ECONOMIC AND LEGAL PRINCIPLES OF THE FUNCTIONING OF THE INSURANCE MARKET IN MODERN CONDITIONS

Abstract

In the course of the study, a comprehensive analysis of the economic and legal factors determining the functioning of the insurance market of Ukraine in the context of economic transformation and adaptation of the legal system to EU legislation was carried out. It has been found that the efficiency of insurance companies largely depends on the stability of the legal framework, transparency of regulatory procedures, the level of competition in the market and the overall macroeconomic environment.

The author analyses the key legal acts regulating the functioning of the insurance market, in particular, the new Law of Ukraine ‘On Insurance’. The Law is the result of the adaptation of national insurance legislation to the standards of the European Union, in particular to the provisions of the Solvency II Directive. The article analyses changes in regulatory policy, capital requirements, corporate governance, consumer protection, and market exit mechanisms.

It is found that the economic environment in which insurance companies operate is characterised by instability, low effective demand for insurance services, and limited access to financial resources. Despite a gradual increase in gross insurance premiums in certain segments (especially in health and property insurance), the overall level of insurance penetration in the economy remains low compared to EU countries.

In addition, the study identified such problems as a low level of voluntary insurance, a lack of public confidence in insurance companies, poor development of innovative insurance products, and insufficient digitalisation of the industry. At the same time, positive trends have been identified, such as the strengthening of the role of the National Bank of Ukraine, the intensification of the process of harmonising legislation with European standards, and the growth of the number of financially sound insurers.

Thus, the results of the study confirm that ensuring the efficient functioning of the insurance market requires a comprehensive approach to improving its economic and legal framework, which should include both improving regulatory policy and creating an enabling environment for the development of insurance in Ukraine.