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.

1. The FSC confirmed a prospectus for secondary public offering of shares issued by Euro Ins Insurance Company JSC, Sofia City. The issue is to the amount of BGN 5,000,000, distributed into 5,000,000 pieces of ordinary shares, having a nominal value of BGN 1 each, and representing the company’s authorized capital registered with the court.

2. The FSC approved two specimens of Application for Issuance of a Licence to Perform Activities and Provide Services under Art. 54, Paras. 2 and 3 of the POSA, and namely: Application for Issuance of a Licence to Perform Activities and Provide Services under Art. 54, Paras. 2 and 3 of the POSA as an investment intermediary; and Application for Issuance of a Licence to Perform Activities and Provide Services under Art. 54, Paras. 2 and 3 of the POSA within the territory of Bulgaria through a branch of a foreign legal entity.
The above specimens shall be published on the FSC’s website under the Documents Section, Documents’ Forms and Specimens.

3. The FSC approved two specimens of Application for Approval of Actions under Art. 74а, Para. 1, Item 1 of the POSA, and namely: Application for Issuance of an Approval to Effect Transformation of the Company of an Investment Intermediary under Art. 74а, Para.1, Item 1 of the POSA; and Application for Issuance of an Approval to Effect Transformation of a Management Company under Art.210, Para.5 in connection with Art. 74а, Para. 1, Item 1 of the POSA.
The above specimens shall be published on the FSC’s website under the Documents Section, Documents’ Forms and Specimens.

4. The FSC registered as professional investors Rumen Pelovski, Lilia Tsvetkova, Plamen Valchev.

5. The FSC recognized the qualifications acquired by Georgi Ivanov Milev to perform activity as an investment consultant.

6. The FSC adopted a Programme for Normative Activity of the FSC for the period January 1 – June 30, 2006.

7. The FSC refused to issue a licence to perform activity as a special purpose vehicle to Transinvestment REIT.

1. The Commission supplemented the licence issued to Capital Markets AD with the right to effect transactions in securities for a third party account as an investment intermediary abroad, and intermediation for entering into such transactions, to render individual portfolio management services and to perform custodian activity.

2. The FSC issued a licence to ERG Capital-2 REIT to perform activity as a special purpose vehicle: investment in funds raised through issuance of securities, in real estates. The Commission approved a prospectus for public offering of 1,150,000 pieces of ordinary shares having a par value of BGN 1 each. The issue of shares has been issued by the company as a result of initial increase of its capital, in compliance with a resolution of the General Meeting of the Shareholders dated May 25, 2005.
Promoters of the company are the Bulgarian-American Investment Fund, holding 70% of the capital, and 29 individuals.

3. The Commission issued a permit to Standard Asset Management AD Management Company to organise and manage the following contractual fund: Standard Investment High-Yield Fund. The FSC approved the prospectus for public offering of the Fund’s units and entered the issue of units into the FSC’s Public Registry.
The main purpose of the Fund’s investment policy is increasing the investments’ value through making a profit while undertaking from moderate to high risk. The Fund’s investment strategy shall be directed toward making capital profits from securities, proceeds from dividends/income from unit securities, and current income from debt securities.
The main groups of securities subject to investment, and the maximum limits of an investment shall be as follows:
– Shares issued by Bulgarian issuers and traded on a regulated market – up to 90%; shares issued by foreign issuers and traded on an internationally recognized regulated markets – up to 70%; shares of investment companies and units of other contractual funds – up to 30%; demand bank deposits and deposits having a maturity of up to 12 months – up to 50%; debt securities issued or guaranteed by the Bulgarian government or by the Bulgarian National Bank; qualified foreign debt securities – up to 90%; mortgage bonds and other debt securities issued by Bulgarian banks, as well as qualified debt securities issued by foreign banks – up to 50%; liquid assets – up to 10%.

4. The Commission issued a permit to Standard Asset Management AD Management Company to organise and manage the following contractual fund: Standard Investment Balanced Fund. The FSC approved the prospectus for public offering of the Fund’s units and entered the issue of units into the FSC’s Public Registry.
The main purpose of the Fund’s investment policy is increasing the investments’ value through making a profit while undertaking moderate risk. The Fund’s investment strategy shall be directed toward making capital profits from securities, proceeds from dividends/income from unit securities, and current income from debt securities.
The main groups of securities subject to investment, and the maximum limits of an investment shall be as follows:
– Shares issued by Bulgarian issuers and traded on a regulated market – up to 90%; shares issued by foreign issuers and traded on an internationally recognized regulated markets – up to 70%; shares of investment companies and units of other contractual funds – up to 30%; demand bank deposits and deposits having a maturity of up to 12 months – up to 50%; debt securities issued or guaranteed by the Bulgarian government or by the Bulgarian National Bank; qualified foreign debt securities – up to 90%; mortgage bonds and other debt securities issued by Bulgarian banks, as well as qualified debt securities issued by foreign banks – up to 50%; liquid assets – up to 10%.

5. The Commission approved the issuance of a licence to perform activity as a management company to Yug Market Fund Management AD, Plovdiv. The company is to prove within a 14-day time period that the capital exigible in compliance with Art.203, Para.1 of the POSA has been deposited.
Promoters of the company are the Television and Radio Services AD, Sofia, holding 91% of the votes in the General Meeting of the Shareholders, and Yug Market AD, Plovdiv, holding 9% of the votes in the General Meeting of the Shareholders.
 
6. The FSC entered into the FSC’s Public Registry a subsequent issue of securities issued by Elana Agricultural Land Fund REIT resulting from increase in the company’s capital from BGN 2,496,068 to BGN 19,931,843 through issuance of new 17,435,775 pieces of shares having a par value of BGN 1, and an issue price of BGN 1.20 each.

7. The Commission adopted a practice on the implementation of Art. 178, Para. 8 of the Social Insurance Code.
The said practice was adopted for the purpose of prevention of violations of the investment restriction under the above-cited regulation, in the cases of gaining rights within the meaning of § 1, Item 3 of the Public Offering of Securities Act (POSA) by a supplementary pension insurance fund.

8. The Commission recognized the qualifications attained to perform activities as an investment advisor of Vera Georgieva Sotirova.
 
9. The Commission issued an actuarial licence of pension insurance companies and of the supplementary pension insurance fund managed by these to Yanitsa Yaneva.

 1. The Commission issued a licence to Intercapital Property Development SPV, Sofia City, to perform the following activities in its capacity of a special purpose vehicle: investment of monies raised through issuance of securities into real estate /real estate securitization/.
The Commission approved a prospectus for public offering of 750,000 pieces of ordinary, registered, dematerialized, freely-transferable voting shares, having a nominal value of BGN 1 each, issued by Intercapital Property Development SPV as a result of the company’s initial capital raise.
The Commission entered the abovementioned issue of shares /undergoing an issuance process/ into the Public Companies’ Registry.

 2. The Commission approved amendments to the Articles of Association of Park SPV, adopted by a resolution of the company’s general meeting of shareholders held on October 18, 2005.

3. The Commission adopted amendments to the Financial Supervision Commission’s Instructions with Regard to Submission of the Necessary Documentation on Issuance of Approvals, Permits, Confirmations and Periodic Disclosure of Information.

The reports for the third quarter of year 2005 submitted by the insurance companies have been summarised by the Insurance Supervision Division at the Financial Supervision Commission. The premium income on general insurance amounted to BGN 647,940 thousand, which is a growth of 32.91 % in comparison to the third quarter of year 2004, and the indemnities paid amounted to BGN 224,183 thousand.
In the sphere of life insurance, the premium income was BGN 93,425 thousand – a growth of 51.44 % in comparison to the same period of the last year, and amounts and indemnities were paid amounting to BGN 24,740 thousand.
The Insurance Market’s statistics for the third quarter of year 2005  has been published on the FSC’s website – www.fsc.bg, Statistics Section.

  1. The Commission approved a tender offer submitted by Energoremont Holding JSC, Sofia City, for the purchase of shares of Energoremont Russe AD, Russe, from the company’s other shareholders through First Financial Brokerage House Ltd. Investment Intermediary. The price offered per one share is BGN 15.68.

 2. The Commission approved a request submitted by Dealing Financial Company AD, under which request the Investment Intermediary surrenders the right to undertake transactions in securities for its own account and underwriting of issues.

1. The Commission approved a tender offer submitted by Radino AD, Sofia City, for the purchase of shares of Krameks JSC, Sofia City, from the company’s other shareholders through Financial House Ever Inc. Investment Intermediary, Sofia City. The price offered per one share is BGN 11.42.

2. The Commission issued a licence to Elana Fund Management Inc. Management Company to organise and manage Elana Balanced Eurofund Contractual Fund. The Commission approved a prospectus for public offering of the Fund’s units. The Fund and the unit issue have been entered into the FSC’s Public Registry.

3. The Commission issued an actuarial licence of pension assurance companies and of the supplementary pension insurance funds managed by these to Albena Mladenova Petrova.

1. The Commission confirmed a prospectus for secondary public offering of an issue of naked corporate debentures, issued by UBB AD, Sofia City. The issue is to the amount of BGN 80,000,000, distributed into 80,000 pieces of debentures, having a nominal value of BGN 1,000 each, a 36-month maturity, maturity date: July 15, 2008, annual interest rate to the amount of 3.55%, and interest payments every six months.

2. The Commission imposed a temporary prohibition on a tender offer submitted by Energoremont Holding JSC for the purchase of shares of Energoremont Russe AD from the company’s other shareholders through First Financial Brokerage House Ltd. Investment Intermediary.

1. The Commission entered Advance Terrafund REIT as a public company. The Commission also entered an issue of the company’s shares for the purpose of trading these on a regulated market. The said issue amounts to 150,000 pieces of shares, having a nominal value of BGN 1 each. The issue’s initial public offering has been successfully completed.

2. The Commission issued a licence to BenchMark Asset Management AD Management Company to organise and manage a BenchMark Fund – 1 Contractual Fund. The Commission approved a prospectus for public offering of the Fund’s units. The Fund and the unit issue have been entered into the FSC’s Public Registry. The Contractual Fund is of the conservative type. Each unit’s nominal value is BGN 100.

3. The Commission issued a licence to DSK Asset Management Management Company to organise and manage a DSK Balanced Fund Contractual Fund. The Commission approved a prospectus for public offering of the Fund’s units. The Fund and the unit issue have been entered into the FSC’s Public Registry. Each unit’s nominal value is BGN 100.

4. The Commission imposed a final prohibition on a tender offer submitted by Bul-Vin EOOD, Petrich, for the purchase of shares of BRAVO JSCo, Kolarovo Village, from the company’s other shareholders through Zagora Finacorp JSCo Investment Intermediary, Stara Zagora.

5. The Commission passed Ordinance on Amendments to Ordinance No. 11 on authorizations to carry out activity as Stock Exchange, organiser of unofficial securities market, investment intermediary, investment company, management company and special investment purpose company. The publication of the said Ordinance in the State Gazette is forthcoming.
Under the above Ordinance, it is provided for amendments to the Ordinance valid until now with a view to its alignment with the amendments to the POSA (SG, Issue 39 of May 10, 2005). The term ‘permit’ has been substituted by ‘licence’. The requirements with regard to the documentation required for issuance of a licence to organise and manage a contractual fund; for issuance of an approval to amend the contractual fund’s rules and regulations, and/or the portfolio evaluation rules, and fixing the contractual fund’s assets’ net value, and for issuance of an approval to amend the depository services contract are established. Upon issuance of a licence to an investment intermediary and to a management company, the requirement to submit a document for initiation fee deposited with the Investors in Securities Compensation Fund, and a bank document certifying that each person of those subscribed units or shares has deposited the full amount of the installments due is introduced. A requirement is introduced with reference to the investment intermediaries to submit an activity plan and rules and regulations regarding the private transactions in securities of the members of the management and supervisory bodies of the investment intermediary, the investment intermediary’s employees, and the persons related to these. Similar requirement is also introduced with reference to the management companies.