National Bank rates Ukraine's transition to new MTPL insurance rules as excellent – First Dpty Governor
The National Bank of Ukraine (NBU) has rated the transition of the Mandatory Third-Party Liability Insurance (MTPL) market to new conditions from January 1, 2025, as excellent, said Kateryna Rozhkova, First Deputy Governor of the NBU, in an interview with Interfax-Ukraine.
"The transition went excellently. The process was smooth and transparent for everyone. Both old policies (issued last year under the previous law) and new ones are functioning in parallel," she stated.
Rozhkova noted that the Motor (Transport) Insurance Bureau of Ukraine (MTIBU) had prepared well in terms of corporate governance and internal procedures.
"We do not see any issues at this time. To make a final assessment, we need to operate under the new rules for at least a year. However, in my opinion, both the insurance market and vehicle owners have transitioned smoothly," she added.
Discussing the MTIBU's operations under the new MTPL law, Rozhkova pointed out that the NBU has effectively become the regulator of the MTIBU, making the bureau its supervised entity.
The MTIBU now has a two-tier corporate governance structure. The NBU no longer performs the role of the Bureau's Coordinating Council but has the authority to approve and demand the replacement of top management if violations occur. MTIBU members elect their executive body, and the NBU reviews and approves these candidates, with the power to demand their dismissal if necessary.
Additionally, mandatory reporting on fund formation and utilization has been introduced, along with an annual independent audit, similar to banking regulations. If funds fall below a critical level, the MTIBU has the right to increase contributions from member insurance companies but must report on fund utilization.