Prudential regulation of insurance activities: theoretical and applied imperatives in the context of financial uncertainly

Alekseyenko Lyudmyla
Dr. Sc. (Econ.), Prof., Head of the Department of Management and Administration, Ivano-Frankivsk Research and Development Institute of Management Ternopil National Economic University, e-mail: olecolm@ukr.net

Kosovych Olha
Dr. Sc. (Philol.), Prof., Head of the Department of Romano-Germanic Philology,Ternopil Volodymyr Hnatiuk National Pedagogical University, e-mail: olgak2270@gmail.com

Cite this article:

Alekseyenko L., Kosovych O. Prudential regulation of insurance activities: theoretical and applied imperatives in the context of financial uncertainly. Scientific Bulletin of the Odessa National Economic University. 2020. № 1-2 (274-275). pp. 69-79.

Abstract

Object of study. The object of the study are the processes of prudential regulation in the field of insurance. One of the most problematic issues is the lack of developed theoretical and methodological and applied approaches to determining the features of prudential regulation and supervision of insurance activities in terms of financial uncertainty. Methodology. The information base of the research is the regulations of the National Bank of Ukraine, standards and recommendations of the International Association of Insurance Supervisors and the Committee of European Insurance and Occupational Pensions Supervisors. The basic methods used are the following: dialectical, which allows to explore the combination of factors which are interrelated; analysis, synthesis, induction and deduction (with clarification of the categorical system of research; study of international practice, comparisons and special legal (when considering the legal framework, identifying problems with the functioning of insurance regulation, study of the existing model of supervision), which provided an opportunity to formulate conclusions and develop recommendations to ensure prudential regulation of insurance business. Results. On the basis of empirical generalizations in the article it has been proved that it is expedient to investigate the prudential regulation of insurance activities in terms of the system of regulation of insurance activities aimed at ensuring the stability of the insurance system (macroprudential regulation), as well as protecting the interests of clients of insurance companies and the financial stability of insurance companies (microprudential regulation). The fact that the development of insurance is characterized by a change in the regulatory framework under the regulatory supervision of the National Bank of Ukraine has been emphasized in the article. The main problems of institutional support of functioning and development of prudential regulation of insurance activity have been determined. Scientific novelty. The article has proposed to deepen the theoretical approaches to the implementation of prudential regulation of insurance activities in the modernization of the financial market, taking into account the interests and goals of participants in the financial ecosystem. Theoretical and (or) practical significance. The practical significance lies in the fact that insurance supervision should be based on the principles of financial security control in order to ensure sustainable development of the insurance market; рrudential regulation should help control, prevent systemic risks and the main object of attention should be systemically important insurance organizations.

Keywords

spatial development of economy, state regulation, prudential regulation, prudential supervision, insurance business, financial market, financial uncertainty, split.

JEL classification: G100; G210; G220; G280

УДК: 368: 336.71.078.3

References

1. Внукова Н. М., Корват О. В., Опешко Н. С. Пруденційний нагляд у сфері страхування : монографія. Харків : ХНЕУ ім. С. Кузнеця, 2016. 260 с.
2. Крупка Я. Д. Нові аспекти контролю та регулювання діяльності страхових компаній. Проблеми економіки. 2019. № 3. C. 240–245. DOI: https://doi.org/10.32983/2222-0712-2019-3-240-245.
3. Njegomir V., Petrović Z. Pravna regulativa solventnosti osiguravajućih društava u EU – Solventnost II. Megatrend revija. 2018. Vol. 15. Br. 1. S. 49–64. DOI: 10.5937/MegRev1801049N.
4. Маргасова В. Г., Дубина М. В., Тунік М. В. Актуальні проблеми розвитку страхового ринку України. Проблеми і перспективи економіки та управління. 2015. № 2. С. 219–228.
5. Swain R., Swallow D. The Prudential Regulation of Insurers Under Solvency II. Quarterly Bulletin. 2015. Pp. 139–152. URL: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2015/the-prudential-regulation-of-insurers-under-solvency-2.pdf?la=en&hash=7122450C1347D045A6CF5B33C35BFA04E038D0E0 (accessed 20 December 2019)
6. Global Financial Stability Report / International Monetary Fund : website. URL: https://www.imf.org (accessed 29 December 2019).
7. International Financial Reporting Standards / IFRS Foundation : website. URL: https://www.ifrs.org/issued-standards/list-of-standards (accessed 23 December 2019).
8. International Association of Insurance Supervisors : website. URL: https://www.iaisweb.org/home (accessed 22 December 2019).
9. Committee of European Insurance and Occupational Pensions Authority (EIOPA) : website. URL: https://europa.eu/european-union/about-eu/agencies/eiopa_en (accessed 22 December 2019).
10. ESRB publishes its ninth annual report / European Systemic Risk Board : website. URL: https://www.esrb.europa.eu/home/html/index.en.html (accessed 03 January 2020).
11. Colaert V., Panzavolta M., Sara de Moor. The future of the institutional architecture of the European Supervisory Authorities : Master thesis of law, 122 p. URL: https://www.scriptieprijs.be/ sites/default/files/thesis/2019-10/MASTERTHESIS_SARADEMOOR_LLM_AY1819.pdf (accessed 25 December 2019).
12. Сплетухов Ю. А., Дюжиков Е. Ф. Страхование : учеб. пособ. Москва : Инфра-М, 2016. 311 c.
13. Risk management and supervision of insurance companies (Solvency 2) / European Commission : website. URL: https://ec.europa.eu/info/business-economy-euro/banking-and-finance/insurance-and-pensions/risk-management-and-supervision-insurance-companies-solvency-2_en (accessed 21 December 2019).
14. Інформація про стан і розвиток страхового ринку України за 2019 рік / Нацкомфінпослуг : сайт. URL: https://www.nfp.gov.ua/ua/Informatsiia-pro-stan-i-rozvytok-strakhovoho-rynku-Ukrainy.html (дата звернення: 28.12.2019).
15. Універсальний словник-енциклопедія. URL: http://slovopedia.org.ua/29/53407/19359.html (дата звернення: 24.12.2019).
16. Регулятори фінансового ринку затвердили Стратегію розвитку фінансового сектору України до 2025 року / Єдиний веб-портал органів виконавчої влади України. URL: https://www.kmu.gov.ua/news/regulyatori-finansovogo-rinku-zatverdili-strategiyu-rozvitku-finansovogo-sektoru-ukrayini-do-2025-roku (дата звернення: 24.12.2019).
17. Стратегія Національного банку України. Програма дій 2020 / Національний банк України, 2020. 21 с.
18. Про внесення змін до деяких законодавчих актів України щодо удосконалення функцій із державного регулювання ринків фінансових послуг : Закон України № 79-ІХ від 12.09.2019 p. URL: https://zakon.rada.gov.ua/laws/show/79-20#Text (дата звернення: 20.12.2019).