Insurance laws Bulgaria
In Bulgaria, the insurance sector is regulated by the Insurance Code (Закон за застраховането), which was updated in 2016 to align with the European Union's Solvency II Directive. This code, along with other related legislation, governs the formation, operation, and termination of insurance companies and outlines the relationship between insurers and policyholders.
Key Aspects of Bulgarian Insurance Law
Regulatory Body: The Financial Supervision Commission (FSC) (Комисия за финансов надзор) is the independent governmental body responsible for the regulation and supervision of the non-banking financial sector, including the insurance market. The FSC grants licenses, monitors the financial stability of insurers, and protects the interests of consumers.
Contractual Principles: Insurance contracts in Bulgaria must be in writing. The Insurance Code defines an insurance contract as an agreement where the insurer undertakes to cover a certain risk in exchange for a premium. If the insured event occurs, the insurer must pay the policyholder or beneficiary an indemnity or a sum of money. The contract is considered bilateral, consensual, and formal.
Consumer Protection: The law places a strong emphasis on consumer protection. Insurers are required to provide clear and comprehensive information to potential policyholders before a contract is signed. The law also distinguishes between intentional and unintentional misrepresentation by the insured. Deliberate misrepresentation or non-disclosure can lead to the insurer being released from its obligation to pay.
Types of Insurance: The law distinguishes between life and non-life insurance. Insurers are generally not allowed to provide both types of insurance, with a few exceptions such as accident and illness insurance.
Mandatory Insurance in Bulgaria
Several types of insurance are compulsory by law in Bulgaria:
Motor Third-Party Liability Insurance: This is a legal requirement for all motor vehicles registered and used on public roads. It covers damages or injuries caused to other people or their property in a road accident.
Accident Insurance for Passengers: This is compulsory for passengers in public transport vehicles. It provides coverage for personal injury or death while traveling.
Health Insurance: All Bulgarian citizens and permanent residents are required to be covered by the National Health Insurance Fund (NHIF). This public system covers a range of medical services. Certain categories of foreigners, such as long-term residents and students, are also required to have health insurance.
Professional Liability Insurance: Specific professions, such as lawyers and notaries, are required to carry professional liability insurance to protect clients from potential financial losses resulting from professional negligence.
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