Publication date: 27.03.2024
I am studying in the third year of the State University of Economics and Technology.I specialize in contractual, economic and corporate law, in particular, I provide consultations and write articles.
One of the constituent elements of the country’s modern economy is insurance activity, which is the protection of the interests of individuals and legal entities by insuring risks associated with life, health, disability, pensions, etc. The insurance company itself, which respectively provides insurance services, is a financial institution or a branch of a non-resident insurer, vested with the right to carry out insurance activities. Consequently, an insurance company is a full-fledged unit of entrepreneurial activity with its own structure, funds, and responsibility. At the same time, insurance activity has several varieties, namely: direct insurance (insurance in accordance with classes), reinsurance, asset management of an insurance company, as well as the sale of insurance products. As for the classes mentioned above, we are talking about 23 classes of insurance contained in Art. 4 of the Law of Ukraine “On Insurance” and the most common of them are: life insurance, health insurance, accident insurance, sickness insurance, pension insurance, etc.
Features of the insurance company:
An insurance company can operate in two organizational and legal forms of choice, namely: a joint stock company and a company with additional liability. There are also requirements for the name of the company, because if an enterprise plans to specialize in insurance activities and, accordingly, obtain a license, then its name must contain words such as “insurance company”, “insurer” or, for example, “insurance organization”. Participants of the company can be individuals and legal entities, except for legal entities in which the company has a significant participation. The opportunity to be a participant is also excluded for public organizations, political parties, charitable and religious organizations. It should be noted that insurance is a field of activity that is sufficiently regulated by law, therefore there are a number of requirements in relation to it that the insurance company must meet. The most significant of them is the size of the authorized capital, which depends on the classes that are elected by the founders and can reach 32 - 48 million UAH. In this case, capital must be formed exclusively in monetary form. The requirements also concern the ownership structure, namely its transparency. Accordingly, this obliges to submit annual information to the Regulator to report changes in the ownership structure. It is also necessary to draw up a business plan in the insurance industry for three years, which must be followed during its validity period, and periodically evaluate its implementation and update the plan for the same period. An important aspect is also the management structure of the company, the supreme body of which is the general meeting. The insurer is also obliged to create a supervisory board that determines the company’s development strategies, monitor the activities of the executive body, protect the interests of clients, etc. As for the executive body, it is the board (if the organizational and legal form is a joint-stock company), or the directorate (if an ALC). It is also important to note the creation of regulatory capital, the purpose of which is to support the solvency of the insurer. Capital will be divided into three levels. In general, company participants undertake to maintain the solvency of the insurer.
Procedure for creating an insurance company:
1. The first step is state registration. In general, before submitting documents to the registrar, the founders implement a number of actions to determine the organizational and legal form, draw up constituent documents, form an internal structure, study the market, etc. If these steps have already been completed, then it is necessary to submit an application and all other necessary documents to the state registrar. The result of registration is entering information into the Unified State Register and receiving a certificate confirming registration.
2. The second stage concerns insurance companies that operate in the form of joint-stock companies and consists of registering the issue of securities (shares). If the company is private, it has the right to issue only registered shares, and if public - both registered and bearer shares.
3. The third stage is related to licensing, because obtaining a permit is mandatory for business entities wishing to carry out activities in the insurance sector. To do this, a legal entity must meet all legally established requirements. The license seems to be for carrying out certain types of insurance activities, and to obtain it you need to apply with a package of documents to the Regulator, that is, the NBU.
Legal services for business in creating an insurance company:
A business lawyer may be needed at any of the above-described stages of creating an insurance company. Starting with the collection of documents, recognition with an organizational and legal form and registration, ending with obtaining a license. A lawyer for business is also highly desirable when registering the issue of securities, as this is a rather complex process that contains its own legal features. Therefore, legal protection of business is an indispensable tool for creating a successful, harmonious company.
