Dynamic Processes Accompany Insurance Sector Development.

(From PARI Daily)

Byline: Gergana IVANOVA

DYNAMIC and somewhat unexpected processes have accompanied the rapid development of the insurance sector in Bulgaria in 2004. The branch started the year without a supervisor; the traditional amendments to the Insurance Act were on the agenda again; the drafting of the Insurance Code began; and sequestrators were appointed in two companies. A new player appeared on the market.

Insurance companies will finally pay profit tax from next year.

The head of the insurance supervision division of the Financial Supervision Commission (FSC), Rumen Galabinov, submitted his resignation on September 10, 2003 but it was not before October 20, 2004 that the parliament accepted it. Although many nominations have been discussed, no replacement has been appointed yet.

In July, the FSC appointed sequestrators at Europa and Bulgarian Mutual Insurance Cooperative. The measure followed established breaches of the Insurance Act. This is one of the most serious sanctions imposed by the supervisor. The sequestrators were appointed for a six-month term to take measures to rehabilitate the companies and protect the interests of the insured persons. In the middle of November the sequestrator of Europa, Sofroni Atanassov, said the rehab programme was ready and presented to the FSC.

DSK-Guarancia life insurance company, which was licensed in June, officially started operations on September 1, 2004. The company was registered with a BGN 2 million capital and shareholders including DSK Bank (26%) and OTP-Guarancia Insurance Company Ltd. of the OTP Group (74%). The company announced plans to apply for a general insurance licence as well.