ORGANIZATION OF COMPLIANCE RISK ACCOUNTING IN INSURANCE ACTIVITIES IN THE CONTEXT OF SUSTAINABLE DEVELOPMENT

Abstract

Under the modern conditions of globalized financial market, insurance companies face complex challenges associated with functioning in a highly regulated legal field, where any deviations from regulatory requirements can cause systemic consequences. Compliance risks in this context become a critical factor that directly determines the level of financial resilience, preservation of reputation capital and long-term competitiveness of the institution.

A holistic model of the organization of compliance risk accounting in insurance activities, which organically integrates the environmental, social and governance (ESG) principles as a strategic imperative of modern business, has been developed. The conceptual apparatus, evolution of definitions and specifics of compliance risk in the insurance sector have been analyzed in detail; an extensive taxonomy of risks taking into account their intersection with operational, legal and reputational dimensions is presented; modern methods of identification, assessment and continuous monitoring are described, including relevant tools and scenario analysis. Particular attention is paid to the construction of structured risk registers, the definition and implementation of key compliance control (KCI) and risk (KRI) indicators as well as the integration of the system with the “three lines of defense” model, internal audit and corporate ESG strategy.

A step-by-step “roadmap” for the implementation of the model is proposed. The principle of double materiality as a tool for transparent non-financial reporting that takes into account the financial impact of ESG factors on the company is considered separately. Ways of adapting the proposed model to the specifics of Ukrainian insurance market in the context of active European integration, harmonization with EU directives (in particular, Solvency II, CSRD) and the need to counter new challenges, such as greenwashing, cyber threats and sanctions regimes, are presented.