CONSUMER PROTECTION FOR INSURANCE SERVICES IN BULGARIA

1
CONSUMER PROTECTION FOR INSURANCE SERVICES IN
BULGARIA

• Ralitsa Agayn Guri
• Deputy Chair of the Bulgarian Financial
  Supervision Commission

2
Insurance undertakings

• Avoiding Conflict of Interests
• Observation and Disclosure of Insurance Secrecy
• Organization of the Activity of Insurance Claims
  Settlement
• Internal rules that every insurer shall have in
  place in order to guarantee swift, transparent
  and fair treatment of the consumers
• Procedures of filing and processing an insurance
  claim
• Term of settling a claim.

3
Internal Rules

• File claims under insurance contracts,
• Collect evidence in order to establish their
  grounds and amount,
• Perform assessment of the damages incurred,
• Specify the indemnity amounts,
• Effect payments to consumers
• Consider complaints submitted by consumers.

4
Filing Insurance Claims. Proofs

• Acknowledge the receipt of each claim filed.
• Additional proofs
• a consumer of an insurance service is not a party
  to an insurance contract (e.g. injured person
  under Third Party Liability Insurances or a Third
  Party Beneficiary)
• a consumer of an insurance service is a party to
  an insurance contract

5
Term for pronouncing on a claim

• 15 days following the submission of all proofs
  and not later than 3 months after the claim
  filing regarding the MTPL
• Assess and pay the amount of the indemnity or the
  sum insured or
• Legitimately refuse to effect the payment.

6
Prohibition for imitation

• Prohibition to use a company name, marks or an
  identification sign, identical to or approximate
  to those of other persons in a manner which may
  damage the interest of the competitors and/or the
  consumers.

7
Insurance contract

• Form an insurance policy or another written act.
  
• An insurance acknowledgement, a certificate or a
  voucher.
• An insurance acknowledgement, certificate or
  another written document, certifying an insurance
  contract concluded, in the cases where this is
  provided for under a law (e.g. green card
  certificate).
• Mandatory Terms
• Restrictions to the choice of law applicable
• Requirements to the General Conditions to
  Insurance Contracts
• Unfair terms in consumer contracts

8
Consumer information to be provided prior to the
conclusion of the insurance contract

• Company name of the insurer and its legal form
• Legal seat and registered office of the insurer,
  as well as of the branch, through which the
  insurance is taken up
• Procedures on out-of-court settlement of disputes
  between the parties to an insurance contract, if
  provided for
• The law applicable to the contract, where the
  parties do not have the right to free choice of
  applicable law, or the proposed by the insurer
  applicable law respectively, where the parties
  are entitled to a free choice.
• Additional information in the case of a Life
  assurance

9
Third Party Liability

• Direct right of action of the Third Injured Party
  against the insurance undertaking under the
  general civil liability (Third Party Liability)
  insurance
• Liability of the insurer for intentionally caused
  damage in the relationship with the Third Injured
  Party under an insurance contract for compulsory
  third party liability (TPL) insurance

10
Life or Accident insurance

• Invalidity when covering death of a minor person
  or of a person placed under full judicial
  disability, as well as with coverage of the risk
  of abortion or giving birth to a dead child
• Conclusion and termination of life or accident
  insurance contracts which subject is the life,
  health or physical integrity of a third person
• Premium payment under life insurance contracts

11
Obligatory insurance

• Prohibition to refuse concluding insurance
  contract for obligatory insurance by an insurer,
  authorized for such class of insurance

12
MTPL

• Sign for verification of the conclusion of a MTPL
• Standard numbering of the insurance policies

13
Insurance Intermediaries

• Principles of voluntary participation and due
  diligence
• Requirement of Secrecy
• Identification
• Information provided to Insurance Services
  Consumers
• Requirements concerning the Information Provided
• Observation and Disclosure of Insurance Secrecy

14
Ways for protection of the consumers rights

• Respective administrative measures taken by the
  FSC as a collective body or the Deputy
  Chairperson of FSC in charge of the Insurance
  Supervision Division
• Starting a court lawsuit by the consumer against
  the insurer
• Out-of-court settlement of the dispute between
  the insurer and the consumer

15
Administrative measures -1

• Enforcement of coercive administrative measures,
  e.g.
• giving concrete instructions to the insurer to
  eliminate the violation made and to execute the
  refused or unlawfully delayed act or to cease
  committing the infringement
• laying the insurer offering obligatory insurance
  under the obligation to conclude a contract with
  a person to whom the said insurer has refused
  such conclusion
• prohibiting conclusion of new insurance or
  reinsurance contracts on all insurances or some
  of their types, prolongation of the contracts
  term and extension of the cover under the
  contracts for a period not longer than six (6)
  months
• lots of measures regarding the insurer financial
  stability, etc.

16
Administrative measures - 2

• Realizing the insurers administrative liability
  through imposing an administrative sanction
  following the rules of the Bulgarian
  Administrative Violations and Sanctions Act.
• Cooperating with the supervised person with
  respect to settlement of the problem without
  enforcement of the above measures.

17
Enforcement of administrative measures by the
supervisory bodies

• As a result of a current supervision.
• As a result of an inspection made.
• As a result of a consumers complaint against the
  insurer filed before FSC.

18
Procedure for handling consumer complaints by the
FSC - 1

• Legal framework
• Financial Supervision Commission Act and
  Insurance Code do not set forth explicit powers
  of the financial supervisory bodies.
• No any Internal Rules (handbooks) in respect of
  the procedures for handling complaints against
  insurers have been adopted by the Financial
  Supervision Commission.

19
Procedure for handling consumer complaints by the
FSC - 2

• Checking the regularity of the complaint it
  shall be free formatted and FSC could handle only
  written complaints. Anonymous complaints are not
  handled at all.
• Upon the initial reviewing of the complaint the
  following items shall be ascertained
• Case circumstances what kind of event has
  happened, what kind of documents and items have
  been filed with the insurer, is there a reply
  made by it, what is the content of its reply,
  etc.

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Procedure for handling consumer complaints by the
FSC - 3

• What is the applicants demand.
• What are his/her arguments in maintenance of
  his/her demand.
• What are the insurers arguments.
• What are the applicants objections made in the
  correspondence with the insurer or/and in his/her
  complaint filed with FSC.

21
Procedure for handling consumer complaints by the
FSC - 4

• Making a check regarding the case. Preparing
  letters
• A sample confirmation letter to the applicant.
• A letter to the insurer stating the case
  circumstances, the applicants claims and demand
  in brief.

22
Procedure for handling consumer complaints by the
FSC - 5

• Actions undertaken by the supervisory body after
  reception of the insurers statement
• On the basis of the insurers statement a letter
  to the applicant shall be prepared consisting the
  supervisory bodys opinion regarding the problem
  set out in the complaint.
• When the request could not be granted because of
  objective reasons (often because of a civil
  dispute which is beyond of the financial
  supervisory bodys powers) these concrete reasons
  and a suggestion for settling out the problem
  shall be presented to the applicant. This letter
  shall bring the case to its end.

23
Procedure for handling consumer complaints by the
FSC - 6

• When the insurers answer to FSC is unclear,
  uncompleted or non-consisting all the information
  necessary for clarifying the case
• second letter to the insurer requiring additional
  information and documents shall be sent.
• final letter to the applicant shall be sent after
  receiving and reviewing the additional
  information demanded by the insurer.

24
Procedure for handling consumer complaints by the
FSC - 7

• When an administrative violation made by the
  insurer is ascertained the supervisory bodies
  could enforce the administrative measures
  mentioned above.