Bulgaria Raises Liability Limits for Motor Insurance with Euro Adoption

Bulgaria's forthcoming adoption of the euro will bring changes to the liability limits for compulsory motor insurance. According to the Financial Supervision Commission's (FSC) Program for the Protection of Consumers of Non-Banking Financial Services and Products, the liability limits for non-pecuniary and property damage resulting from bodily injury or death will increase to 6,450,000 euros per event. For property damage, the limit will rise to 1,300,000 euros per event. Currently, these limits are set at 10,420,000 leva for bodily injury or death and 2,100,000 leva for property damage per event, regardless of the number of affected parties.

Insurers are required to maintain transparency by publishing their claims settlement procedures on their websites. Measures implemented by the FSC have enhanced the financial stability of the insurance sector while also promoting transparency, particularly in managing "Motorists' Civil Liability" insurance—the most common form of coverage.

An electronic policy generation system, managed by the Guarantee Fund, is already operational. This system maintains a registry of all active "Motorists’ Civil Liability" insurance policies for specific vehicles, identified by their registration or frame numbers. The Guarantee Fund's website provides public access to this information.

Regulations also specify time limits for insurers to request additional evidence from policyholders in claim settlements. For "Civil Liability" contracts, insurers must comply within 45 days from the claim's filing date. The law prohibits insurers from demanding evidence that policyholders cannot reasonably obtain due to regulatory or legal barriers. This provision aims to prevent unwarranted delays in claim settlements by ensuring that requested evidence is necessary and relevant.

To protect policyholders in cases of insurer bankruptcy, a "Provisional Fund" has been established. This fund guarantees claims arising from "Civil Liability," compulsory passenger "Accident" insurance, and life insurance contracts. Once a court decision declares an insurer bankrupt, the fund covers the insurer’s obligations to policyholders. The measure underscores Bulgaria’s commitment to safeguarding insurance service users amid its transition to the eurozone.