After the decision of the Financial Supervision Commission to revoke the license of the insurance company “DallBogg: Life and Health“, thousands of clients are wondering what will happen to the insurance policies they have concluded and whether they will receive compensation in the event of damage.
The Chairman of the FSC, Vasil Golemanski, explained to bTV that the revocation of the license means that the company no longer has the right to sell new insurance policies either in Bulgaria or on the territory of the European Union. However, the company remains obliged to service all contracts already concluded.
„The insurer must continue to fulfill its obligations under the current policies, including under „Civil Liability“, Golemanski said.
What happens in the event of damage?
According to him, clients should first contact the company itself, despite the fact that its license has been revoked.
Questors appointed by the Financial Supervision Commission have already taken over the management of the company. Upon entering the company, they found that all employees had been laid off, but they had the authority to hire new staff and organize the processing of damages and claims.
If the company's funds prove insufficient to pay compensation, the Guarantee Fund mechanism will be activated.
„The Guarantee Fund will assume payments under „Civil Liability“ when the company's resources are exhausted“, explained the chairman of the FSC.
According to the assessment of the European Insurance and Occupational Pensions Authority, there is a shortfall of about 550 million leva in the company's technical reserves.
„This is about 280 million euros in the company's technical reserves“, explained Golemanski.
According to him, one of the main reasons for the crisis is business a model in which new revenues are used to cover old liabilities, instead of setting aside the necessary reserves for future compensation.
The situation is different with voluntary insurance such as “Casco“.
They are not covered by the Guarantee Fund and can only be serviced as long as the company has its own funds.
Is there a risk to pension savings?
Golemansky assured that there is no danger to the clients of the pension company “DallBogg“, since it is a separate legal entity and is in a stable financial position.
“The pension insurance company is stable. There is no reason for people to worry about their funds“, he stressed.
According to him, the only possible consequence is that the company will have to change its owner in the future due to the problems of the insurance company.
During the conversation, the chairman of the FSC also commented on the topic of the increase in the price of “Third Party Liability“ insurance for motorcycles.
According to him, the reason why many companies have eliminated the deferred payment is the practice of a large part of motorcyclists using the insurance only during the active season, without paying all the contributions.
The FSC is preparing proposals to facilitate seasonal insurance so that motorcycle owners are not forced to go through complicated procedures for registering and deregistering vehicles.