ON THE CHOICE OF ORGANIZATIONAL AND LEGAL STRUCTURE FOR INSURERS IN THE TRANSPORTATION INDUSTRY

Abstract

This article aims to present various perspectives, considerations, and legal regulations related to determining the most suitable organizational and legal structures for insurers operating in the transportation industry. Research methods. To achieve this, the author employed well-established scientific research methods such as historical and legal analysis, systemic and structural approaches, analytical and synthetic techniques, formal and logical reasoning, as well as comparative legal analysis and interpretation of legal provisions. These methods were used to analyze empirical and practical data and draw sound conclusions. Results. It is shown that the amendments to the Law of Ukraine “On Insurance” limited the options for insurers to choose the organizational and legal form to a public joint-stock company (PJSC), a private joint-stock company (PrJSC), and an additional liability company (ALC) (previously they could also operate as a general and limited partnership). Despite the restrictions on the principle of ensuring economic diversity and equal protection of all business entities by the state, the narrowing of the choice of organizational and legal forms aimed at consolidating insurers and enhancing the Ukrainian insurance market with insurers belonging to large business entities or associations of insurers was generally supported. Each organizational and legal form of business association - association, corporation, concern, consortium, a holding company – has distinct advantages and may be chosen by insurers when merging with other participants in the insurance and transportation markets. This means that “soft” associations of enterprises can be established, such as associations in which participants delegate minimum powers from their overall scope of competence to the  parent company or the association itself. It is encouraging to note that insurers are forming consortiums with banks, carriers, and other entities to establish long-term relationships in international, especially intercontinental shipping. Insurance companies are also forming holding companies with strict vertical management structures.