On October 3, 2005, the Financial Supervision Commission passed a resolution on divestiture of the licence issued to Hildon AD Insurance Company (formerly Jupiter AD Insurance Company) to perform insurance activity.

The following grounds for the divestiture of the aforesaid licence to perform insurance activity have been established:

Upon an on-site inspection undertaken and while carrying out current supervision, it has been ascertained that the company is in bad financial standing and it may not duly perform its obligations under insurance contracts.

Numerous breaches have been established, such as considerable understatement of the insurance reserves with at least BGN 909 thousand, considerable shortage of assets needed to cover the reserves with at least 95.2 per cent, fictitious considerable enhancement of the company’s financial result resulting from incorrect accountability with at least BGN 3,519 thousand. The company has been submitting erroneous financial information to the supervisory institution, where by so doing the said company has obstructed the establishment of its actual financial standing.

Unjustified non-payment, delayed payment and partial payment of exigible and liquid liabilities under insurance contracts have been ascertained.
It has also been established that the company does not pay or delays payments on liabilities under insurance contracts incontestably established through the court (13 execution actions to a total amount exceeding BGN 200 thousand).

Upon an inspection undertaken at the company and at the judicial executive office, it has been ascertained that the said insurer has not been implementing the coercive administrative measure imposed by the FSC in 2004, under which the above insurer was obligated to remove the infringements established in its activities with regard to liquidation of damages and to undertake the necessary measures for the prompt payment of all amounts due under insurance contracts.

The breaches established are substantial and numerous, and each one of these alone is a legal basis for licence divestiture.

With its actions, the company has injured social relations of considerable importance with regard to the insured persons, the stability, the transparency of and trust in the insurance market. As of the present moment, the measures undertaken by the supervisory authority have not led to a positive change in the irregular practices established in the insurer’s activity.

With a view to protecting the interests of the insured persons and maintaining the insurance market’s stability, the FSC has imposed the only adequate measure – divestiture of the licence issued to Hildon AD Insurance Company to perform insurance activity.

In order to perform direct supervision over the insurer’s activities during the period prior to the appointment of a liquidator or an assignee in bankruptcy, the Financial Supervision Commission has appointed a quaestor.

 

 

OECD assessed highly the supplementary pension insurance in Bulgaria and supports the future measures for its improvement

There are prepared private pensions amendments whose primary objective is increasing old-age income and guaranteeing adequate pension benefits

In 2024 the Insurance and Private Pensions Committee of the Organization for Economic Co-operation and Development (OECD) carried out a research mission in Sofia which reviewed the supplementary pension insurance and assessed the compliance of the Bulgarian legislation and the supervisory activity with the OECD recommendations on the key principles for private pensions regulation.

As a result of the good partnership between the co-chairs – the Ministry of Finance and the Financial Supervision Commission (FSC), as well as the efforts of the Ministry of Labour and Social Policy, the representatives of other institutions, social partners and the industry, the review of the private pensions has already been successfully completed.

The Chair of the Working party on Private Pensions at the Insurance and Private Pensions Committee of the Organization for Economic Co-operation and Development (OECD) acknowledges the strengths of the supplementary pension insurance, including:

  • the multi-pillar pension model;
  • the stable legal framework;
  • the competent risk-based supervision.

The ability of the country to implement the OECD legal instruments and the excellent cooperation with the Bulgarian authorities during the review have been highly valued.

In this regard the OECD also notes the possibility for considering certain aspects that could contribute to improving the pension system that are in line with the philosophy of the possibilities for legislative amendments such as:

  • introduction of consumer choice between different investment strategies according to their life-cycle and risk tolerance (the so-called “multifunds model” encompassing funds with different investment profile);
  • review of the rules determining the investment opportunities to achieve growing profitability.

For this purpose, the competent institutions in the country should state clearly and in sync their commitment to the development of legislative amendments, the philosophy of which is supported in the context of the recommendations given by the OECD.

Joining the Organization for Economic Co-operation and Development is a key priority for the Republic of Bulgaria, in view of which the Financial Supervision Commission confirms its readiness and commitment to participate in the development of the pension system in the country in order to guarantee trust, fairness, stability and transparency.

The Financial Supervision Commission and the Bulgarian Association of Supplementary Pension Security Companies have started a dialogue and are ready to propose changes to the regulatory framework in the field of supplementary pension insurance, the ultimate goal of which is to increase the profitability of the management of the funds on the individual accounts of the citizens, respectively achieving an adequate replacement income upon withdrawal from the labor market (retirement).

Notification of the license withdrawal of BINTERNATIONAL UNION INSURANCES S.A.

The Financial Supervision Commission (FSC) notifies all concerned parties that on 22 July 2013 the competent authority of Greece (Bank of Greece) has informed about the approval of the authorization withdrawal and the opening of winding-up proceedings of the following undertaking BINTERNATIONAL UNION INSURANCES S.A.

FSC has not been notified on the intention of the aforementioned insurance undertaking to operate on the territory of Bulgaria under the right of establishment or the freedom to provide services.

Notification of the intention of MetLife Limited to transfer all of its insurance business to MetLife Europe Limited

The Financial Supervision Commission (FSC) notifies all concerned parties that on 15 August 2013 the competent authority of the United Kingdom (Prudential Regulation Authority) has informed about the intention of MetLife Limited (transferring insurer) to transfer all of its insurance business to MetLife Europe Limited (transferee).

FSC has not been notified on the intention of the transferee to operate on the territory of  the Republic of Bulgaria under the right of establishment or the freedom to provide services.

Notification of the intention of HSBC Life (Europe) Limited to transfer its life assurance portfolio to HSBC Life Assurance (Malta) Limited

The Financial Supervision Commission (FSC) notifies all concerned parties that on 22 August 2013 the competent authority of the Ireland (Central Bank of Ireland) has informed about а proposed transfer of life assurance portfolio from HSBC Life (Europe) Limited (transferring insurer) to HSBC Life Assurance (Malta) Limited (transferee).

FSC has not been notified on the intention of the transferee company to operate on the territory of the Republic of Bulgaria under the right of establishment or the freedom to provide services.

Notice of issued general administrative act

A general administrative act was issued – Decision No. 124 of 14.02.2022 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 decision is available on the FSC website in the section Administrative Documents (available in BG version).

Notice of issued general administrative act

A general administrative act was issued – Decision No. 107-ОЗ of 02.03.2021 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 decision is available on the FSC website in the section Administrative Documents, Decisions, 2021, March.

Notice of initiating proceedings for the issuance of a general administrative act

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).

Notice of initiating proceedings for the issuance of a general administrative act

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).

The proceedings for the issuance of a general administrative act, opened on 06.01.2021 – Decision for determining the amount of minimum percentages, according to Art. 91, para. 3, item 2 of Ordinance No. 53, have been closed. 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).

The proceedings for the issuance of a general administrative act, opened on 06.01.2021 – Decision for determining the amount of minimum percentages, according to Art. 91, para. 3, item 2 of Ordinance No. 53, have been closed.

Notice of initiating proceedings for the issuance of a general administrative act

At today’s meeting of 02.11.2021, the FSC decided to initiate proceedings for the issuance of a general administrative act – Decision to determine the amount of contributions to the Guarantee Fund under Art. 554, item 1 of the IC in the Uninsured Vehicle Fund and the contribution under Art. 563, para. 2, item 3 of the IC in the Security Fund in 2022, as well as the deadlines for their implementation.

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.

At present, the contribution to the Uninsured Vehicle Fund is 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 is 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.

Pursuant to Art. 66, para. 1 of the APC, the opening of the proceedings for issuing the general administrative act shall be announced publicly by publishing the draft act on the FSC website in the section “Public consultations”.

Pursuant to Art. 69, para. 1, item 1 of the APC, the form for participation of the interested parties in the procedure for issuing the act is “Written proposals and objections”.

Pursuant to Art. 69, para. 2 of the APC, the term for submitting the written proposals and objections is one month from the date of publication of the announcement for initiating the procedure for issuing the administrative act on the FSC website and expires on 02.12.2021 inclusive.