Bulgarian regulator deputy chief under fire after Cypriot insurer goes bankrupt

Bulgaria’s prime minister Boiko Borissv and Finance Minister Vladislav Goranov demanded on August 20 the resignation of Ralitsa Again, deputy head of the Financial Supervision Commission (FSC), in the wake of the bankruptcy of a Cypriot-registered insurance company that left an estimated 200 000 car owners without mandatory third-party liability insurance.

Speaking to reporters after a meeting with Borissov, Goranov said that the Cabinet had no levers to trigger Again’s resignation, but it was the government’s position that she should resign.

Goranov said that Again failed in her duty as deputy head of the FSC in charge of the insurance sector to provide proper oversight of Olympic, the insurance company declared bankrupt by Cyprus authorities last week.

Even though the company lost its licence in May, FSC failed to notify the government and the finance ministry of the possible repercussions on the Bulgarian market, Goranov said.

Olympic had an estimated nine per cent market share on the third-party liability insurance segment in Bulgaria, attracting customers with lower than the market average policy premium payments, reports in Bulgarian media said.

According to Bulgarian authorities, the total worth of Olympic’s third-party liability policies was about 9.35 million leva, Bulgarian National Radio reported.

Olympic’s customers have to purchase new policies and the issue of recovering part of their policy costs could be a convoluted one – the company operated in Bulgaria based on the licence issued by another EU country, which means it never paid into the Bulgarian insurance guarantee fund, complicating any attempt to recoup costs by Bulgarian customers.

Goranov said that Parliament had the powers to fire senior officials at the FSC under certain circumstances, but “someone has to take responsibility.”

“Given the compounding problems and lack of adequate actions in the insurance sector, which led to such a crisis, the Cabinet’s position is that Ralitsa Again has to voluntarily resign her position as deputy chairperson of the FSC,” Goranov said.

The National Assembly is scheduled to interrupt its summer recess and hold an special sitting on August 21 to discuss the situation, as well as the recent problems caused by the downtime of the country’s Trade Register, BNR said.

Separately, Bulgaria’s prosecutor-general Sotir Tsatsarov ordered on August 20 an investigation into FSC’s and Again’s actions in the Olympic case, with the State Agency for National Security tasked with carrying out the probe.

Again has been in a senior position with FSC since 2005, when she first took charge of overseeing supervision of the insurance sector as deputy chairperson. She later became the deputy FSC chairperson in charge of regulating investment intermediaries in 2010 and was confirmed for a new six-year term as deputy FSC chief in charge of insurance sector supervision in 2014.

(Finance Minister Vladislav Goranov photo: minfin.bg)



The Sofia Globe staff

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