The National Bank has completed the development of a concept for creating a mechanism for insuring war risks, which has already been agreed upon with the Ministry of Economy and the Ministry of Finance. This was stated by First Deputy Head of the NBU Ekaterina Rozhkova at the conference “Finance for Business in Times of War” in Kiev, Interfax-Ukraine reports.
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“We have completed and agreed on the concept of creating a mechanism for insuring war risks. It was also a long work, which we, with the support of the World Bank, began back in 2022. As of today, the concept and this mechanism have already been agreed upon by our main specialized partners – the Ministry of Economy, the Ministry of Finance,” she said.
According to Rozhkova, this concept and mechanism presuppose mandatory insurance of military risks of a certain object.
According to Rozhkova, this concept and mechanism imply mandatory insurance of military risks of a certain object. p>
“The list of the most military risks at the first stage of launching the mechanism will be very limited,” noted the NBU representative.
“Because the very concept of “military-political risks” is very broad, it covers just a lot, in particular, the risks of changes in regulations. We are talking now, at the first stage, exclusively about direct material losses due to military operations: destruction, damage, power, property and the like,” explained the deputy head of the NBU.
Compulsory insurance will allow a very large number of objects to be involved in this process, which will significantly reduce the cost of such insurance, she believes.
“Voluntary insurance will also be possible for those who want,” Rozhkova added.
h3>Three levels of coverage
She noted that there will be three levels of coverage: domestic insurance companies, a state agency (insurance – ed.) and Western reinsurance companies.
Rozhkova added that the concept requires some detail, in particular, on the list of objects subject to compulsory insurance.
Special law
The NBU representative said that to launch this mechanism, a special law needs to be written.
“At the same time (it is necessary, – ed.) to start writing the law itself. The World Bank, the European Commission, other international partners, including international reinsurance brokers… were involved in the development of this mechanism and expressed their full readiness to provide us with all technical assistance in writing the law. Therefore, we will start writing this law already. In our plans, we want to complete this bill, in principle, by June,” she said.
Rozhkova expressed hope that the mechanism will work this year, calling it an “ambitious goal.”
“We are talking about creating a fully functional mechanism that can work now and will work for many years after the end of a full-scale war, since security risks will persist,” summed up the deputy head of the National Bank.
