Bulgaria's Commission for Protection of Competition (CPC) has issued sanctions of 250,000 each to insurance companies Bulstrad, Bulgarski Imoti and Lev Ins; 175,000-leva sanctions to Allianz Bulgaria, Armeets, Victoria, Generali Insurance, Euroins and Bulins; three sanctions of 150,000 each to Interamerican Bulgaria, Municipal Insurance Company, HDI, as well as two sanctions of 100,000 each to DSK Garancia and Energia.

The CPC also sanctioned the Association of Bulgarian Insurers with a 20,000-leva fine, the watchdog said.

The sanctions were issued over the memorandum signed by the association in relation to the adoption of common actions and the establishment of favorable conditions for the sales of the mandatory Civil Liability (Third Party Motor Liability) insurance policy.

CPC's analysis shows that the memorandum, which is only a project, aims at the setting of a unified minimum premium on the Civil Liability insurance, as well as at the setting of a maximum amount for the commissions of insurance brokers. The limits set in the memorandum contradict to the Insurance Code and CPC's instructions.

Agreements between companies and decisions aimed directly or indirectly at the fixing of prices or other market conditions are the gravest violation of the right to competition and inflict the most serious damages to the market. Thus, the model of effective competition is replaced with self-restrictive co-ordinated actions by the market participants. Similar agreements or decisions are illegal even if they have not yet had a real effect on the market, according to the European practices.

This is the first case when the CPC applies directly the ban under article 81 of the EC Treaty, due to the possibility that the memorandum may affect the traded between the EU member countries.