War risk insurance to be launched in a few months
28 January 13:10
Investment insurance against war risks should start operating in the second quarter of 2024, according to citing a report by the European Business Association.
Such tentative dates for the launch of this insurance were discussed during a meeting of the EBA Committee on Ukraine’s Recovery with ECA Deputy Chairman Oksana Ocheretyana, the report said.
This year, a law came into force that expanded the scope of the Export Credit Agency’s (ECA) activities to include insurance of direct investments and investment loans aimed at developing export-oriented enterprises. The list of military and political risks, as well as the terms and procedure for insurance/reinsurance, are to be defined in a Cabinet of Ministers resolution currently being drafted by the Ministry of Economy and the National Bank. This document should be published in the coming months.
To implement the Law, the ECA is preparing several products that are expected to be available to businesses this year:
- insurance of international and national direct investments in Ukraine and dividends;
- insurance of investment-related loans.
Important criteria for access to this type of insurance will be the creation of export potential as a result of investments.
Potential political risks may include expropriation, expropriation, unjustified revocation of licences, failure to fulfil government obligations, inability to convert currency, etc. Military events include military conflict, hostilities, violent change or overthrow of government, occupation, annexation, etc.
Compensation will be available in the event of a complete business interruption (the difference between the value of investments before the event and the value after the event is compensated). More details will be available after the publication of the relevant draft resolution of the Cabinet of Ministers.