candidate of Sciences (Economics), Professor, Professor, Department of Finance and Credit, Polissia National University (7 Staryi Blvd, Zhytomyr, 10008, Ukraine)
Email: dmitrodema@gmail.com
Kurovska Nataliia O. – Candidate of Sciences (Economics), Associate Professor, Associate Professor, Department of Finance and Credit, Polissia National University (7 Staryi Blvd, Zhytomyr, 10008, Ukraine)
Email: kurovska@gmail.com

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