Insurers will have to offer third-party liability cover for periods of less than a year, but no shorter than 30 days, for some vehicles, including motorcycles and campervans. Parliament's economic committee decided this when it approved changes to the Insurance Code at second reading.
The shorter term covers vehicles with temporary or transit registration, where the policy runs for as long as the registration is valid. It also applies to slow-moving road vehicles, self-propelled machines, category L motor vehicles under the Road Traffic Act, including motorcycles, and to caravans and campervans.
Stefan Belchev of Progressive Bulgaria and a group of MPs tabled the wording on the shorter term between the first and second readings. Insurers must follow the rule from the day the changes appear in the State Gazette.
At the meeting, Martin Dimitrov of Democratic Bulgaria asked whether insurers are ready to offer such policies. Plamen Danailov, deputy chair of the Financial Supervision Commission (FSC), who heads its insurance supervision department, said all companies must meet the requirement on the day the changes are published. Those that do not will be held responsible and face penalties.
The FSC will write to insurers to set out the new rules. Danailov said the companies already know about the coming changes.
The changes also affect the Guarantee Fund. The FSC will be able to decide to provide money when funds run short on its own initiative, not only on a proposal from the fund's management board. The aim is a faster response when extra funding is needed.
The rules on insurers' contributions are also becoming clearer. Advance and additional contributions are separated, and there is a clearer basis for calculating advance payments. The FSC will be able to set a different deadline for refunding advance sums paid in excess. The changes aim to make the rules on financial security and on managing the funds the Guarantee Fund runs clearer, and to help it keep enough cash and stay able to pay its debts.
When an insurer loses its licence, the Guarantee Fund, through the Security Fund, will be able to pay in place of the National Bureau of Bulgarian Motor Insurers. This covers damages, interest and costs on insurance claims, and some fees. The payment must be made within seven days of notification.
The changes also allow closer cooperation between the Guarantee Fund and similar bodies, national bureaus and compensation bodies in other EU countries.