Банкеръ Weekly

Briefs

CPC TO CEASE INSPECTIONS ON THE GREEN CARD INSURANCE?

The Competition Protection Committee (CPC) will most probably cease the inspection on the illegality of the single lowest rates at which the Green Card insurance is offered. Therefore, companies that are members of the Green Card bureau will probably avoid any sanctions. About a month ago the committee, presided by Nikolay Pavlov, began to inspect the reasons why nine companies had reached an agreement about the lowest sales rates of the Green Card insurance, as well as why the service had grown more expensive since Bulstrad was no longer a monopolist.At the end of last week CPC Chairman Nikolay Pavlov had a meeting with the Chairman of the Green Card National Bureau, Atanas Tabov, and other insurers. The meeting took place on a neutral territory in the Insurance Supervision Agency and aimed at clarifying the positions of all sides.During the conversations the insurers informed CPC about the general opinion of the national bureau and the principle motives for raising the price of the service as there was no longer a monopolist. However, CPC asked each company to explain its own reasons for the new tariffs. The deadline by which the companies should submit their documents is expiring in the beginning of next week. Nevertheless, insurers comment that this is a merely formal requirement and, in practice, the members of the committee have decided to cease the inspection as ungrounded. A BGN300,000 fine was threatening each one of the companies that offered this service, if evidence could be found that they had violated the Law on Competition Protection.The general opinion of the National Bureau presented to CPC reads that the offering of a single lowest tariff does not mean price coordination on the basis of an agreement between the insurers, but does mean control over the activity of those who participate in the offering of the Green Card insurance. According to the insurers, the lowest tariff of the service is accepted analogically to the lowest insurance amounts of obligatory insurances such as Civil Liability and Transport Civil Liability. There is a similar price-making policy in Turkey and Poland, representatives of the organization say.Another reason that made the bureau apply obligatory lowest rates is the need of an guarantee fund. The fund is necessary because if there are financial problems in any of the member companies in the bureau, damages on the Green Card insurance are paid jointly by the other members, insurers explain. When the Green Card Bureau was established three months ago, it committed itself to defend its members in front of the Bureaux Council and to sign bilateral agreements with similar foreign structures, as well as to manage the issuance of the international certificate. There are nine companies members of the Bureau - Bulstrad, DZI, Allianz, Jupiter, Bul Ins, Hanover Koop, Euroins, Orel and Vitosha.

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