Банкеръ Weekly

Briefs

GUARANTEE FUND PAYS FOR TWO CASES OF BANKRUPTCY

The saga around the bankruptcy of two insurance companies, International Insurance Company Evropa and Hilden Insurance House is on its way to finish.
Three year after the Commission for Financial Supervision revoked their licences, their clients will be finally able to get their insurance compensations.
As of October 1, the Guarantee Fund will start refunding the insured with Evropa and for this to happen those included in the final list of claims approved in court, will have to submit several documents to the Guarantee fund, which will allow the sums to be transferred to their bank accounts.
UniCredit Bulbank has been selected for servicing bank. Those insured with Hilden may count on their money after October 24.
As a matter of fact, not everybody insured with Evropa and Hilden will get what they claimed. In compliance with the Insurance code, only damages under mandatory insurances, such as civil liability and passenger accident insurances, as well as life insurance claims will be satisfied. Representatives of the Guarantee Fund told the BANKER weekly that the final list of claims to be satisfied includes 138 cases of car insurances for Evropa and another 140 policies for Hilden.
Combined, the insurance claims exceed BGN1.5MN. A total of BGN623,150 will go for insured with Evropa and the remaining BGN937,250 will be paid to former Hilden's clients.
The sums will not come from what is collected after the sale of companies' assets. Most probably, people who follow the topic, remember that the two entities had been syphoned yet before their declaring bankrupt, which was announced by the Financial Supervision Commission's Insurance Division head, Ralitza Agajn. That is why the funds will come from the Guarantee Fund, that was set up at the end of 2007 with the aim to indemnify insured in case their insurance company goes bankrupt.
In order to secure the payment of the claims, Finance Ministry transferred BGN2.0MN to the Guarantee Fund in December 2007 and then it was still unclear if the money will suffice. The Fund has now its own sources of financing. All insurers will have to pay BGN1.50 for each car they insure, BGN0.20 for each passenger accident policy they sell and BGN0.70 for each life insurance contract they sign.
The fund has already accumulated BGN1.31MN and this sum will be enough to cover the payments to all claimants of the final list. It is a totally different question if after a three-year delay the extent of the compensations will be sufficient enough.

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