Mrs Ralitsa Again- Deputy Chairwoman For FSC, Head Of The Insurance Supervision Department
Mrs Again, our country is an EU member already. What are your expectations about the development of the insurance market?
Insurance is one of the most dynamically developing
sectors in our country, so I expect it to keep its good development pace during the next few years as well. As far as life insurance is especially concerned there is definite and stable growth
boosted by the higher incomes and insurance awareness of the people. The range of the MTPL insurance was well increased last year, but it did not favour a rise in the premium. We expect that there
will be a premium rise and as the number of vehicles is to remain the same there will a stable development of the vehicle insurance activities. As far as the other insurance products are concerned,
our EU membership allows the foreign companies to enter our market and the Bulgarian customers now have greater choice.
Bulgaria is an EU member but it is still a small insurance market with few possibilities. How do you explain the great interest on behalf of the foreign insurance companies and
brokers?
The great number of the submitted applications for selling insurance in Bulgaria (are more than 40) is in view with the desire of foreign EU insurance companies to sell their products to the
Bulgarian citizens. Most of these companies do not expect to be operational on our market, but if the Bulgarian customers want to buy their products they will here to meet their need. That is what
we expect, judging from what happened in the 10 countries which joined the union before we did. There were numerous applications during the first few months but, eventually, the local insurers kept
their market shares.
Do you think that Bulgarian companies will enter the European market?
That is what we hope. As you know there is one company- Euro Ins- willing to go on foreign markets. we expect other companies to have the same will.
What are your expectations- will there be new companies, will some companies be acquired, will there be any bankruptcies?
The Bulgarian insurance market changed a lot during the last two years, most major shareholders of the Bulgarian insurance business are foreign groups. That is why the structure of the market
underwent certain changes so did the manner of servicing. The commercial practices were enhanced and the customer requirements were raised as well. It is highly probable that the interest of
obtaining shares of the insurance business will remain as great, since it is developing fast under the conditions of economic stability.
The Financial Supervision Commission admonished the dumping and unfair competition in the end of last year. What measures do you intend to take in order to prevent the
malpractice?
We launched a procedure of forced administrative measures so the insurance companies raised the prices so the compensation payments were guaranteed. Therefore the insurance companies raised the
prices even before these measures were introduced and the premium level came to adequate.
Are the compensation practices of the insurance companies approved?
The regulations of clearing- off practices are not subjected to approval. Last summer, when the FSC presented its requirements we acquainted all insurance companies with them by sending them to all
those companies which had not given a clear account of the way they were to make compensations. All companies have published the regulations on their web pages so the insured have free access and
can read them.
What will happen with the catastrophe pool in Bulgaria?
An inter- department team joined the Council of Ministers, but there is no information if it has prepared anything yet. FSC can be an assistant, in this case, since the resolution of this very
problem is a political one and is financed by the budget. When there is a decision, the Commission will be there to assist the project.
All experts expect that the life insurance is to develop its great potential. What are your expectations?
There is no doubt that the life insurance market s to develop quite dynamically. Similar is the development tendency of the voluntary health insurance whose activities are very humble, due mainly
to the organisation of the state health care system.
What lies ahead for the insurance sector?
First of all the Bulgarian insurers and insurance agents are challenged to take advantage of their right to sell their products and freely establish bodies in the other EU countries. Foreign
companies are to enter our market, on the other hand, but it is hard to tell what kind of activity they will achieve. In accordance with the international rules FSC is to receive information about
the number of policies sold when the financial year is concluded.
What is expected as far as legislation is concerned?
This year an amendment of the Insurance Codex is to be prepared and carried so the Reinsurance Directive be applied. Some
texts will be processed in order to be more precise and unified with the established parctice.
