FSC Imposed Fines of Nearly 2.3 Mln Lv in 2008

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FSC Imposed Fines of Nearly 2.3 Mln Lv in 2008

The Financial Supervision Commission (FSC) imposed fines of over 2,290,000 leva in 2008, Deputy Chair Ralitsa Again said in Parliament on Thursday when the FSC report for 2008 was discussed.

While the annual report was not adopted, the MPs approved the Commission's budget implementation report.

Again said that insurance companies were fined over 1.6 million leva for failing to duly submit reports on third-party liability insurance contracts. This affected both the scope of insurance and the Interior Ministry's ability to impose fines on delinquent drivers.

About 80 per cent of cars in Bulgaria are insured, Again told journalists earlier in September. The EU requirement is that at least 90 per cent of cars must have third-party liability insurance.

According to the Financial Supervision Commission, motor casco and third-party liability insurance account for 45 per cent and 25 per cent, respectively, of the general insurance market. Fire and natural disaster insurance comes third.

Insurers in Bulgaria posted a 20 per cent increase in gross premium income to 1,804 million leva in 2008, the report said.

The ruling GERB party said it would not back the report because the FSC was not effective enough. MPs also said state funding for the Commission was several times larger than the fines it imposed.

Ivan Kostov (Blue Coalition) said he would not back the annual report because the Commission did not explain why the Stock Exchange posted one of its worst slumps in 2008. He opined that the Stock Exchange would hardly turn around in the next 20 years without changes in the FSC leadership. Kostov also said that at a hearing in 2008 about pension funds the FSC former chairman, Apostol Apostolov, promised that the funds' losses due to the economic crisis would be stated in the annual report but it failed to do so. Kostov also criticized the Commission for failing to propose legislation to address the crisis.

Reacting to Kostov's statement about the Stock Exchange, Again said that this March saw signs of recovery and that the SOFIX index increased nearly 100 per cent. There still is no foreign investment, she said, adding that the regulation of the Central Depository should open the Bulgarian market to foreign investors and give Bulgarian investors access to foreign stock exchanges.

A flexible premium policy has ensured a profit for insurers after the losses from third-party liability insurance left them in the red at the end of last year. The profit now stands at a total of 9.3 million leva against a loss of 2.4 million leva early in the year, the FSC said earlier in September.

Source: BTA

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