ONE MORE STEP FOR CONTROL OVER INSURERS
MPS HAVE RESTORED THE CONCILIATION COMMITTEEUntil recently it was spoken in the public that there was nobody to defend the interests of citizens who do not get their compensations under car insurance contracts. It is not a secret that lawsuits have been initiated in Bulgaria for that reason, although the number of incorrect insurers is small. A few months ago the Union of Insured in Bulgaria sent a protest to the Parliamentary Commission for Citizens' Complaints and Petitions. Clients of insurance companies appealed against the deletion of a provision in the recently approved (at first hearing) Bill on Amendments and Supplements to the Insurance Act. Thus, on May 26, 2004, the commission discussed the moved proposal for a new article 47 in the bill, stipulating the establishment of a conciliation committee with the Financial Supervision Commission (FSC). It will be a body for solving arguments between the companies and their clients. The subjects of arguments are usually the size of compensation or the order for its payment, projected in the insurance contracts. If a citizen is not satisfied with the decision of the conciliation committee he may refuse to sign an arbitration agreement and refer the case to court. The conciliation committee will be also trying to settle arguments between insurers and persons who are traders under the stipulations of the Commercial Code. The body will be authorized to demand officially explanations from the sides and evidence for clarification of the argument. The rulings of the conciliation committee will be obligatory for the insurers. Moreover, the proposed new draft stipulates that an insurer who hampers the committee's operation is liable to a pecuniary sanction up to the amount of the agreed insurance amount, but not less than BGN5,000.That provision fully satisfies the interests of the insured, Georgi Bakalov, Chairman of the Association of Bulgarian Insurers (ABI), commented during the meeting. We acclaim the establishment of a conciliation committee, as similar institutions exist in almost all countries, but we would like to set restrictions to its competence, Violeta Darakova, Deputy Chairperson of ABI and Executive Director of the insurance company Euro Ins, commented for the BANKER weekly after the meeting. In the first place that concerns the evaluation of the size of damages, because such a body could not make a decision in cases when claims for huge amounts of money are placed.ABI has prepared a stance, pointing out a lot of faults in the draft bill. The unclarified statute and rights of the conciliation committee have been pointed out, too. Insurers object to the stipulation that the committee's rulings shall be obligatory only for them and not for the insured. According to the branch organisation, the new authority should be assisting the settlement of arguments only between insurance companies and natural persons who are their clients, as the latter are less protected both financially and juristically than firms. Another proposal of ABI is that the conciliation committee should be solving disputes regarding property damages alone, at that to the amount of BGN3,000-5,000. Maxim Sirakov, Vice President of the insurance and reinsurance company Allianz Bulgaria and member of ABI's Management Board, believes that the committee should be extending stances on small damages alone and its activities should be mainly directed to reaching conciliation, but could not replace arbitration or court. According to insurers, too big rights have been given to the FSC in the conciliation committee. Moreover, the fees payable by insurance companies for extending their licences will be hiked by BGN5,000 in order to cover the costs for maintenance of its nine members.Anyhow, the complaints commission will move its proposal before Parliament approves the amendments to the Insurance Act. It cannot be said if insurers will be able to reach conciliation with the citizens whose rights have been injured, but it is certain that the committee will be one more step to effect control over the observation of rules in the insurance sector.