BULGARIA: MTPL insurers' contribution to the motor Guarantee Fund raised by BGN 2 per policy

Bulgarian FSC (Financial Supervision Commission) has raised the fixed amount of contribution that Bulgarian insurers have to transfer to the Guarantee Fund for each MTPL contract issued, as a followup to the December 20th discussion when the Commission initially talked about a possible change in the amount of contribution.

The contribution is calculated per each motorized vehicle, up until now being BGN 8.50/vehicle, adding BGN 0.15/passenger seat (excluding the driver's seat) as an extra for the vehicles used for public transport. The amount of contribution that each insurer has to pay is approved and changed when needed by the FSC on the proposal of the Guarantee Fund Council.

On 24 January 2019, the FSC decided to raise the contribution/vehicle by 2 levas, from BGN 8.50 to BGN 10.50 fixed level, while the public transport extra contribution of BGN 0.15 per seat was kept at the same level. According to the Guarantee Fund actuarial calculations, this change was needed as the claims' average value is going up year by year, and the indemnities' maximum level is raising. At the end of October 2018, there were BGN 52.4 million in the Uninsured Vehicle Fund.

The motor Guarantee Fund is responsible for managing two entities - the Uninsured Vehicle Fund (which indemnifies the victims of road traffic accidents that were caused by an uninsured or unidentified vehicle) and the Secured Fund (which is responsible for paying the indemnities when a MTPL insurer goes into bankruptcy and has obligations to honor). The present total contribution of BGN 12.00 is allocated to the funds in question.

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