The Civil Liability insurance policy to be paid in one tranche. Stickers are removed

The suspension of the deferred payments for the Civil Liability (CL) insurance policy by introducing a payment in one tranche and removing the stickers which identify the availability of CL are just some of the changes that the Financial Supervision Commission (FSC) proposed in the Insurance Code (IC) submitted to the Ministry of Finance for approval.

According to experts, the option of payment in instalments has led to vicious practises in which the mandatory policy has seemingly been concluded by paying only the first instalment of the total amount. Thus, the client has a policy which he presents to traffic control authorities and avoids paying the fine or the car being stopped from traffic.

The FSC intends to periodically publish information about each company and about the market in general which will include data on premium incomes, paid claims, amount of technical reserves, commissions paid and others. Furthermore, the FSC will provide details and tariffs for the Civil Liability policy. This has already caused a conflict with one of the companies in the industry - Bulstrad Vienna Insurance Group, which however failed to convince the FSC that this practise is unfair. The efforts of the Commission are focused on the creation of full transparency in the activities of insurers and on improving consumer awareness.

Rumen Yanchev, Executive Director of the Vienna Insurance Group PLC, told Klassa that the payment of the CL policy in one tranche has long been practised in the company and that deferred instalments concern companies with a larger automobile fleet. He explained that he was not against such a measure but could not see how this would be implemented because after 2-3 years the price of the CL policy is expected to be in the range of BGN 300 - 400. “These are amounts which many people will find difficult to pay in one tranche,” he explained. Regarding the publication of data on the CL policy, Yanchev was clear that such information is not disclosed by the financial supervision authority anywhere in foreign countries.

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