The Financial Supervision Commission is pleased to inform all interested parties that in order to assist and facilitate foreign investors in performing their obligation under Art. 145 of POSA, the NOTIFICATION ON DISCLOSURE OF SHARE PARTICIPATION IN A PUBLIC OR INVESTMENT COMPANY FORM endorsed by the FSC has been translated into the English language and published on the FSC’s website.

The obligation of the said persons is to submit the Notification simultaneously in Bulgarian and in English.

The NOTIFICATION ON DISCLOSURE OF SHARE PARTICIPATION IN A PUBLIC OR INVESTMENT COMPANY FORM drafted into the English language may be found under the Documents Section, Documents’ Forms and Samples heading – English version.

On January 19, 2006 the Financial Supervision Commission hosted a one-day visit by students from the 11th and 12th classes of Atanas Burov Professional High School of Light Industry and Economics, the town of Gorna Oryahovitsa. The students were acquainted in detail with the activity of the supervisory institution and its structure; thereafter, they visited the Bulgarian Stock Exchange and Elana Investment Company.

The visit was a continuation of the Development of the Non-banking Financial Sector in Bulgaria Educational Programme, which has been organized by the Commission for 3 years now for high school students from the schools of economics in the country. The aim of the said Programme is to provide professional education, information while promoting the financial culture among students, as well as furthering their knowledge with regard to the financial markets and the role of the regulatory institution. The idea of the above initiative is to enrich the knowledge of the growing up and to awaken their interest in the financial sphere.

1. The Commission approved the issuance of a licence to Balkan Capital Management AD to perform activities as a management company. The company is to certify within a 14-day time period that it has deposited the capital required in compliance with Art. 203, Para. 1 of the POSA.
The company’s founders are Logos – TM Financial House AD, holding 51% of the voting shares in the General Meeting of the Shareholders, and Sofia International Securities Investment Intermediary AD, holding 49% of the said shares.

2. The FSC issued a licence to Capital Management SPV to perform activities as a special purpose vehicle, and namely: investment of funds raised through issuance of securities into receivables. The Commission confirmed a prospectus for public offering of 150,000 pieces of ordinary shares having a nominal value of BGN 1 each. The shares issue was issued by the company as a result of initial increase in its capital stock in compliance with a resolution of the General Meeting of the Shareholders dated October 24, 2005.
The company’s founders are CCB Group Assets Management EAD, holding 70% of the capital stock, and Armeec Insurance Company JSC, holding 30% of the said capital.

3. The FSC issued a licence to CCB Real Estate Fund REIT to perform activities as a special purpose vehicle, and namely: investment of funds raised through issuance of securities into real estates. The Commission confirmed a prospectus for public offering of 150,000 pieces of ordinary shares having a nominal value of BGN 1 each. The shares issue was issued by the company as a result of initial increase in its capital stock in compliance with a resolution of the General Meeting of the Shareholders dated May 25, 2005.
The company’s founders are CCB Group Assets Management EAD, holding 70% of the capital stock, and Armeec Insurance Company JSC, holding 30% of the said capital.

4. The Commission confirmed a prospectus for secondary public offering of bonds issued by St. St. Konstantin and Elena Holding AD. The issue amounts to EUR 5,000,000, distributed into 5,000 pieces of ordinary, naked, interest-bearing debentures having a nominal and issuance value of EUR 1,000 each, a maturity of 60 months, fixed interest rate to the amount of 7.50% simple interest on annual basis, a six-month interest payment period, issuance date: November 18, 2005, and maturity date: November 18, 2010.

5. The Commission entered into the Public Registry a subsequent shares issue issued by Advance Terrafund REIT as a result of increase in the company’s capital stock from BGN 6,500,000 to BGN 11,050,000 through issuance of 10,400,000 pieces of ordinary shares having a nominal and issuance value of BGN 1 each.

6. The Commission imposed temporary prohibition on tender offer submitted by Energoremont Holding AD, Sofia City, for the purchase of shares of Energoremont – Varna AD, the village of Ezerovo, from the company’s other shareholders through First Financial Brokerage House Ltd. Investment Intermediary.

7. The Commission refused to issue a licence to perform activities as a special purpose vehicle to Dextra Realties REIT.

1. The Commission adopted at first reading a Draft Ordinance on the documents, on the procedure for their drawing up, and on advising in the case of occurrence of insurance events involving motor vehicles.

The necessity for adoption of the Ordinance is subject to a Resolution of the Council of Ministers dated December 1, 2005 on amending the methodology used to report the percentage of motor vehicles without Third Party Liability Insurance. In compliance with the shared competencies of the Ministry of Interior and the FSC provided for under the law, the Draft Ordinance shall be forwarded to the Minister of the Interior in order to be approved, and upon obtaining his approval; it shall be published on the FSC’s website for all interested parties’ information.

The Draft Ordinance provides for the exchange of information between the National Police Service Directorate – Ministry of Interior and the Financial Supervision Commission on the occasion of assessment of the coverage of the compulsory Third Party Liability Insurance. It is provided that the National Police Service Directorate – Ministry of Interior shall submit to the FSC monthly by the 20th of each month information on the total number of road accidents registered within the country’s territory and by regions and the number of road accidents registered involving guilty participation of a driver of a motor vehicle non-insured under the Third Party Liability Insurance. On its own part, the FSC shall submit to the National Police Service Directorate – Ministry of Interior monthly by the 20th of each month information on the vehicles having concluded the Third Party Liability Insurance and the number of damages paid by the Guarantee Fund through the fault of owners of motor vehicles without the Third Party Liability Insurance. The insurance coverage shall be calculated as a proportion of the total number of registered road accidents to the number of road accidents involving motor vehicles without the Third Party Liability Insurance.

According to the Draft, it is provided that upon attending a road accident the police authorities shall inspect the insurance policies under the Third Party Liability of the motor vehicles’ drivers participated into the event, and shall establish the insurers issued the policy. Within a ten-day period, the head of the Ministry of Interior’s unit that has investigated the accident shall forward a copy of the record drawn up to the insurer of the driver who has caused the accident.

2. The Commission adopted at first reading a Draft Ordinance on amending Ordinance No. 21 on the own funds and solvency margin of insurers and health insurance companies.
Under the Draft Ordinance, the European directives related to the requirements to the solvency margin of insurers are fully transposed into our legislation.

The Draft Ordinance shall be published on the FSC’s website and shall be forwarded to the Association of Bulgarian Insurers and to the Association of Licensed Voluntary Health Insurance Companies in order to be co-ordinated.

3. The Commission adopted at first reading a Draft Ordinance on the procedure and the methodology of forming the insurers’ technical reserves and of the health insurance reserves.
Under the Draft Ordinance proposed, the Ordinance on the procedure and the methodology of forming the insurance and health insurance reserves (adopted by the Council of Ministers by Decree No. 13 dated January 24, 2003 and promulgated, SG, Issue No. 10 of February 4, 2003) shall be invalidated, where at the same time the Draft Ordinance aligns the requirements set to the technical reserves in compliance with the spirit and concept provided for under the Insurance Code, and namely:
 – part of the various approvals of parameters upon setting up the technical reserves are abolished;
 – specific limitations related to the setting up of and disposal with the reserve fund are amended,
 – the obligation to distribute at least 90 per cent of the income realized from investments into the accounts of the life-insured persons is abolished. The income’s distribution shall be based on the individual policies of the insurers and health insurance companies on a market principle.

The Draft Ordinance shall be published on the FSC’s website and shall be forwarded to the Association of Bulgarian Insurers and to the Association of Licensed Voluntary Health Insurance Companies and to the Bulgarian Actuarial Society in order to be co-ordinated.

4. The Commission adopted an Amendment Ordinance to Ordinance No. 3 dated September 24, 2003 on the terms and procedures for switching participation and transferring the amounts accrued in an insured person’s individual account from one supplementary pension fund to another fund of the same type, managed by another pension insurance company.
The amendments introduced into the Ordinance result from the Tax Insurance Procedure Code’s entry into force and the transfer of the functions on collecting and distributing the installments on additional compulsory pension insurance from the National Social Insurance Institute (NSSI) to the National Revenue Agency.
Under the Ordinance, the texts related to obligations of the NSSI on accepting the statements of switching participation from one obligatory pension fund to another respective fund and subsequent depositing of the insurance installments in connection with the participation amended, which are to be undertaken by the National Revenue Agency are amended.
The Ordinance is to be published in the State Gazette.

The FSC determined the installments’ amount deposited with the Guarantee Fund under Art. 287, Para. 2, Item 1 of the Insurance Code, as well as the time frame for their effecting:

1. The FSC fixed the amount of the installment for insurers offering the compulsory Third Party Liability Insurance of the Motorists in the Republic of Bulgaria under Art. 249, Item 1 of the Insurance Code at BGN 2.30 for each separate motor vehicle for the liability in connection with which a compulsory insurance has been concluded.
2. The FSC fixed the amount of the installment for insurers offering the compulsory Accident Insurance of the Passengers in the Republic of Bulgaria under Art. 249, Item 2 of the Insurance Code at BGN 0.20 for each seat without the seat of the driver for which a compulsory insurance has been concluded.
3. 3. The Commission specified the following timeframes for depositing the installments into an account with the Guarantee Fund:
а)   by April 30, 2006 – for insurances concluded from January 1, 2006 to March 31, 2006 (inc.)
b)   by July 31, 2006 – for insurances concluded from April 1, 2006 to June 30, 2006 (inc.)
c)   by 31.10.2006 – for insurances concluded from July 1, 2006 to September 30, 2006 (inc.)
d)   by 31.01.2007 – for insurances concluded from October 1, 2006 to December 31, 2006 (inc.)

4. Insurers shall deposit the total amount of the installment under Item 1 or Item 2 within the timeframes set under Item 3, notwithstanding any deferred payment of the premium, where such is provided for as per the insurance contract.

The FSC’s Resolution shall be published in the State Gazette.