Insurance services market
The current state of the financial services market in Ukraine is characterized by uncompetitiveness, isolation, and unpreparedness to participate in the global process of forming the world financial system on fundamentally new principles.An important step in the development of the insurance market was the adoption of the Law of Ukraine "On Amendments to the Law of Ukraine 'On Insurance'", which introduced provisions on increasing the capitalization, financial stability and solvency of insurers, abolished restrictions on the participation of a foreign founder in establishing an insurer resident in Ukraine, introduced a mechanism for calculating the regulatory solvency margin for insurers engaged in life insurance, expanded the list of categories of assets in which formed insurance reserves may be represented, etc.
The main goal of state policy for the development of the insurance market is to ensure social protection of the population, create an insurance services market that is attractive and accessible to policyholders, introduce in Ukraine forms and types of insurance proven by world practice, increase the influence on the processes of redistribution of gross domestic product, and transform insurance into an effective component.
The policy for developing the insurance market was accompanied by improvements in the regulatory and legal framework for this sector, an increase in the number of policyholders, the introduction of new types of insurance, and enhanced reliability of insurance companies’ operations.
Such socially significant types of insurance as pension, medical, and life insurance are poorly developed.
To create a more attractive insurance services market accessible to policyholders and to transform insurance into an effective component of social protection for the population, the Program for the Development of the Insurance Market of Ukraine for 2001–2004 is being implemented.
Credit unions
In the Ukrainian context, credit unions are primarily intended to become a source of accessible credit resources for meeting the consumer needs of broad segments of the population and supporting entrepreneurial initiatives through microcredit. In 2003, 38 credit unions were registered in the region. According to the credit unions, in the past year they issued loans totaling UAH 6,872.7 thousand.
The main problems of the development of the insurance market remain:
- the underdevelopment and imperfection of such socially significant types of insurance as life insurance, pension insurance and health insurance;
- significant mutual indebtedness, accumulation of payment arrears and unprofitability of enterprises;
- inadequate level of information about the state and capabilities of the insurance market, and of public trust in insurance;
- The negative impact of types of compulsory state social insurance on the development of voluntary insurance.
The main goals and objectives of the city's policy on the development of the insurance market for 2004:
- development of socially significant types of insurance;
- enhancing the financial soundness of insurers;
- restoration of trust in the insurance industry;
- development of investment activity of insurance companies;
- personnel and scientific support for insurance activity;
- protection of policyholders' interests.
Achieving the goals set for 2004 will become possible subject to the implementation of a set of measures.
In the direction of improving the system of state regulation, ensuring effective protection of property rights and interests of legal entities and citizens against various risks, maintaining the economic stability of society, and increasing the efficiency of state regulation of insurance activity:
- develop and strengthen compulsory types of insurance while simultaneously ensuring control mechanisms;
- create favorable conditions for investing insurance reserves in the city's economy;
- ensure the development of additional forms of insurance of the population against socially significant risks on a voluntary basis through their legislative regulation;
- promote the introduction of new effective and attractive forms of financial services for the population related to insurance;
- conduct explanatory work on the necessity and economic feasibility of insurance.