The Cabinet of Ministers of Ukraine is finalizing preparations to implement a new insurance program, the main goal of which is to provide compensation for damages to property in frontline regions. Funding for the reimbursements will be provided through the Export Credit Agency (ECA).
This is reported by Finway
Program Details and Implementation Mechanisms
The initiative includes two main components. The first part of the program allows residents and entrepreneurs in frontline areas to receive compensation for lost or damaged property by submitting an appropriate application to the ECA. The second part involves creating a military risk insurance system in other regions of the country, which includes budgetary compensation for part of the insurance premium. This mechanism is intended to make insurance more accessible for both businesses and citizens.
According to the head of the Verkhovna Rada Committee on Finance, Taxation, and Customs Policy, Danilo Hetmantsev, specific amendments to the law regarding the status of the ECA need to be made, and a government decision on budgetary support for this initiative must be adopted to launch the program.
“The expenses are moderate. It has been a challenging path. I thank the Cabinet of Ministers and the National Bank for their constructive approach and look forward to final decisions,” the official wrote.
Prerequisites and Expected Effects
Last autumn, the National Bank of Ukraine, the Ministry of Economy, and the Ministry of Finance presented a draft law on the “Military Risk Insurance System.” Its goal is to implement a nationwide insurance system against military risks for the population and businesses. The lack of such coverage, according to the then First Deputy Minister of Economy Oleksiy Sobolev (now the Minister of Economy, Environment, and Agriculture of Ukraine), is a significant barrier to attracting investments and the economic development of the country.
There are already some military risk insurance tools operating in the market, including the Unity mechanism for shipping, where the state assumes part of the risks and helps reduce rates. There are also joint projects with international organizations such as MIGA and DFC, and the first military risk insurance contract for investment loans has been concluded through the ECA.
The government plans to consolidate all existing programs into a single pool and develop transparent rules for attracting international reinsurers to the market. The comprehensive military risk insurance system will be funded through mandatory insurance payments as well as donor support. It will cover risks of physical damage caused by war, including insurance for property pledged as collateral and residential construction projects.