Parliament on Wednesday backed first-reading amendments to the Insurance Code allowing the Financial Supervision Commission (FSC) to act on its own initiative when funds managed by the Guarantee Fund face a shortfall.
The bill was tabled by Daniel Parushev of Progressive Bulgaria and a group of MPs. It was backed by 135 MPs from Progressive Bulgaria, the Movement for Rights and Freedoms (MRF) and two MPs from Continue the Change. Eight Vazrazhdane MPs voted against and 19 MPs from GERB-UDF and Continue the Change abstained. Democratic Bulgaria did not take part in the vote.
According to the sponsors, the changes would allow a faster response when additional financing is needed.
The bill distinguishes between insurers’ advance annual contributions and additional contributions and clarifies the basis for calculating advance payments. It also allows the FSC to set different deadlines for reimbursing advance contributions depending on the financial position and liquidity needs of the respective fund.
The bill would also allow the Guarantee Fund, through its Security Fund, to make payments on behalf of the National Bureau of Bulgarian Motor Insurers in connection with liabilities of an insurer whose licence has been withdrawn. These would include compensation, interest, claim-settlement costs and processing fees. The aim is to avoid requiring the Bureau to provide the funds in advance and subsequently seek reimbursement. Payments would have to be made within seven days.
The Guarantee Fund would also be allowed to conclude individual agreements with national bureaux and compensation bodies in other EU Member States, with the National Bureau of Bulgarian Motor Insurers also able to participate. The provision concerns cases in which a Bulgarian insurer whose licence has been withdrawn had operated in other Member States.
Democratic Bulgaria MP Bozhidar Bozhanov said that these measures are not sufficient, because when additional money is collected to cover the hole left by an insurance company, there is a risk that consumers will bear the cost and Motor Third Party Liability insurance premiums will rise. He said measures were needed to ensure that the FSC could recover a substantial part of the assets of an insolvent insurer and limit the risk of assets being siphoned off or concealed.
Vazrazhdane MP Boris Aladzhov said the bill opened the way for additional borrowing. He questioned whether the liabilities of an insurer that had failed to provide sufficient funds should be transferred to its competitors. Commenting on the FSC’s proposed power to act on its own initiative to cover fund shortfalls, Aladzhov said the issue was whether supervision had been effective enough to prevent risks from accumulating and whether the changes could lead to higher Motor Third Party Liability insurance premiums.
Parliament Backs Changes Allowing Financial Regulator to Cover Guarantee Fund Shortfalls 2026 THE NEWS FROM BULGARIA – NEWS AGENCY 2009-2025 2026-09-23 13:39:06
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BULGARIA NEWS – NEWS AGENCY 2009–2026 2026-09-23 13:39:06