Newspaper Insurer Press Issue No 2

Newspaper Insurer Press Issue No 2

(27 January – 10 February 2010) with an accent put on the highlights, hot topics and comments

Dear readers, in the overview of the newspaper Insurer Press we put an accent on the highlights and hot topics news and events. We make you acquainted with the analyses and thoughts expressed by the leading insurers and also keep you informed about all that happened within the period between the last two issues of the newspaper.

We offer our best wishes to our contributors, friends and well-wishers, who celebrate their birthday or name-day.

Many happy returns!

On page 2 we find the editorial “Bulgaria: Where to after the crisis”.

On 22 January, a discussion entitled “Bulgaria: Where to after the crisis” took place in Sofia on the initiative and with the participation of President Georgi Parvanov. The forum aimed at opening broad discussion on priorities in varied field of public life and working out national strategy for development of the state in the present decade – Bulgaria 2020.

Prime Minister Boyko Borisov attended the discussion too. So did the former president Zhelyu Zhelev, ministers, economists and bankers, as well as Petar Chobanov, Ph.D. – Chairman of the Financial Supervision Commission.

In a report, Mr. Parvanov pointed out that the state works in parallel with the European institutions in elaborating counter crisis measures. I chose the topic about challenges to Bulgaria in the post-crisis development of the state, because crisis again puts the questions: Where are we? It is my contention that this time we are not backward, the President said further.

The crisis has yet again raised the issue of whether Bulgaria will continue to stand on the sidelines, waiting for Brussels's next assessment or the next installment of money, or it has the ambition to be a key player in forming the common European policy, said President Georgi Parvanov.

Universities and the Academy, some NGOs, trade unions presented their work on overcoming the after effects of the crisis. The time for seeking consolidation of all these efforts is coming. The best thing would be to make a national consensus project, said Parvanov.

On the same page, with continuation on page 15 we inform you that the health insurers back government overhaul proposal for healthcare system reforms.

Speaking at a round-table discussion themed “Healthcare strategy for Bulgaria’s future development”, Mimi Vitkova, chairperson of the Association of Licensed Voluntary Health Insurance Companies (ALVHIC), said the industry will throw its weight behind the proposal for healthcare reforms put forward by Doctor Lachezar Ivanov, chairperson of the Parliamentary Healthcare Committee.

ALVHIC supports the efforts of the Bulgarian parliament and the government for changes and refinement of the healthcare and insurance system aimed at achieving long-term financial stability, access to a real health insurance market and improvement of the healthcare services, stated the opinion of ALVHIC.

          The column Between Two Issues carries the news:

• FSC examined the applications of the eligible candidates to pass the License exams for recognition of legal capacity of Responsible Actuary in the field of insurance and the supplementary pension insurance, scheduled on 13 and 27 February and 13 and 27 March 2010.
• Emil Atanassov, Deputy Chairman of FSC, Head of Insurance Supervision Division, issued two approval decisions for Nikolay Genchev Kavardzhikliev as Member of the Board and CEO of  UNIQA AD and of UNIQA Life Insurance Company. „
• By another decision issued by Mr. Atanassov, Uray Urchick has been approved as Member of the Board of GP Reinsurance EAD, Sofia.
• FSC issued permission for merger of Lukoil Garant-Bulgaria AD into CCB Sila AD pension insurance company.
• Prof. Neno Pavlov, Ph.D.  – Deputy Chairman, Head of Social Insurance Supervision Division has issued the regulatory approval to acquire 66% in the local pension insurance company Allianz Bulgaria through related companies.

           In the column Companies News, we read about Client Service newness:

• SMS: "Your claim is ready! You are welcome to proceed!"

The endless hassle and inconvenience related to payment of claims are about to finish. The Insurance Company Bul Ins AD implemented an innovation Claims System with SMS messaging solution for claims payable to clients.

• Karoll Standard offers Financial Risk product

The Insurance Broker Karoll Standard has launched on the Bulgarian market the “Financial Risks” insurance product. Companies, whose partners are both business entities and state institutions, could use it.

Subject of insurance are payments under contracts for sale of goods or provision of services and with deferred payment provisions. The product is available all the same for trade on Bulgarian and international markets.

On page 4 we find the interview of Slavimir Genchev with Petar Chobanov, Ph.D. – Chairman of the Financial Supervision Commission.

Although the FY 2009 was very difficult and offered many challenges for all of the insurers, it is considered relatively good for the insurance business, Mr. Chobanov shared. The Regulator carried out early measures to mitigate the negative impact of the crisis. FSC actively participates in the consultations for amendment of the regulations at European level. The deadline for implementation of Solvency II Framework Directive is 31 October 2012 and Bulgaria as Member State is expected to amend the national law to comply with the Directive with effect from 1 November 2012.

Mr. Chobanov answered the question: «What are your forecasts for the non-banking sector development in 2010? » this way:

“I hope that in 2010 we will succeed to overcome the decline in the economic activity and to report positive, even small, figures of economic growth.

We will keep working towards establishment of conditions for effective market development, administrative burden reduction and safeguarding financial stability.”

On page 6, in the column Analyses: Voluntary Health Insurance we reflect the report, prepared by Competition Protection Commission – Voluntary Health Insurance Sector Analysis.

By Decision № 1390/17.12.2009 , the Competition Protection Commission carried Sector Analysis of the Completive Environment on the National Voluntary Insurance Market for the period 2007 – first half of 2009. The analysis is aimed to provide an overall picture of the voluntary health insurance market, status and trends for development of this market, to explore the competitiveness between the providers of health insurance services, market entry barriers, market status and share of the main participants, etc.

On the same page Zornitsa Slavova from Market Economy Institute, is looking for the answer of the question „Healthcare Reform: Is it ready to start?”  According to the author, „the problem here is that the coverage of the state’s stake is completely unclear, while its quality is unsatisfactory. This raises the issue about the participation of the private sector, i.e. the penetration of the voluntary health insurance in practice to be effected at the expense of the state insurance.  Both the international experience and the common sense proved this to be the right reform required by our healthcare system”.

On pages 8,14 and 16 Ileana Stoyanova has developed the Cover Story „Mountain Insurance", with subheading „In the mountain, insurance means security”.  This insurance product has been launched in 1999 and is an alternative of the expensive payment for Mountain Rescue Service, which is mandatory since 2000. This product provides coverage during mountain sports and tourism activities, including the use of ski facilities, as far as the National Health Insurance Fund does not cover such expenses. The product is offered in two options – individual and group, while the prices differ and are considerably lower for groups over 30 persons.

The product is licensed only by few companies – insurance company UNIQA Life AD (since the end of 1999), “QBE” (since 2002), DZI_General Insurance AD (since 2003), and HDI Insurance (since 2003), as an item in the Health Insurance Products List. Could be purchase even at the Mountain Rescue Service bases. The Cover Story provides detailed information about the offers of the offers of the insurance companies for this product.

On page 9 we carry the continuation (from issue n^o1/2010)  of the materials from the Discussion forum on the topic – “Financial Literacy of Consumers, how it influences the market of financial services and what are the possibilities for improvements”, which was held on 4 December 2009, at the VUZF University campus. Invited participants in the discussion were
Lyubomir Hristov, Chairman of the Institute of the Certified Financial Consultants; Ivo Seizov, Executive director of Bulbrokers; Pavel Karlev, General Secretary of the Federation of consumers in Bulgaria; Mario Kamenov, Director of Center for Continuing and Vocational Education and Tsvetana Targovska, VIP Academy. They delivered reports.

Moderators of both panels of the forum were Apostol Apostolov and Dr. Irena Misheva, Ph.D.

 The author of the publication, Yoanna Stefanova, has selected the witty heading “The emanation of the human greed and the price thereof”. The main conclusions are:

• The people in our country are well acquainted with  the ATMs (Cash Machines), bank accounts, credit cards, credits and term deposits;
• 43,48% answered that they have never used insurance products.

On pages 10 &12, in the regular column Forum, the newspaper reflects round-table, held on 17 December in Sheraton Sofia Hotel Balkan, on theme “Fully Funded Pension Systems Profitability - reality and prospects” and the ХІІ Traditional Annual Meeting of the pension insurance companies, member of Bulgarian Association of Supplementary Pension Security Companies (BAAASPSC).

On pages 11 and 15 , in the same column, Forum, under the heading “Looking beyond the crisis”, we continue publishing the materials from the VIII^-th National conference with international participation “Insurance and Social Security in the Conditions of the Global Financial and Economic Crisis – solutions for Bulgaria and European Union. The conference was held on 11- 12 June, 2009, at the building of  the Higher School of Insurance and Finance-VUZF. On these two days the representatives of both insurance and social insurance business, of the State Financial Regulator and Scientific Circle, debated the themes which are of great importance for the Bulgarian society. In this issue, we publish the report “Controlling of the Insurance Results Under the Conditions of Financial Crisis”, delivered by Dr. Mina Ivanova Kirova, Ph.D.

We finish our overview with the column Look back, Look forth, where we carry the interview with Tsvetanka Krumova, CEO, Armeets AD insurance company,  - page 24.

 „If we sail only smooth waters, we’d never cross rough seas”, Ms. Krumova shared.