Cyprus based Olympic Insurance bankruptcy left 200,000 Bulgarian clients without MTPL insurance policies and beheaded the insurance market watchdog

Ralitsa AGAIN-GURI, deputy head of the Bulgarian Financial Supervision Commission (FSC) resigned in the wake of the Olympic insurance company bankruptcy scandal. Vladimir SAVOV, a FSC member, will temporary take over her tasks until a new appointment will be approved by the Parliament.

Olympic, owned by Luxembourg's Hispakol S.A., is registered in Cyprus and operated on the Bulgarian market based on the EU freedom of establishment rule. The company had an estimated 9% market share on the MTPL insurance segment in Bulgaria, with GWP worth about BGN 9.35 million, a market weight gained especially thanks to the lower than the market average prices offered to customers. Despite its significant market share, the company was not subjected to the Bulgarian insurance authority and never paid into the Bulgarian insurance guarantee fund. According to Focus News Agency reports, 197,000 policies were terminated on August 17. AGAIN-GURI said the indemnities due under terminated policies were secured through the guarantee funds. For the other customers, the guarantee fund system, the Bulgarian and Cypriot laws provide for no compensation. Those people may recover their money in the liquidation process, AGAIN-GURI said.

Cyprus' Insurance Companies Control Service, the division of the ministry of finance responsible for insurance companies ordered the liquidation of Olympic last week, after having barred the company from entering into new contracts in May, citing issues of capital adequacy. The Bulgarian Financial Supervision Commission (KFN) followed suit and prohibited Olympic from signing new policies as of May 10. Yet, it seems that Ralitsa AGAIN, as the deputy chairperson in charge with the insurance supervision failed to properly inform both her fellow colleagues in the KFN and the Governmental institutions interested in the matter about the potential threat posed by the Olympic difficult situation on the Bulgarian market.

"No written signals were presented, representing analysis and warnings about the possible risks associated with the situation around the Olympic Club - Cyprus. As FSC Deputy Chairperson in charge of the Insurance Supervision Division, Ralitsa AGAIN-GURI never warned the other members of the FSC and / or the Chairman of the Committee about possible risks regarding the bankruptcy of Olympic Club - Cyprus. No analysis and assessment of the possible adverse effects of the bankruptcy of the Cypriot company was provided. A fact-based version of the "Olympic" - Cyprus was only uploaded to the FSC's filing system on Friday, August 17, 2018. The FSC has so far not had the report that Ralitsa AGAIN-GURI presented to the National Assembly," a press release posted on the KFN website states.

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