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LAW OF UKRAINE

of November 18, 2021 No. 1909-IX

About insurance

This Law governs the relations in the sphere of insurance, determines the general legal basis of implementation of activities for insurance, provisions of intermediary services and is directed to strengthening of protection of the rights and legitimate interests of clients, including consumers, by establishment of requirements to management system, solvency of insurers, branches of nonresident insurers in the territory of Ukraine and disclosure of information by them, establishes requirements to procedure for the conclusion, servicing and agreement performance of insurance and reinsurance, regulates questions of information support of the insurance contracts and reinsurance and actions preceding their conclusion and also state regulation and supervision in insurance field.

Section I. General provisions

Article 1. Determination of terms

1. In this Law terms are used in such value:

1) actuarial activities in the sphere of insurance (reinsurance) - activities in the sphere of insurance for the analysis and risks assessment and/or the related financial liabilities, and also development and assessment of methods of management of financial consequences of future accidental events for the purpose of ensuring realization of actuarial function of the insurer;

2) underwriting risk - risk of emergence of losses or additional losses or short-reception of the planned income or emergence of adverse change in value of insurance bonds owing to the inadequate assumptions performed during pricing and reservation;

3) annuity - the regular consecutive insurance payments determined in the insurance contract;

4) the beneficiary - person who has the right to insurance payment in accordance with the terms of the insurance contract and/or according to the legislation;

5) the redemption amount - the cash amount paid by the insurer to the insurer (the other person determined by the insurance contract or the legislation) in case of early termination of validity of the insurance referred to life insurance classes;

6) remuneration for realization of insurance and/or reinsurance products (further - remuneration for realization) - any commission, service payment, commission fee, or other payment, including any economic benefit or any other pecuniary or non-financial benefits or encouragement offered or provided for realization of insurance and/or reinsurance products;

7) outward reinsurance - legal relationship on transfer by the reinsurer (the assignor, the retroassignor) to the overcautious person (tsesssioner, retrotsessioner) to reinsurance fully or partially risk;

8) the responsible actuary - person responsible for accomplishment of actuarial function;

9) the intra group agreement - any agreement under which the insurer directly or indirectly acquires the rights and obligations concerning other legal entity who is member of this group, insurance holding company or holding company with the mixed activities, or concerning person who is connected with the legal entity belonging to this group, insurance holding company or holding company with the mixed activities on accomplishment of contractual or not contractual commitments, with payment or without payment;

10) inward reinsurance - legal relationship with acceptance by the overcautious person (tsessioner, retrotsessioner) fully or partially the risk transferred to reinsurance by the reinsurer (the assignor, the retroassignor);

11) the main internal auditor - person responsible for accomplishment of internal audit function, - the division manager of internal audit or person to who function of implementation of internal audit is assigned;

12) the chief komplayens-manager - person responsible for function accomplishment komplayens, - the division manager on control of observance of regulations (komplayens) or person to who function of implementation of such control is assigned;

13) the chief risk manager - person responsible for function accomplishment risk management, - the division manager on risk management or person to who risk management implementation function is assigned;

14) additional insurance agent - physical person entrepreneur or the legal entity who is included in the Register of intermediaries and performs activities from name and for the benefit of the insurer for remuneration for realization of insurance products based on the contract with the insurer if all following conditions are at the same time satisfied:

a) core activity of such person is implementation of other economic activity, than realization of insurance products;

b) such person realizes insurance products as amendment to the goods (service) realized (rendered) it within implementation of main type its economic activity;

c) the insurance products realized by such person do not provide insurance on classes of insurance 10 - 13, 19 - 23, except cases if such insurance products are amendment to the goods or services realized by it person within implementation of main type of its economic activity;

15) insured person - the physical person determined by the insurer in the life insurance contract, health, working capacity and/or provision of pensions of which are object of insurance according to the insurance contract;

16) the significant insurer - the insurer who corresponds to the criteria of the importance established by regulatory legal acts of the Regulator;

17) the considerable transaction of the insurer - the transaction (except the transaction on placement of own shares by joint-stock company) made by the insurer if market value of the property (works, services) which is its subject makes 10 and more percent of asset cost of the insurer according to the last annual financial reporting;

18) foreign branch - the branch of the insurer (overcautious person) of resident located in the territory of foreign state;

19) instruments of decrease in risk of insurance - methods which give opportunity to insurers (overcautious persons) to transfer part or all the risks of insurance to other party;

20) heads on realization of insurance and/or reinsurance products (further - heads on realization) - members of executive body of the insurer within whose scope of responsibility realization of insurance and/or reinsurance products falls and/or heads of the relevant structural or separate divisions of the insurer, insurance agent, insurance broker, the subagent, the reinsurance broker, person responsible for sales activity of insurance products of additional insurance agent who have necessary knowledge and skills and carry out labor obligations on management of realization of insurance and/or reinsurance products;

21) the client - person who addressed for obtaining or uses insurance or reinsurance service;

22) key functions - the functions providing implementation of activities for risk management, observance of regulations (komplayens), actuarial function and internal audit function;

23) collective suitability - availability at members of the supervisory board or executive body of the insurer of joint/cumulative knowledge, skills, working and managerial experience in the amount necessary (sufficient) for understanding of all aspects of activities of the insurer, adequate risks assessment to which the insurer can be exposed, adoptions of the weighed decisions, and also for ensuring effective management and control of activities of the insurer in general taking into account the functions assigned to this body by the law, the charter of the insurer and his internal documents;

24) credit risk - risk of emergence of losses or additional losses or short-reception of the planned income or emergence of adverse changes in financial condition as a result of failure to carry out by the debtor/partner of the undertaken obligations in accordance with the terms of the agreement;

25) the independent member of the supervisory board (further - the independent director) - the physical person elected the member of the supervisory board of the insurer who conforms to the requirements established to independent directors by this Law and on who there is no influence from other persons in decision making process during fulfillment of duties of the independent director;

26) objects of supervision - insurers, overcautious persons, suppliers of the accompanying services in the market of insurance, consolidation of participants of the market of insurance which are self-regulatory organizations, owners of essential participation in insurers, members of financial groups (insurance groups, insurance subgroups), insurance groups insurance subgroups, heads of insurers and person to whom accomplishment of key functions, supervision of which is exercised by the Regulator, is assigned;

27) operational risk - risk of emergence of losses or additional losses or short-reception of the planned income owing to assumption of shortcomings or mistakes in the organization of internal processes, intentional or unintentional actions of workers or other persons, failures in work of information systems or owing to influence of external factors;

28) transfer of the insurance portfolio - transition of all rights and obligations on insurance portfolios from one insurer to other insurer who is recognized the legal successor on such insurance portfolios (insurer legal successor);

29) reinsurance payment - the money paid by the insurer (overcautious person) in accordance with the terms of the agreements of reinsurance directly or indirectly connected with approach of obligation of the insurer under the agreement (agreements) of insurance concerning implementation of insurance payment;

30) reinsurance service - the service provided by the overcautious person for ensuring need of the potential overcautious person for reinsurance based on the agreement of reinsurance (cover-notes, the certificate, the policy, the certificate and so forth);

31) reinsurance award (reinsurance payment, reinsurance fee) - payment which the reinsurer (the assignor, the retroassignor) shall pay to advantage of the overcautious person (tsesssioner, retrotsessioner) in accordance with the terms of the agreement of reinsurance;

32) the reinsurance broker - the legal entity or representation of the reinsurance broker - the nonresident, included in the Register of the intermediaries acting on its own behalf both for the benefit of the client and for remuneration for realization perform activities for provision of intermediary services in reinsurance based on the agreement;

33) reinsurance product - the reinsurance conditions satisfying certain needs and interests of clients for receipt of reinsurance service;

34) the reinsurer (tsessioner, retrotsessioner) - the insurer and the nonresident insurer who accepts risk under the agreement of reinsurance;

35) the reinsurer (the assignor, the retroassignor) - the insurer (overcautious person) transferring risk under the agreement of reinsurance;

36) reinsurance (cession, retrocession) - legal relationship on transfer by the reinsurer (the assignor, the retroassignor) and the overcautious person (tsessioner, retrotsessioner) for a fee risk concerning accomplishment by the reinsurer (the assignor, the retroassignor) of part of the obligations before the insurer and cost recoveries (implementation of payments) on the conditions determined by the agreement of reinsurance;

37) workers on realization of insurance and/or reinsurance products (further - workers on realization) - physical persons with which according to the legislation employment relationships by the insurer, insurance agent, insurance broker, the subagent, the reinsurance broker which carry out labor obligations on realization of insurance and/or reinsurance products are drawn up;

38) the assigned capital of branch of the nonresident insurer - money in national currency of Ukraine which the nonresident insurer places on the deposit account in bank which has the current license granted by the National Bank of Ukraine and for date of placement of such deposit is not referred to category insolvent, for ensuring protection against risk of default on obligations of the insurance contracts (reinsurance) concluded in time of activities of branch of the nonresident insurer in the territory of Ukraine;

39) direct insurance - legal relationship on transfer of risk from the insurer to the insurer for a fee on the conditions determined by the insurance contract or the legislation for the purpose of protection of insurance interest of physical persons and legal entities;

40) Regulator - National Bank of Ukraine;

41) the Register of insurers (further - the Register) - the register which is kept by the Regulator in the procedure determined by it and contains the information about insurers, their separate divisions;

42) the Register of insurance intermediaries (further - the Register of intermediaries) - the electronic automated system of collection, accumulating and data processing about insurance intermediaries;

43) retroactive date - date which precedes effective date of the insurance contract and joins insurance coverage in time;

44) concentration risk - the risks connected with concentration of assets and liabilities which can lead to emergence of losses or additional losses or short-reception of the planned income;

45) liquidity risk - risk of emergence of losses or additional losses or short-reception of the planned income owing to inability to provide accomplishment of the obligations in proper terms;

46) market risk - the risk of emergence of losses or additional losses or short-reception of the planned income or emergence of adverse changes in financial condition directly or indirectly caused by change in value of assets and liabilities;

47) the consumer - the physical person who addressed for obtaining or receives insurance service for satisfaction of the personal needs which are not connected with business or independent professional activity and also the other persons determined by the insurance contract as the insured persons and/or beneficiaries who are physical persons or other physical persons which have the right to insurance payment;

48) standard insurance product - insurance product with usual (standard) conditions which are invariable and identical to uncertain circle of clients;

49) insurance value - the cost of insurance interest determined by the insurance contract or the legislation;

50) insurance payment (insurance indemnity) - the money paid by the insurer in case of loss occurrence in accordance with the terms of the insurance contract and/or the legislation;

51) insurance group - non-bank financial group in which insurers perform preferential activities, consisting from:

the insurer who is controller of one or several residents and/or foreign affiliated insurers, the affiliated and/or associated legal entities who are financial institutions, or

two or more resident insurers, other financial institutions having the general controller, their Ukrainian and/or the foreign affiliated and/or associated legal entities, being financial institutions.

Preferential activities in group are performed by insurers if arithmetic-mean value of assets of insurers for the last four reporting quarters makes 50 and more percent of the cumulative extent of arithmetic-mean values of assets of all financial institutions which are part of this group for this period.

The insurance holding company, and also the legal entity for which provision of financial services is the prevailing type of activity and the legal entity on provision of support services which have the general controller with members of insurance group, are part of insurance group.

The legal entity is considered such for which provision of financial services is the prevailing type of activity if the share of the income from realization of financial services in results of the previous accounting year constitutes 50 and more percent of total amount of net income (revenue) from sales of products (goods, works, services);

52) insurance service - type of the financial service provided by the insurer for ensuring requirement of the potential insurer for insurance protection based on the insurance contract;

53) insurance premium (insurance payment, insurance premium) - payment in cash for insurance which the insurer shall pay to the insurer according to the insurance contract;

54) insurance sum - sum of money within which the insurer according to terms of the contract of insurance and/or the legislation shall make insurance payment in case of loss occurrence;

55) insurance holding company - mother company which is finance holding company which main activities consist in acquisition and ownership of participation in subsidiary companies provided that these subsidiary companies mainly are insurers and, at least, one of such subsidiary companies is the insurer;

56) insurance coverage - set of urgent, territorial and cost components of the insurance protection provided according to the agreement or the law;

57) insurance agent - the physical person, physical person entrepreneur or the legal entity who is included in the Register of intermediaries is not additional insurance agent and performs sales activity of insurance products from name and for the benefit of the insurer for remuneration for realization of insurance products based on the contract with the insurer;

58) insurance broker - physical person entrepreneur, the legal entity or permanent mission of insurance broker - the nonresident, included in the Register of the intermediaries acting on its own behalf both for the benefit of the client and for remuneration for realization perform activities for provision of intermediary services in insurance based on the agreement;

59) insured event - the event provided by the insurance contract or the legislation which risk of origin is insured with which approach there is obligation of the insurer to make insurance payment to the insurer or other person determined in the insurance contract or according to the legislation;

60) insurance interest - material interest and/or need of the potential insurer (other person determined in the insurance contract) in risks insurance, connected with life, health, working capacity and provision of pensions, with ownership, use and the order of property, with compensation by the insurer of the harm to person or its property done to them, and also the harm done to the legal entity;

61) insurance portfolio - set of the rights and obligations of the insurer according to the insurance contracts (existing and stopped) with one or several classes (risks) of insurance and/or under all agreements of reinsurance (existing and stopped) on which such insurer acts as the overcautious person and/or within separate class (risk) of insurance;

62) the insurance intermediary - insurance broker, insurance agent, the subagent, the reinsurance broker, additional insurance agent;

63) insurance product - insurance conditions which are met by certain needs and interests of clients for receipt of insurance service;

64) insurance risk - event on which case insurance which has signs of probability and accident of approach is led;

65) insurance rate - rate of insurance premium from unit of insurance sum for certain term of insurance coverage;

66) the insurer - financial institution or branch of the nonresident insurer which have the right to perform activities for insurance in the territory of Ukraine;

67) the nonresident insurer - the legal entity registered according to the legislation of foreign state which has the right to perform activities for insurance in the territory of Ukraine;

68) the insurer - person who signed the insurance contract with the insurer or is insurer according to the legislation;

69) insurance - the relations on protection of insurance interests of the physical persons and legal entities (insurance protection) in case of risks insurance connected with life, health, working capacity and provision of pensions with ownership, use and the order of property, with compensation by the insurer of the harm to person or its property done to them, and also the harm done to the legal entity in case of approach of the insured events determined by the insurance contract at the expense of means of funds which are created by payment of insurance premiums by insurers (payments, fees), the income from investment of funds of such funds and other income of the insurer gained according to the legislation;

70) insurance coverage term - the period during which the insurance coverage is effective and during which in case of loss occurrence the insurer shall perform insurance payment (compensation) in accordance with the terms of the agreement or the legislation;

71) the subagent - the physical person, physical person entrepreneur, the legal entity included in the Register of intermediaries also performs sales activity of insurance products from name, for the benefit of the insurer and at the request of the agent for remuneration for realization based on the contract with insurance agent;

72) subordinated debt (loan) - loan for which financial resources are attracted under the agreement which conditions provide that in case of bankruptcy or liquidation of the borrower return of money on such loan is performed only after obligation fulfillment of the borrower before other creditors and which conforms to the requirements established by regulatory legal acts of the Regulator;

73) the mystery of insurance - set of customer information and its financial condition which became known to the insurer (overcautious person) or the insurance intermediary in connection with the conclusion and/or agreement performance of insurance (reinsurance) and which disclosure can do material or moral harm to such client. The mystery of insurance belongs to the mystery of financial service;

74) bonus - the commission from the got profit of the overcautious person which the overcautious person annually pays to the reinsurer by results of execution of agreements of reinsurance, or the commission from the got profit of the insurer which the insurer annually pays to the insurer by results of execution of insurance contracts;

75) participants of the market of insurance are insurers, overcautious persons and suppliers of the accompanying services in the market of insurance, their consolidation, clients;

76) branch of the nonresident insurer - representation in the form of branch of the nonresident insurer which has the right to implementation of activities for insurance upon name of the nonresident insurer according to requirements of this Law;

77) the franchize - part of losses which is not compensated by the insurer according to the insurance contract and/or the legislation.

2. Other terms are used in this Law in such values:

the term "goods" - in the value given in the Law of Ukraine "About foreign economic activity";

the terms "national currency of Ukraine", "foreign currency", "currency control" - in the values given in the Law of Ukraine "About currency and currency transactions";

the terms "associated person", "bank", "deposit" - in the values given in the Law of Ukraine "About banks and banking activity";

the terms "global certificate", "depository institution", "Central Securities Depository" - in the values given in the Law of Ukraine "About depositary system of Ukraine";

the terms "financial accounting", "consolidated financial statements", "accounting policy", "financial reporting", "international accounting standards", "equity" - in the values given in the Law of Ukraine "About financial accounting and the financial reporting in Ukraine";

the term "joint-stock company" - in the value given in the Law of Ukraine "About joint-stock companies";

the term "additional liability company" - in the value given in the Law of Ukraine "About societies with the limited and accessorial liability";

the term "information security" - in the value given in the Law of Ukraine "About information";

the terms "subject of auditor activities", "statutory audit of the financial reporting", "auditor services", "working documents of the auditor", "audit report", "international standards of audit", "auditing committee" - in the values given in the Law of Ukraine "About financial records audit and auditor activities";

the term "concentration" (except the use in value of concentration risk according to this Law) - in the value given in the Law of Ukraine "About protection of the economic competition";

the terms "information and telecommunication system", "the information (automated) system" - in the values given in the Law of Ukraine "About information security in information and telecommunication systems";

the terms "authorization", "outsourcing", "affiliate", "goodwill", "support services", "subsidiary company", "measures of early intervention", "considerable influence on management or activities", "essential participation", "the key participant", "control (decisive influence)", "komplayens", "controller", "conflict of interest", "corporate management", "mother company", "the connected person", "professional suitability", "professional judgment", "risk profile", "prudential requirements", "risk - the oriented approach", "internal control system", "close person", "the accompanying services", "structure of property", "financial group", "financial service", "financial institution" - in the values given in the Law of Ukraine "About financial services and finance companies";

the term "faultless goodwill" - in the value given in the Law of Ukraine "About prevention and counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction".

Article 2. Scope of the Law

1. This Law regulates the general principles of functioning of the market of insurance and activities of his participants, features of state regulation and supervision of activities in the insurance market, and also protection of the rights and legitimate interests of clients.

2. Operation of this Law does not extend on:

1) activities in the market of insurance in Ukraine the international, intergovernmental and/or interstate organizations;

2) obligatory national social insurance;

3) activities of physical persons, physical persons entrepreneurs and legal entities for realization of insurance products in case of simultaneous accomplishment of the following conditions:

a) insurance is additional to goods (services) realized (presented) it person if such insurance covers:

risk of damage, breakdown, destruction, loss of goods or impossibility to receive service; or

the risk of damage, destruction and/or loss of baggage (cargo baggage) or other risks connected with travel which is organized by such person;

b) the general size of the insurance premium paid on insurance products which is implemented by such person does not exceed 1 percent of the size of the subsistence minimum for able-bodied persons operating on the date of the conclusion of the insurance contract in one day of term of insurance coverage on such insurance products;

c) as the exception of provisions of the subitem "b" of this Item if insurance is additional to services which are provided by such person, and duration of provision of such service does not exceed three months, the general size of the insurance premium paid according to the insurance contract does not exceed 150 percent of the size of the subsistence minimum for able-bodied persons operating on the date of the conclusion of the insurance contract.

In case of implementation of sales activity of insurance products by persons to whom operation of this Law does not extend because they conform to requirements of Item 3 of this part the insurer provides that to the conclusion of the insurance contract:

the client obtained information necessary for identification of such insurer and person according to article 87 of this Law, and also information on the procedure of submission of claims and pre-judicial dispute settlement;

interests of the client were observed by fulfillment of requirements of articles 67 and 86 of this Law;

the client received the information document on insurance product according to this Law.

3. Insurers are forbidden to perform activities for insurance class 21, if it is directly not provided by the special law of regulation of insurance on this class.

Insurers are forbidden to perform activities for insurance class 22, if it is directly not provided by the special law of regulation of insurance on this class.

4. Activities of societies of mutual insurance are forbidden if such activities are not settled by the special law regulation of activities of societies of mutual insurance.

Section II. Activities in the insurance market

Article 3. Activities in the insurance market

1. Activities in the market of insurance include activities for insurance and activities for rendering the accompanying services in the insurance market.

2. Activities for provision of the accompanying services in the market of insurance include activities for rendering intermediary and support services.

3. Activities for insurance in the territory of Ukraine have the right to perform only:

1) the resident insurers who obtained the license according to this Law;

2) the branches of nonresident insurers which obtained the license according to this Law;

3) nonresident insurers taking into account provisions of article 6 of this Law.

4. Action of the provisions of this Law regulating activities of insurers (direct insurance) extends also to branches of nonresident insurers and overcautious persons (reinsurance), except the cases which are directly provided by this Law.

5. Activities for insurance include:

1) direct insurance on the insurance classes determined by article 4 of this Law;

2) reinsurance on the insurance classes determined by article 4 of this Law;

3) the activities connected with asset management of the insurer;

4) sales activity of insurance products of the insurer according to this Law;

5) other activities connected with implementation of direct insurance and/or reinsurance, determined by regulatory legal acts of the Regulator.

6. Exclusive type of activity of the insurer are activities for insurance, including activities for provision of guarantees according to part four of article 11 of this Law, activities for provision of the accompanying services in the insurance market.

The insurer can also perform economic activity for ensuring own requirements taking into account the restrictions set by this Law.

7. Activities for rendering intermediary services in the market of insurance have the right to perform insurers and insurance intermediaries according to the procedure, provided by this Law.

8. Activities for rendering intermediary services in the market of insurance include:

1) sales activity of insurance products;

2) sales activity of reinsurance products;

3) activities for provision of other intermediary services which list is determined by regulatory legal acts of the Regulator.

9. The regulator has the right to establish requirements to activities for rendering separate support services in the insurance market, in particular, to actuarial activities, activities for damage assessment, assistance (the assisting services), and the requirement to suppliers of support services.

10. The regulator has the right to create regulatory platform for testing of innovative services, technologies and/or tools in the market of insurance with use of innovative technologies in cases and procedure, stipulated by the legislation.

Article 4. Insurance classes

1. To classes of insurance of other, than life insurance, belong:

1) class 1 - accident insurance (including on case of industrial injury and occupational disease);

2) class 2 - sickness insurance (including medical insurance);

3) class 3 - insurance of land vehicles (except railway rolling stock);

4) class 4 - insurance of railway rolling stock;

5) class 5 - air craft insurance;

6) class 6 - insurance of water vessels (ocean ships, inland navigation vessels and other self-propelled or not self-propelled floating constructions);

7) class 7 - insurance of the transported property (including freight, baggage (cargo baggage);

8) class 8 - proprietary insurance from fire and dangerous impact of the natural phenomena;

9) class 9 - proprietary insurance from the damage caused by hail, frost, other events (including theft, robbery, robbery, intentional damage / destruction of property), except the events determined in class 8;

10) class 10 - liability insurance which arises owing to use of the land vehicle (including responsibility of carrier);

11) class 11 - liability insurance which arises owing to use of the aircraft (including responsibility of carrier);

12) class 12 - liability insurance which arises owing to use of water vessel (including responsibility of carrier);

13) class 13 - other liability insurance (except determined in classes 10, of 11, of 12);

14) class 14 - insurance of the credits;

15) class 15 - suretyship insurance (guarantees);

16) class 16 - insurance of other financial risks (except determined by classes 14, of 15);

17) class 17 - insurance of court costs;

18) class 18 - expenditure insurance, connected with assistance (assistans) to persons who got into difficulties during making of travel.

2. Belong to the classes of life insurance:

1) class 19 - life insurance (other, than is provided by classes 20, of 21, of 22, of 23);

2) class 20 - life insurance before marriage and till the child's birth;

3) class 21 - investment life insurance;

4) class 22 - permanent health insurance;

5) class 23 - pension insurance.

3. The list is risk within classes of insurance, the characteristic and classification signs of classes of insurance, risks within insurance classes, and also features of implementation of activities for insurance and the conclusions of agreements on classes of insurance are determined by special laws by regulation of the market of insurance and regulatory legal acts of the Regulator.

Article 5. Separate divisions of the insurer

1. The insurer has the right to open separate divisions (branches, representations) in the territory of Ukraine according to the procedure and according to requirements of this Law and regulatory legal acts of the Regulator.

2. The insurer has the right to perform activities for insurance in the territory of foreign states through the separate divisions created according to the procedure, established by the legislation of the state of registration of such separate divisions, with observance of the requirements established by regulatory legal acts of the Regulator.

3. Nonresident insurers perform activities for insurance in the territory of Ukraine in the form and procedure established by this Law and regulatory legal acts of the Regulator.

4. The insurer shall provide compliance of activities of the separate divisions to requirements of the law and regulatory legal acts of the Regulator.

5. Data on separate divisions of insurers join in the Register. The insurer can perform activities through separate division only after inclusion of data on such separate division in the Register.

6. The insurer shall report to the Regulator about opening, changes in activities or the location (place) or the termination of activities of separate division according to the procedure and the terms established by regulatory legal acts of the Regulator.

Article 6. Activities of the nonresident insurer

1. The nonresident insurer has the right without receipt of the license of the Regulator for implementation of activities for insurance according to this Law to perform such activities for insurance in the territory of Ukraine:

1) insurance on insurance classes 5, 6, 7, 11, 12;

2) reinsurance.

2. The nonresident insurer has the right to perform activities for insurance in the territory of Ukraine under following conditions:

1) the state in which the nonresident insurer is registered is member of the World organization of trade. This requirement is not applied to the nonresident insurers performing reinsurance in the territory of Ukraine;

2) to the state in which the nonresident insurer is registered, clauses of the international bodies concerning accomplishment of international standards by it in the sphere of prevention and counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction are not shown;

3) the legislation of the state of registration of the nonresident insurer assumes implementation of state regulation and supervision of activities for insurance;

4) between Ukraine and the state in which the nonresident insurer is registered the international treaty on prevention of tax evasion and avoidance of double taxation is signed;

5) the state in which the nonresident insurer is registered is not included in the list of offshore zones determined according to the legislation of Ukraine;

6) the nonresident insurer has the corresponding permission to implementation of insurance (reinsurance) according to the legislation of the state in which he is registered;

7) the rating of financial reliability (stability) of the nonresident insurer established by the international rating agency conforms to the requirements established by regulatory legal acts of the Regulator;

8) the state in which the nonresident insurer is registered is not among the states which perform the armed aggression against Ukraine in the value given in article 1 of the Law of Ukraine "About defense of Ukraine";

9) the nonresident insurer meets other requirements established by regulatory legal acts of the Regulator.

3. On condition of compliance to the requirements provided by part two of this Article, the nonresident insurer without opening of the representation in the territory of Ukraine without receipt of the license of the Regulator for implementation of activities for insurance according to this Law and irrespective of the territory loss occurrence has the right to perform such foreign economic activity in the territory of Ukraine:

1) the conclusion and execution of insurance contracts with residents concerning object of insurance with which insurance interests of the insurer or other person determined in the insurance contract in case of risks insurance on the insurance classes specified in Item of 1 part one of this Article are connected;

2) conclusion and execution of contracts of reinsurance with resident insurers.

Article 7. Activities of branch of the nonresident insurer

1. The nonresident insurer has the right to open branch in Ukraine under such circumstances:

1) the nonresident insurer meets the requirements of part two of article 6 of this Law;

2) the legislation of the state in which the nonresident insurer is registered according to the Regulator, carried out in the procedure established by it, does not contain provisions which can interfere/limit interaction of the Regulator and supervisory/monitoring bodies of such state and/or interfere with the Regulator in implementation of supervising powers by it concerning such branch of the nonresident insurer;

3) the size of the assigned capital of branch of the nonresident insurer at the time of issue of license for activities to it on insurance at least the size of the minimum capital of the insurer determined according to part three of article 40 of this Law;

4) availability of the commitment irrevocable letter of the nonresident insurer about unconditional accomplishment of obligations by it which arose in connection with activities of its branch in the territory of Ukraine;

5) the state in which the nonresident insurer is registered is not among the states which perform the armed aggression against Ukraine in the value given in article 1 of the Law of Ukraine "About defense of Ukraine".

2. Requirements to the assigned capital and activities conditions in the territory of Ukraine of branches of nonresident insurers are established by this Law and regulatory legal acts of the Regulator.

Section III. Beginning of activities for insurance

Article 8. Form of business of the insurer

1. Insurers in Ukraine are created in the form of joint-stock company or additional liability company (except branches of nonresident insurers).

2. The legislation on joint-stock companies and on additional liability companies is applied to insurers taking into account the features established by this Law and regulatory legal acts of the Regulator.

3. If provisions of other laws contradict provisions of this Law, provisions of this Law are applied.

Article 9. Name of the insurer

1. The insurer has obligation and exclusive right to use in the full name any of words "insurer", "insurance", "insurance company", "insurance organization" and derivative of them, and also has the right to use reducing "SK".

The name of the insurer who obtained license for activities on insurance which grants the right to perform activities for insurance for life insurance classes, or it intends to obtain such license, shall contain the word "life" or derivative of it.

Words "insurer", "insurance", "insurance company", "insurance organization" and derivative of them is allowed to use in the name only to those legal entities who have license for activities on insurance or intend to obtain such license, and also to associations of such legal entities.

2. It is not allowed to use for the name of the insurer the name which repeats the existing name of other insurer or is similar to such an extent that can lead to mistake in perception, or misleads concerning activities which are performed by the insurer.

3. Only the insurer whose 100 percent of the authorized capital belong to the state has the right use in the name the words "national", "state" or derivative of them.

4. The regulator has the right to refuse consideration of question of licensing or the change of the name of the insurer having the license, in case of non-compliance provided by this Article of requirements to the name of the insurer.

Article 10. Members of the insurer

1. Legal entities in whom the insurer has essential participation, public associations, political parties, religious and charitable organizations cannot be members of the insurer.

2. The state of Ukraine can be the member of the insurer on behalf of the Cabinet of Ministers of Ukraine or bodies authorized by it.

3. Founders and owners of essential participation of the insurer shall have faultless goodwill and satisfactory financial/property condition.

Requirements to goodwill, financial/property condition of founders of the insurer and owners of essential participation in the insurer, procedure for their assessment are established by regulatory legal acts of the Regulator.

Article 11. Licensing of activities for insurance

1. The legal entity acquires the status of the insurer and the right to implementation of activities for insurance only after receipt of the license for activities on insurance (further - the license) issued by the Regulator.

2. It is forbidden to perform activities for insurance without license, except the cases determined by this Law.

3. The license can be granted on implementation of activities on:

1) to direct insurance of life on the chosen insurance classes (to risks within the corresponding class) determined by part two of article 4 of this Law taking into account the features provided by part three of article 4 of this Law;

2) to direct insurance to other, than life insurance, on the chosen insurance classes (to risks within the corresponding class) determined by part one of article 4 of this Law taking into account the features provided by part three of article 4 of this Law;

3) to inward reinsurance on the chosen insurance classes (to risks within the corresponding class).

4. The insurer in the presence of license for activities on insurance and in the cases determined by the law has the right to provide financial service in provision of guarantees according to the procedure, determined by regulatory legal acts of the Regulator.

5. The license for activities on direct insurance on the chosen classes of insurance (to risks within the corresponding class) grants the right to sign insurance contracts and/or joint insurances, to perform outward reinsurance on the insurance classes specified in the license (to risks within the corresponding class), and also to perform inward reinsurance on the following classes of insurance (to risks within the corresponding class) provided that within calendar year the amount of gross premiums to agreements of inward reinsurance does not exceed 10 percent of total amount of gross insurance premiums, but anyway constitutes no more than 7 million hryvnias.

The right to implementation of inward reinsurance without observance of the restrictions specified in paragraph one of this part on the chosen insurance classes (to risks within the corresponding class) is provided to the insurer in case of receipt of license for activities on inward reinsurance taking into account part six of this Article and according to the procedure, determined by article 14 of this Law. The insurer who intends to perform activities for outward reinsurance in case of excess of amount of gross premiums to agreements of the inward reinsurance provided by paragraph one of this part shall obtain license for activities on inward reinsurance according to the procedure, determined by article 14 of this Law.

6. The license for activities on inward reinsurance on the chosen insurance classes (to risks within the corresponding class) grants the right to accept the risks in reinsurance on insurance classes (to risks within the corresponding class) specified in such license and to transfer risks to reinsurance on insurance classes (to risks within the corresponding class) which are specified in the license (output retrocession).

7. The insurer cannot have at the same time license for activities on direct insurance and/or inward reinsurance on classes of insurance of other, than life insurance, and on life insurance classes, except the following cases (further - health care insurance):

1) the insurer who obtained license for activities on direct insurance and/or inward reinsurance only on classes of insurance 1 and/or 2, can obtain license for activities on direct insurance and/or inward reinsurance on life insurance classes;

2) the insurer who obtained license for activities on direct insurance and/or inward reinsurance on life insurance classes can obtain license for activities on direct insurance and/or inward reinsurance on classes of insurance 1 and/or 2.

8. The insurer who obtained license for activities on direct insurance and/or inward reinsurance on life insurance classes (the main risks) can without receipt of the license for implementation of risks insurance, included in classes of insurance 1 and/or 2, to perform insurance of these auxiliary risks in case of accomplishment of the following conditions:

1) such auxiliary risks concern object of the insurance insured on the main risks;

2) such auxiliary risks are connected with the main risk which belongs to the class of insurance on which the insurer has the license;

3) auxiliary risks are insured according to the same insurance contract according to which the main risk is insured;

4) implementation of insurance of auxiliary risks is provided by the plan of activities of the insurer submitted to the Regulator for receipt of license for activities on insurance.

9. The license is granted taking into account the features and/or restrictions to the corresponding class of insurance determined by the legislation and the requirements established by this Law.

10. The legal entity who intends to perform activities for insurance (further - the applicant) addresses the Regulator for receipt of the license within 12 months from the date of its state registration as legal entity.

11. Founders of the applicant are forbidden to alienate and encumber with obligations the stocks (shares) owned by them, and owners of the mediated essential participation are forbidden to alienate and encumber with obligations the participation in such legal entity which is due to them from the date of state registration of the legal entity about day of licensing.

The transaction made with violation of the prohibition provided by paragraph one of this part is insignificant. The regulator informs the applicant, the parties according to such transactions, and in case of creation of the insurer in the form of joint-stock company - depository institutions which serve accounts in securities of the parties on such transaction, and Central Securities Depository about negligibility of such transaction and places the relevant information on pages of official Internet representation of the Regulator no later than the next working day after he knew of making of such transaction.

12. The applicant shall take measures for state registration of the termination of the legal entity or change the name, having excluded from it words "insurer", "insurance", "insurance company", "insurance organization" and derivative of them according to provisions of article 9 of this Law and to make changes to types of economic activity, having excluded from them those which concern activities for insurance if:

1) by results of consideration of document package, provided by the applicant for receipt of the license, the Regulator made the decision about:

a) refusal in licensing if the applicant did not eliminate the basis for refusal in licensing and repeatedly did not give within six months from the date of such decision new document package for licensing or such new document package was given during the specified term, but by results of its consideration the Regulator repeatedly made the decision on refusal in licensing;

b) leaving of documents without consideration and return to his applicant, and the applicant did not eliminate the basis for leaving of documents without consideration and did not give within six months from the date of such decision new document package for licensing or such new document package was given during the specified term, but by results of its consideration the Regulator repeatedly made the decision on leaving of documents without consideration;

2) the applicant did not address the Regulator in time, determined by part ten of this Article, for receipt of the license.

The applicant shall make the actions provided by paragraph one of this part, in time no more than one month from date:

acceptances by the Regulator of the decision on repeated refusal in licensing or repeated leaving of document package without consideration;

the expirations of stipulated in Item 1 this part of term for repeated representation of document package after decision making about refusal in issue of the license/decision on leaving of documents without consideration;

the expiration provided by part ten of this Article.

If the applicant did not make the actions provided by this part, the Regulator has the right to take a legal action with the claim for the termination of state registration of such legal entity.

13. The insurer has no right to transfer the license to the third parties. Outsourcing of key functions of the insurer which is performed according to this Law, the Law of Ukraine "About financial services and finance companies", to other special laws and regulatory legal acts of the Regulator is not transfer of the license.

Article 12. Documents which are filed for receipt of the license

1. The applicant for receipt of the license represents to the Regulator according to requirements, according to the procedure and in form which are established by regulatory legal acts of the Regulator, such documents and information:

1) statement for licensing;

2) strategy and plan of activities of the applicant for the next three years;

3) documents and information for identification and assessment of goodwill of founders (for the founder - the legal entity - also members of executive body and/or supervisory board) and all persons who perform indirect possession by essential participation in the applicant;

4) documents and information for:

identifications and assessments of conformity to qualification requirements of heads of the applicant, chief risk manager, chief komplayens-manager, main internal auditor, responsible actuary;

assessments of conformity of the supervisory board and executive body of the applicant to the requirements of the collective validity established by regulatory legal acts of the Regulator;

5) documents and information for assessment:

financial condition of founders - legal entities, property condition of founders - physical persons, and also financial/property condition of all persons which perform indirect possession by essential participation in the applicant;

sources of origin of means for forming of the authorized capital of the applicant;

6) information relatively:

associated persons of the founder - physical person;

legal entities in whom the founder - the physical person is head;

legal entities in whom the applicant owns essential participation;

7) information on the connected faces of the applicant;

8) information on structure of property of the applicant;

9) information on management system the applicant, including about corporate management system, internal control system, organizational structure of the applicant;

10) copies the politician and the domestic situations of the applicant determined by the law and regulatory legal acts of the Regulator;

11) information and documents confirming the applicant's compliance to the conditions of implementation of activities for insurance established by regulatory legal acts of the Regulator;

12) the conclusion (pre-trial detention) of the Antimonopoly Committee of Ukraine concerning concentration and/or permission of the Antimonopoly Committee of Ukraine to concentration in cases, stipulated by the legislation;

13) the copy of the registration certificate of share issue (if the insurer is created in the form of joint-stock company) or the certificate of bank institution of forming of the authorized capital (if the insurer is created in the form of additional liability company);

14) the copy of the document which according to the legislation confirms introduction of payment for consideration of document package for licensing which amount is established by the regulatory legal act of the Regulator.

2. The applicant shall confirm to the Regulator the compliance to the requirements established by this Law, other laws of Ukraine and regulatory legal acts of the Regulator for implementation of activities for insurance.

Founders of the applicant and owners of essential participation in the applicant shall confirm to the Regulator compliance of the financial/property condition and goodwill to the requirements established by the legislation of Ukraine.

The applicant's heads, the chief risk manager, the chief komplayens-manager, the main internal auditor, the responsible actuary shall confirm to the Regulator the compliance to the qualification requirements established by regulatory legal acts of the Regulator.

3. The applicant on the date of the request for receipt of the license and during the whole time of implementation of activities for insurance shall conform to the requirements established by this Law, other laws of Ukraine and regulatory legal acts of the Regulator adopted according to them.

The regulator has the right to hold consultations with other public authorities, public authorities of the foreign states, and also with observance established by the law of requirements to communicate concerning confirmation of conformity of the applicant to the established requirements.

4. For receipt of the license the applicant files to the Regulator at the same time all documents and information determined by this Law and regulatory legal acts of the Regulator.

In case of non-presentation by the applicant of the additional information, documents and/or explanations and/or not remedial action in time, determined by the Regulator, the document package is considered incomplete and/or containing incomplete information.

Article 13. Procedure for consideration of document package and the basis for refusal in licensing

1. The regulator according to the procedure, established by this Law and its regulatory legal acts, considers the document package for receipt of the license provided by the applicant and makes the decision by results of its consideration within three months from the date of receipt of complete document package.

2. Within 10 working days from the date of receipt of document package from the applicant Regulyator has the right to make the decision on leaving of the statement for licensing without consideration and to return document package for receipt of the license to the applicant if:

1) the applicant provides incomplete document package;

2) documents are processed with violation of the requirements established by regulatory legal acts of the Regulator.

In case of decision making about leaving the Regulator directs applications for licensing without consideration to the applicant the notification on it electronically with indication of the basis of adoption of such decision.

After elimination of the reasons which formed the basis for decision making about leaving of the statement for licensing without consideration, the applicant has the right to give repeatedly document package for receipt of the license which is considered according to the procedure, established by this Law.

3. The current of term of consideration of the document package determined by part one of this Article stops in case of provision by the Regulator to the applicant of request about provision of the additional information, documents and explanations or requirements about elimination by the applicant of violations before the date of receipt from the applicant of answer/remedial action, including concerning use of the name by the insurer which does not meet the requirements of article 9 of this Law, but no more than for one month in total for all such requests of the Regulator.

4. In the course of consideration of document package the Regulator in the procedure determined by it performs assessment of conformity of heads of the applicant, chief risk manager, chief komplayens-manager, main internal auditor, responsible actuary to requirements of this Law and regulatory legal acts of the Regulator for review of such persons to the corresponding positions.

5. By results of consideration of document package in essence if it was not left without consideration, the Regulator makes the decision on issue to the applicant of the license or on refusal in licensing.

6. In case of decision making about licensing the Regulator within three working days from the date of its acceptance enters the information about the applicant in the Register.

7. The regulator reports to the applicant about the decision made by it by results of consideration of document package for receipt of the license within three working days from the date of its acceptance and sends to the applicant the copy of such decision means of electronic communication.

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