The Financial Supervision Commission initiates proceedings for the issuance of a general administrative act – Decision for determining the amount of minimum percentages, according to Art. 91, para. 3, item 2 of Ordinance No. 53 of 23.12.2016 on the requirements for reporting, valuation of assets and liabilities and the formation of technical reserves of insurers, reinsurers and the Guarantee Fund (Ordinance No. 53), as well as the period for their application. The draft act can be found on the FSC website in the section “Public consultations” (available in BG version).
Communication in connection with an approved report on commercial real estate owned by SPVs securitizing real estate
Manner of submitting and explaining an approved report on commercial real estate owned by special purpose vehicles securitizing real estate on a quarterly and annual basis on an individual basis according to a template determined by the Deputy Chairperson of the FSC, head of the Investment Supervision Department.
In connection with an approved report on commercial real estate (CRE) owned by special purpose vehicles (SPVs) securitizing real estate, on a quarterly and annual basis on an individual basis in connection with the implementation of Recommendations C and D of the Recommendation of the European Systemic Risk Board of 21 March 2019 (ESRB / 2019/3) according to the template determined by the Deputy Chairperson of the FSC, Head of the Investment Supervision Department, to the financial statements and public notifications of SPVs it is necessary to take into account the following:
The information in column No. 1 of the report on CRE owned by the SPV is filled in by explicitly individualizing the respective property owned by the SPV (indicating location, type – land, building, etc.), and “owned by CRE 1, CRE2, etc. n.” is described for the purpose of sequentially listing the relevant CREs. Information on the CRE owned by the specialized company should be provided on a quarterly and annual basis, taking into account the requirement to report the type and location of the property by balances and flows specifying direct and indirect ownership of the CRE according to Form B “Indicators for financial system exposures”, respectively“ Exposure indicators” to Annex III “Indicative models for indicators for the commercial real estate sector “of the Recommendation. According to item 5 “Assessment of the exposures of the financial system to commercial real estate” of Annex V “Guidelines on definitions and indicators” of the Recommendation, investments may cover both direct ownership of CREs by SPVs, e.g. by virtue of the right of ownership over the CRE, as well as the indirect ownership of the CRE in the line of property which the SPV owns from the capital of a specialized company established or acquired by it, when these CREs are owned by this specialized company. The column “Book value of those received during the period in BGN thousand” indicates the value of the acquisition of CRE which was acquired after the beginning of the period.
It is necessary to indicate all CREs even if they do not generate rental income, respectively construction has not started, given the requirement for subsequent evaluation of CRE according to Art. 23 of the Law on Special Purpose Vehicles and Securitization Companies, respectively whether there is a change in the value of the property.
The report on the CREs held by a SPV should be disclosed together with the financial statements and notifications of the companies in the respective order.
The technical interest rate and biometric mortality tables to be applied by the PIC when calculating the pension reserves as of 31.12.2021 have been approved
Diana Yordanova, Deputy Chairperson of the FSC, Head of the Social Insurance Supervision Department, issued a decision approving the technical interest rate and biometric mortality tables to be applied in the calculation of pension reserves as of 31.12.2021 by the pension insurance companies who manage a supplementary voluntary pension insurance fund.
Decision No. 918 – ПОД of 20.12.2021 can be found in the section “Administrative documents”, and the annexes to it – in the section “Administrative documents”, “Forms and templates”, “Social Insurance activity”, 2021 (available only in BG version).
Update of the lists of insurers and insurance intermediaries who have stated their intention to carry out cross-border activity within the Internal Market of the European Union
For the period from 01.11.2021 to 30.11.2021 the FSC received notifications from the competent authorities of Member States regarding the intention of 80 (eighty) insurers and insurance intermediaries based in other EU Member States to operate (entry or termination of the notification) on the territory of the Republic of Bulgaria under the terms of the freedom to provide services, including notifications for extension of the scope of the performed activity or provision of information for the change of addresses, representatives and other circumstances.
Notifications have been received from the national competent authorities of the EU Member States regarding the intention of 5 (five) insurance companies based in their territory to operate on the territory of the Republic of Bulgaria under the terms of freedom to provide services; only 4 (four) companies are registered so far, because 1 (one) of the notifications is expected to provide additional information. As of the end of November 2021, the number of insurance companies based in other EU and EEA Member States which intend to operate in Bulgaria under the principle of freedom to provide services, increased to 418 (six hundred and eighteen).
For the period from 01.11.2021 to 30.11.2021 the FSC received notifications from the competent supervisory authorities of EU Member States regarding the intention of 17 (seventeen) insurance intermediaries based in EU Member States to carry out insurance intermediation activities on the territory of the Republic of Bulgaria under the terms of the freedom to provide services.
Notifications from competent authorities of the EU Member States regarding the intention to suspend the activity of insurance intermediation on the territory of the Republic of Bulgaria under the terms of freedom to provide services for the period 01.11.2021 – 30.11.2021 have been received for 46 (forty-six) insurance intermediaries. As a result, as of 30.11.2021, the number of insurance intermediaries based in EU Member States that have stated their intention to carry out cross-border insurance intermediation activities in Bulgaria decreased to 2,189 (two thousand one hundred and eighty-nine), while in October they were 2218.
For the period 01.11.2021 – 30.11.2021 the FSC has not sent notifications to the national competent authorities of the EU Member States regarding the intention or withdrawal of the intention of the insurance companies based in the territory of the Republic of Bulgaria to carry out cross-border activity.
As of the end of November 2021, the total number of local insurance companies which have stated their intention to carry out insurance activities on the territory of other Member States of the EU and the EEA under the terms of freedom to provide services remains 17 (seventeen).
During the period the FSC has sent 1 (one) notification to the competent authorities of EU Member State regarding the intention of an insurance broker based in the Republic of Bulgaria to carry out cross-border insurance intermediation in their territory under the terms of the freedom to provide services.
The total number of insurance intermediaries based in the Republic of Bulgaria which declared their intention to carry out insurance intermediation activities in the territory of EU Member States under the terms of freedom to provide services or the right of establishment, increased to 54 (fifty four) intermediaries.
The updated lists of notifications are available on the FSC website in the section “Supervised entities” – “Notifications”.
Communication in connection with ESMA’s public statement setting out European common enforcement priorities for 2021 annual financial statements
The European Securities and Markets Authority (ESMA) has published its annual Public Statement setting out European common enforcement priorities for the 2021 Annual Financial Statements of issuers whose securities are admitted to trading on a regulated market.
| Priorities related to IFRS financial statements Section 1 | Priorities related to non-financial statements Section 2 | Other considerations related to APMs* Section 3 | |
| Impact of the COVID-19 pandemic | ✓ | ✓ | ✓ |
| Climate-related matters | ✓ | ✓ | |
| Expected credit losses | ✓ | ||
| Taxonomy-related disclosures | ✓ |
* A Bulgarian translation of ESMA’s Guidelines on Alternative Performance Measures (APMs) can be found on the FSC website: www.fsc.bg, section Legislation / Guidelines and recommendations of the European Supervisory Authorities / ESMA.
Issuers and their auditors should take into account the main issues addressed in ESMA’s public statement when preparing and auditing the annual financial statements (AFSs) of issuers and public companies for 2021.
ESMA and national competent regulators will ensure compliance with the specific requirements set out above in the presentation of financial statements by public companies and issuers. Appropriate measures will be taken in case of significant discrepancies.
The statement is published on ESMA’s website and can be accessed here.
A translation into Bulgarian of the text of the public statement can be found on the FSC website www.fsc.bg, section European Affairs / EU News / Notices.
Approval of reports according to a template to the financial statements and to public notifications of public companies, other issuers of securities, financial vehicle corporations and persons under § 1e of the POSA
Pursuant to Art. 15, para. 1 item 9 of the Financial Supervision Commission Act, in connection with § 3 of the Transitional and Final Provisions of Ordinance No. 2 of 09.11.2021 for initial and subsequent disclosure of information in public offering of securities and admission of securities to trade on a regulated market (promulgated in the State Gazette, 97/19.11.2021, effective from 01.01.2022) the Deputy Chairperson of the FSC, head of the Investment Supervision Department, approved the templates of reports to the financial statements and notifications provided for in this ordinance.
A report on commercial real estate owned by special purpose investment companies securitizing real estate has been prepared on a quarterly and annual basis on an individual basis in connection with the implementation of Recommendations C and D of the European Systemic Risk Board Recommendation of 21 March 2019. (ESRB/2019/3) (https://www.esrb.europa.eu/pub/pdf/recommendations/esrb.recommendation190819_ESRB_2019-3~6690e1fbd3.bg.pdf), which the FSC should apply.
Results of the change in the participation and transfer of funds of insured persons from one to another respective pension fund for the third quarter and first nine months of 2021
The Social Insurance Supervision Department of the Financial Supervision Commission announced the results of the change of participation and transfer of funds of insured persons from one to another respective pension fund for the third quarter and first nine months of 2021. The data were obtained on the basis of reports submitted by pension insurance companies to the Financial Supervision Commission.
In the third quarter of 2021, a total of 88,381 applications for change of participation and transfer of funds from one pension fund to another were submitted to the pension insurance companies.
A total of 74,187 insured persons from the applications submitted in the third quarter of 2021 have changed their participation in the supplementary pension insurance funds. The total amount of the funds transferred to another pension fund of the respective type is BGN 301,297,085.
The insured persons who exercised their right to change their participation and transfer funds from the individual accounts in the first nine months of 2021 are a total of 221,534. The total amount of transferred funds since the beginning of the year is BGN 881,173,537.
Results of the change in the participation and transfer of funds from one to another respective pension fund for the third quarter and the first nine months of 2021 are available in section: Social Insurance activity / Statistics / Statistics and analysis / 2021.
# Invest safely – FSC campaign
Today, at a specially organized online event, the Financial Supervision Commission (FSC) presented its digital campaign – #invest safely. With it, the Commission builds on the measures already taken so far to warn of fraudulent investment schemes by unlicensed firms, taking a step forward and using the online space to provide basic guidance on how consumers can distinguish legitimate and fraudulent firms.
The participants in the event exclusively got acquainted with the individually developed website of the campaign – https://investsafely.fsc.bg/, presented by the FSC team represented by Ms. Denitsa Kirova – Secretary General of the Financial Supervision Commission, Ms. Neda Muzho – Head of the Department for Supervision of Public Companies, Issuers of Securities and Special Purpose Vehicles and Ms. Anka Kostova – Director of Public Relations and Protocol.
#invest safely starts with a standalone site that combines video and text, news and alerts to users, there is direct access to the list of licensed firms, allows users to identify legitimate investment schemes, but also to identify the signs indicating irregularities.
#invest safely is also deployed on the digital channels YouTube and LinkedIn, and the attractive visual content created by the Commission team will reach a large number of online users and draw their attention to the questions they need to ask themselves or to the situations which might happen to them, taking the step of becoming investors.
The Secretary General of the FSC, Ms. Denitsa Kirova, said that the campaign is implemented not only to educate consumers, but also to meet the expectations of both capital market participants and end users. “We believe that digital finance will continue to evolve and become a standard consumer behaviour. Against the background of the constantly offered innovative opportunities, we should not ignore the risks they carry. That is why the Financial Supervision Commission, as a regulator, must find a balance between guaranteeing the rights of consumers of non-banking products and services and ensuring a good and stable environment for business development,” she added.
Ms. Neda Muzho – Head of the Department for Supervision of Public Companies, Issuers of Securities and Special Purpose Vehicles told about the ideas for creating the video content, each situation in them is the result of direct cases and discoveries of the Commission team.
The #invest safely campaign, Ms. Muzho said, <> “takes us to a new territory, one where fraudsters are actually present, which is why we are expanding our arsenal of measures and actions in the digital field, because we want to give consumers the opportunity to protect themselves, but also to maintain confidence in the investment market and offer a new sustainable future for the savings of our citizens.”
The last year, marked by the Covid-19 pandemic, has given a strong impetus to the digital transformation of the non-banking financial sector. In response, the FSC is using entirely new approaches through additional communication channels to meet the new challenges of its goal of financially literate consumers of financial services. The Secretary General of the Commission, Ms. Denitsa Kirova shared that “with the digital campaign #invest safely, the Financial Supervision Commission shows that it is actively and consistently working to constantly upgrade its communication policy, protect the interests and consumer confidence in non-banking financial services, and hence in the better positioning of Bulgaria on the “investment map of Europe”.
The #invest safely campaign is now live in:
https://investsafely.fsc.bg/invest-safely/ (English version)
Communication on the issuance of a general administrative act determining the amount of contributions to the funds managed by the Guarantee Fund for 2022
At today’s meeting, 07.12.2021, t the proposal of the Guarantee Fund Council, the FSC made a decision to determine the contribution of insurers offering in the Republic of Bulgaria compulsory motor third party liability insurance to the Uninsured Vehicle Fund in the Guarantee Fund remains at BGN 50 for each insured motor vehicle. At the same time, the FSC determined the amount of the contribution of the insurers who offer in the Republic of Bulgaria compulsory Accident insurance for the passengers in public transport under Art. 461, item 2 of the IC at BGN 15 for each seat, excluding the driver’s seat in the vehicles.
The Guarantee Fund manages two funds – the Uninsured Vehicle Fund and the Security Fund. The Uninsured Vehicle Fund pays compensation in case of damage from an unidentified motor vehicle or, if the driver is without Motor Third Party Liability Insurance, and the Insurance Fund pays claims to persons with an insolvent insurer.
Until now, the contribution to the Uninsured Vehicle Fund was BGN 10.50 for each insured motor vehicle under Motor Third Party Liability and BGN 0.15 for each seat in a public transport vehicle for Public Accident Insurance for Passengers in Public Transport. The contribution to the Security Fund was BGN 2.50 for each vehicle insured for Motor Third Party Liability.
At the proposal of the Guarantee Fund Council, the contribution of insurers offering in the Republic of Bulgaria compulsory motor third party liability insurance to the Fund for Uninsured Motor Vehicles in the Guarantee Fund remains at BGN 10.50 for each insured motor vehicle. The amount of the contribution of the insurers who offer in the Republic of Bulgaria compulsory Accident insurance for the passengers in public transport under Art. 461, item 2 of the IC also does not change and remains BGN 0.15 for each seat, excluding the driver’s seat in the vehicles.
The contribution to the Security Fund also remains BGN 2.50 for each insured vehicle under the Motor Third Party Liability.
The total contribution to the GF of each insured motor vehicle under the Motor Third Party Liability remains BGN 13.00, which is distributed in the two funds in question.
The forthcoming issuance of the FSC decision was announced on 02.11.2021 by publishing the draft decision on the FSC website, and separate messages were sent to the representative associations of insurers, insurers who are not members of representative organizations, the Guarantee Fund and the National Bureau of Bulgarian Motor Insurers. All parties concerned were given a period of one month, which expired on 02.12.2021, to submit written proposals and objections to the draft decision. No proposals and objections were received by the FSC within this period and no other evidence was provided.
The decision made today is enforceable from the moment of its announcement.
Announcement of results from the professional qualification examination for insurance brokers held on 27.11.2021
On 27.11.2021 an examination was held for acquiring professional qualification of insurance brokers and for recognition of qualification acquired in a Member State under Ordinance No. 28 of 10.05.2006 of the FSC on the terms and procedure for conducting an examination for the professional qualification of insurance brokers and for the recognition of a qualification acquired in a Member State and for the registration of vocational training materials. (Ordinance No. 28 of 10.05.2006).
The admitted 7 (seven) candidates took the exam, and 3 (three) of them successfully passed.
Pursuant to Art. 10, para. 2 of Ordinance No. 28 of 10.05.2006, the Financial Supervision Commission announces the results of the examination for professional qualification of insurance brokers, held on 27.11.2021, as follows:
List of candidates who have passed the examination:
Reference number Name Score
РГ-14-159-1/15.10.2021 Ivan Vasilev Todorov 94 p.
РГ-14-165-1/04.11.2021 Nikoleta Stoyanova Moldovanska-Aleksieva 86 p.
РГ-14-163-1/01.11.2021 Mihail Dimitrov Daskalov 82 p.
List of candidates who have not passed the examination:
Reference number
Score
РГ-14-160-1/19.10.2021 68 p.
РГ-14-161-1/20.10.2021 66 p.
РГ-14-162-1/01.11.2021 62 p.
РГ-14-164-1/02.11.2021 56 p.
Certificates signed by the Chairman of the Financial Supervision Commission will be issued to the persons who have successfully passed the professional qualification examination.