A RISK-ORIENTED APPROACH TO THE PROTECTION OF CONSUMERS OF INSURANCE SERVICES IN UKRAINE: THE ROLE OF THE INSURER’S COMPLIANCE SYSTEM

Abstract

The article substantiates the role of the insurer’s compliance system in implementing a risk-oriented approach to the protection of consumers of insurance services in Ukraine. The purpose of the study is to identify the relationship between risk-based supervision, conduct risk in the insurance market, and the insurer’s internal control architecture. The paper relies on methods of analytical generalisation, comparison, regulatory interpretation, and case analysis. Particular attention is paid to the transformation of the Ukrainian model of supervision over non-bank financial institutions after the strengthening of the National Bank of Ukraine’s powers and the introduction of governance, disclosure, and market conduct requirements. The study demonstrates that consumer protection in insurance should not be reduced to ex post dispute resolution. Instead, it has to be embedded into product design, pre-contractual disclosure, sales scripts, complaint handling, claims settlement, intermediary oversight, and the prevention of conflicts of interest. In this framework, the compliance function performs preventive, monitoring, and corrective tasks: it identifies compliance risks, assesses the probability of consumer detriment, monitors adherence to legal and internal standards, and initiates remediation where unfair practices are detected. The scientific novelty of the article lies in the systematisation of the insurer’s compliance function as an instrument for preventing conduct risk in the context of risk-based supervision and in demonstrating that digital claims-settlement services should be treated not only as an operational convenience but also as an element of consumer protection. The practical significance of the results consists in the proposed directions for improving the insurer’s internal policies, including consumer-oriented product governance, controls over pre-contractual information disclosure, dashboards for monitoring complaints and settlement timeframes, and enhanced compliance training for front-office staff and intermediaries. The paper concludes that an effective compliance system increases transparency, reduces the probability of mis-selling and unjustified refusals, strengthens trust in the insurance market, and supports the alignment of Ukrainian insurance regulation with European consumer protection standards.