The Security Fund is established and managed by the Guarantee Fund in accordance with the Insurance Code and other applicable regulations.
The objective of the fund is to protect consumers in case of insolvency of an insurer domiciled in the Republic of Bulgaria or a branch of an insurer from a third country, registered in the Republic of Bulgaria only for the operations carried out through the branch in the country
І. What is guaranteed?
The Security Fund guarantees and pays:
- receivables/due compensations to the injured parties under the compulsory motor third party liability insurance and the accident insurance for public transport passengers. the receivables to each person are guaranteed in full up to the amount of the minimum compulsory insurance amounts under the respective insurances.
- Life insurance receivables (insurances under Section I of Annex No. 1 of the Insurance Code) of each insured person amounting to a total of up to BGN 196,000.
ІІ. How is it financed?
The security fund is mainly financed by the annual contributions of the insurers. The amount of the contributions is determined each year by the Financial Supervision Commission based on a proposal by the Guarantee Fund. It may not be lower than the minimum amount of contributions specified in the Insurance Code:
- Per each Motor Third Party Liability policy - BGN 1.50.
- In case of Passenger Accident Insurance – per each seat except the driver's – BGN 0.20.
- Per person insured under high-risk life insurance – BGN 0.70 each.
- Per insured person under another life insurance – BGN 1, but not more than 2 percent of the due annual premium.
In 2022, the contribution to the Security Fund per insured motor vehicle under the Motor Third Party Liability Act remains unchanged and amounts to BGN 2.50.
Other sources of financing may be income from receivables from recourse claims, income from investing the fund's resources and others, as described in the Insurance Code.
ІІІ. What is the procedure for payment of guaranteed receivables in the event of insolvency of an insurer?
After the entry into force of the decision to declare insolvency of an insurer, a list of due guaranteed receivables is prepared.
Within 14 days of the approval of the list, the Guarantee Fund announces in at least two central daily newspapers the date as of which the payments of the due receivables is to start and the bank through which they will be made.
Payments are made by the Guarantee Fund by bank transfer in BGN. For receivables denominated in foreign currency, the amount is paid in BGN at the central exchange rate set by the Bulgarian National Bank as of the starting date of payment of the receivables.