GREEN CARD ROULETTE WHIRLED BY ELEVEN COMPANIES
Eleven insurance companies attended the constituent assembly of the newly-established non-profit company National Bureau of Bulgarian Automobile Insurers. They will offer the Green Card insurance after January 1, 2002. Until then Bulstrad will remain the only company to sell such policies. Within that period the insurers should train personnel to operate with that product and carry out the necessary organization for offering this kind of service. Meanwhile, the National Bureau will have to prepare the rules and regulations for its operation in order to start working efficiently as of January 1, 2002.
The newly-established association will be Bulgaria's representative in the London-based Council of Bureaus, as well.
The decision was made at the general meeting of the new structure, held on July 2, 2001. Eleven of all the 20 licensed local insurance companies will try their chance in that headache-causing (from a proint of view of the sophisticated damages and their long settlement term) business. The masse attendance of the constituent assembly on the part of Bulgarian insurers confirms some experts' forecasts that we shall again make a kind of an exception in that direction from approved European practice.
In France, for example, there are some 550 insurance companies, but only 30 of them (that have assumed they could afford it) are members of the local Green Card bureau. The situation is similar in other Westeuropean countries as well. More experienced insurance experts note that the enticement of huge profits from Green Card sales forces to the background the real estimation about the amount of risks and the financial resource, which each company in that business should have.
The future will show if all these 11 companies have succeeded to assess adequateley their own abilities. The first threshold, on which some of the companies would probably stop, will be the required bank guarantee of EUR 600,000. It has to be deposited within two months upon the association's registration in court, and this will be done in the next few days. So, by end-September at the latest each of the association's members should provide a guarantee from a first-class bank.
Each guarantee is to be approved by the general meeting of the National Bureau, scheduled for the same month. Then it will become clear if all members will remain in the association, Atanas Tabov, CEO of Alianz Bulgaria insurance and reinsurance company commented to the BANKER weekly. The National Bureau's members will also sign a joint reinsurance contract. A guarantee fund will be set up as of January 1, 2002 as well. The deposit into it will be calculated as a percentage of the insurance premium. Unified policy and strategy should be adopted regarding tariffs, terms, liquidation of damages, and professional experience in the individual insurance companies, because their operation will reflect on the financial state and image of the National Bureau and, therefore, on Bulgaria as well, Mr tabov added.
A five-member Management Board was elected to manage and represent the National Bureau. The Board is headed by Mr Tabov, and Tsvetanka Kroumova (Director of Bulstrad's Legal Department) was appointed Chief Secretary. The other three members are: Tatyana Chonkova (Director of Corporate Relations and New Products Department at Jupiter insurance company), Yordan Genchev (First Deputy Chairman of Vitosha insurance company), and Borislav Mihailov (CEO of the DZI State Insurance Institute).