State Commission for Financial Service Markets Regulation of Ukraine promulgated the Draft Instruction on Approval of Alterations to the Application of Paragraphs 165.1.27 and 165.1.28 165.1 Article 165 Chapter IV of the Tax Code of Ukraine that was previously approved by the State Commission’ Instruction № 997 of 24 December 2010.
4 March 2011 the State Commission for Financial Service Markets Regulation of Ukraine officially issued the Draft Instruction of the State Commission for Regulation of Financial Services of Ukraine on Approval of Alterations to the Application of Paragraphs 165.1.27 and 165.1.28 165.1 Article 165 Chapter IV of the Tax Code of Ukraine on Insurance Payments, Amounts of Indemnity, Redemption Sums and Pension Benefits Received by the Taxpayer under Agreements of Insurance, Private Pension, Pension Contributions and Trust Management, amending the Instruction according to the EBA Life Insurance Committee proposals.
One should note that in sub-paragraphs 1.2, 1.3 and 1.4 of the Section II of the Order concerning life insurance or health of the taxpayer contained the phrase “fact of damage to the insured (insurant).” However, the object of insurance is insured person and not insured (insurant), and therefore the fact of damage can refer only to the insured person because the insurant may be subject to insurance only if he /she simultaneously acts as the insured person.
In this regard, the EBA Life Insurance Committee has developed proposals for amending the abovementioned Order: the word “insurant” in sub-paragraphs 1.2, 1.3, 1.4 was suggested to be replaced with the word-combination “insured person” with a goal to avoid inaccurate interpretation of insurance terms. Appropriate appeal was submitted to the State Commission as well as other relevant state institutions.
EBA Life Insurance Committee members believe that amending of such a mistake, which in fact was present in the previous version of the Order, will be an important step for life insurance market functioning.
EBA looks forward to the final approval of these alterations by the State Commission for Regulation of Financial Service Markets Regulation of Ukraine in the short term.