May 19, 2010

The National Assembly adopted May 19th 2010, on second reading, amendments to the Insurance Code. They stipulate an increase of the minimum guarantee fund for insurance companies. The guarantee fund shall constitute one third of the solvency margin, but can not be less than BGN 4 600 000 - for an insurer licensed to cover the types of insurances under Section II, letter "A", 1-9 and 16-18 of the Insurance Code’s Annex No. 1.

The amendments increase the required minimum capital for insurers, licensed to cover the events under section I and section II, paragraph A, item 10 - 15 of Annex No. 1of the Insurance Code and for reinsurers from the current BGN 6 400 000 to 7 million. The minimum capital requirement for a captive reinsurer was increased from BGN 2 million to 2 200 000. The changes are giving the insurance companies a three months period, after the law goes into effect, to bring their capital in compliance with the requirements.

The amendments also provide the annual budget and annual financial statement of the Insurance Industry Guarantee Fund to be presented for approval by the Financial Supervision Commission.