Mr. Vladimir Savov, Deputy Chairperson of the Financial Supervision Commission, Head of the Insurance Supervision Department, participated in an international conference on “Risk-based insurance supervision – the way forward in the post-pandemic world”, organized by the Croatian Financial Services Supervisory Agency (HANFA). The event brought together representatives of regulatory authorities from Central and Eastern Europe, who discussed insurance risks and prospects in the post-pandemic environment.

In his presentation, Mr. Savov drew attention to the major challenges in supervising the market behaviour of insurers and insurance intermediaries, the growing digitalization of the insurance sector following the Covid-19 pandemic, and shared the experience in supervising the insurance sector by the Financial Supervision Commission in Bulgaria.

He told the conference that “Despite the unprecedented global situation caused by Covid-19, the insurance market must find a balance between protecting consumer interests on the one hand and maintaining financial stability on the other.” Mr. Vladimir Savov also pointed out the advantage of digitalization in the insurance sector, noting that insurers have responded adequately to the pandemic and have imposed various workable solutions to facilitate insurance service users. He concluded that regulators must also adapt to the constraints and risks posed by the Covid-19 pandemic, adapt their supervisory practices to dynamically changing conditions, identify the effects on supervised entities ahead of time, and use technological solutions and develop their capacity to be able to make timely and effective decisions.

The Social Insurance Supervision Department of the Financial Supervision Commission announced the results of the change of participation and transfer of funds of insured persons from one to another respective pension fund for the second quarter and first half of 2021. The data were obtained on the basis of reports submitted by pension insurance companies to the Financial Supervision Commission.

In the second quarter of 2021, a total of 84,816 applications for change of participation and transfer of funds from one pension fund to another were submitted to the pension insurance companies.

A total of 72,876 insured persons from the applications submitted in the second quarter of 2021 have changed their participation in the supplementary pension insurance funds. The total amount of the funds transferred to another pension fund of the respective type is BGN 298,998,865.

The insured persons who exercised their right to change their participation and transfer funds from the individual accounts in the first half 2021 are a total of 147,347. The total amount of transferred funds since the beginning of the year is BGN 579,876,453.

Results of the change in the participation and transfer of funds from one to another respective pension fund for the second quarter and first half of 2021 are available in section: Social Insurance Activity / Statistics / Statistics and analysis / 2021.

Ordinance No. 71 on the requirements for the governance system of insurers and reinsurers, adopted by the FSC on 22.07.2021, was promulgated in SG 64 / 2021 and is effective. In accordance with the delegations provided for in it for issuing guidelines on its implementation, at its meeting on 09.09.2021 the FSC adopted the following instructions:

 Instructions regarding the application of Art. 75, para. 1 of Ordinance No. 71 in connection with the observance of the Guidelines for Outsourcing to Cloud Service Providers issued by the European Insurance and Occupational Pensions Authority (EIOPA-BoS-20-002);

 Instructions regarding the application of Art. 102, para. 1 of Ordinance No. 71 in connection with the observance of the Guidelines on Information and Communication Technology Security and Governance issued by the European Insurance and Occupational Pensions Authority (EIOPA-BoS-20/600).

 These guidelines were adopted by the FSC in response to the intensifying process of digitalization in insurance. Through them, the FSC aims to facilitate the application of the specific requirements for the award of activities to could service providers (services provided through data processing in the so-called. “Cloud space”), which are a source of new risks for insurers and reinsurers and require a higher standard of information security in their activities. With these guidelines the FSC aims to establish additional guarantees to ensure compliance with the confidentiality, integrity and availability of information and information systems, with a view to limit the operational risk to which insurers and reinsurers are additionally exposed as a result of the use of high technologies for storage, processing and access to data.

 The adoption of these guidelines completes the national legal framework for the governance system of insurers and reinsurers in accordance with the Insurance Code and the guidelines of the European Insurance and Occupational Pensions Authority. In this manner conditions are created for better management of the new risks faced by insurers and reinsurers, and the guarantees for protection of the interests of the users of insurance services in the environment of a digitized insurance market in the Republic of Bulgaria are strengthened.

A seminar with a target group of persons supervised by the FSC is forthcoming, and the topics are related to the application of the LMML, the LMFT and the acts on their implementation.

The Financial Supervision Commission (FSC) plans to organize and conduct an online training seminar for entities supervised by the FSC on topics related to the implementation of measures to prevent money laundering and terrorist financing provided for in the Law on Measures against Money Laundering (LMML), the Law on Measures against Financing of Terrorism (LMFT) and the acts on their implementation, as well as the identified risks of money laundering and terrorist financing, published in the National AML/CFT Risk Assessment published on 19.01.2020 in the Republic of Bulgaria. Issues related to the forthcoming evaluation visit related to the evaluation of the Republic of Bulgaria within the Fifth Evaluation Round of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism at the Council of Europe (MONEYVAL) will also be discussed.

The seminar will be opened by Boyko Atanasov, Chairman of the FSC and will be held on 26 August 2021 /Thursday/, from 10:00 to 15:30, through the Microsoft Teams platform, for the following supervised persons:

 investment intermediaries (obligated persons under Art. 4, item 8 of the LMML);

 collective investment schemes and other collective investment undertakings (obligated persons under Art. 4, item 9 of the LMML);

 management companies and persons managing alternative investment funds (obligated persons under Art. 4, item 10 of the LMML);

 pension insurance companies (obligated persons under Art. 4, item 11 of the LMML);

 insurers and insurance intermediaries based in the Republic of Bulgaria who have received a license under the terms and conditions of the Insurance Code when operating in one or more of the classes of insurance under Section I of Appendix No. 1 to the Insurance Code (obligated persons under Art. 4, item 5 of the LMML);

 insurers and insurance intermediaries licensed in another Member State operating on the territory of the Republic of Bulgaria when operating under one or more of the classes of insurance under Section I of Appendix No. 1 to the Insurance Code (obligated persons under Art. 4, item 5 of the LMML);

 insurers based in countries other than a Member State licensed by the Financial Supervision Commission to operate in the Republic of Bulgaria through a branch when operating in one or more of the classes of insurance under Section I of Appendix No. 1 to the Insurance Code (obligated persons under Article 4, item 5 of the LMML).

You can confirm your participation by e-mail: lenkova_rd@fsc.bg, no later than 25.08.2021 /Wednesday/ until 12:00.

After confirming your participation you will receive a link to the event.

Data on the capital market for 2020 have been uploaded on the FSC website – www.fsc.bg, section “Investment Activity”, “Statistics”, “2020”.

The Social Insurance Supervision Department of the FSC announced the results of the supplementary pension insurance activity for the first half of 2021. The information was obtained on the basis of the reports and references submitted by the pension insurance companies to the Financial Supervision Commission. The data on distribution of insured persons by sex and age as of 30.06.2021 have also been published.

The total number of insured persons in the four types of pension funds as of 20.06.2021 is 4,828,080 people, increasing compared to 30.06.2020 by 0.60 per cent.

In the system of the supplementary pension insurance as of 30.06.2021, BGN 18,469,223 thousand of net assets have been accumulated. Compared to the end of the first half of 2020, the net assets of pension funds increased by 16.48 percent.

The total revenues of the pension insurance companies for the first half of 2021 amount to BGN 113,512 thousand and increased by 10.87 per cent compared to the reported revenues for the first half of 2020. The net financial result of the companies as of 30.06.2021 amounts to BGN 33,629 thousand

Detailed information on the results of the supplementary pension insurance activity for the first half of 2021 and on the insured persons and the accumulated funds as of 30.06.2021 by sex and age are available in the section: Social Insurance Activity / Statistics / Statistics and analysis / 2021.

 The data presented from the reports of insurers in non-life and life insurance at the end of May 2021 are summarized and published on the FSC website – www.fsc.bg, section “Insurance Activity”, “Statistics”.

For the period from 01.07.2021 to 31.07.2021 the FSC received notifications from the competent authorities of Member States regarding the intention of 41 (forty-one) insurers and insurance intermediaries based in other EU Member States to operate (entry or termination of the notification) on the territory of the Republic of Bulgaria under the terms of the freedom to provide services.

The FSC received 5 (five) notifications regarding the intention of insurance companies based in Member States of the EU to operate in the territory of the Republic of Bulgaria under the terms of freedom to provide services (registering insurance companies in the FSC list of notifications), as well as 1 (one) notification regarding the withdrawal of intention of one insurance company established in an EU Member State, to operate on the territory of the Republic of Bulgaria under the terms of freedom to provide services.

As of the end of July 2021, the number of insurance companies based in other EU and EEA Member States which intend to operate in Bulgaria under the principle of freedom to provide services, increased to 430 (six hundred and thirty).

For the period, the FSC received 13 (thirteen) notifications regarding the intention of insurance intermediaries based in EU Member States to carry out insurance mediation activities in Bulgaria under the terms of freedom to provide services, as well as 11 (eleven) notifications for termination of such activity in the country. As of 30.07.2021, there are 2,294 (two thousand two hundred and ninety-four) insurance intermediaries based in EU Member States that have stated their intention to carry out cross-border insurance intermediation activities in Bulgaria

For the period 01.07.2021 – 31.07.2021 the FSC has not sent notifications to the national competent authorities of the EU Member States regarding the intention or withdrawal of the intention of the insurance companies and insurance intermediaries based in the territory of the Republic of Bulgaria to carry out cross-border activity.

As of the end of July 2021, the total number of local insurance companies that have stated their intention to carry out insurance activities in the territory of other EU and EEA Member States under the terms of freedom to provide services is 17 (seventeen), and the total number of insurance intermediaries based in the Republic of Bulgaria, which have stated their intention to carry out insurance intermediation activities on the territory of EU Member States under the terms of freedom to provide services or the right of establishment, remains 52 (fifty-two).

The updated lists of notifications are available on the FSC website in the section “Supervised entities” – “Notifications”.

The data presented from the reports of insurers in non-life and life insurance at the end of April 2021 are summarized and published on the FSC website – www.fsc.bg, section “Insurance activity”, “Statistics”.