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European Commission - Press release

Internal Market: Commission acts to protect policy-holders and to ensure level playing field in the Bulgarian health insurance sector

Brussels, 26 January 2012 - The European Commission has today acted to ensure that Bulgarian voluntary health insurance undertakings are subject to EU insurance rules. The Commission is concerned that the Republic of Bulgaria has failed to apply the First and Third Non-life Insurance Directives (73/239/EEC and 92/49/EEC) to voluntary health insurance undertakings. If these rules are not properly applied there is a risk of insufficient prudential regulation and supervision of the insurance sector. The Bulgarian rules outlined above are liable to deter or impede cross-border investments. In addition, by not applying EU insurance rules to all health insurers, Bulgaria precludes a level playing field on the health insurance market.

The Republic of Bulgaria is also requested to waive restrictions on the free movement of capital, as guaranteed by Article 63 of the Treaty on the Functioning of the European Union (TFEU). The Commission's request to the Republic of Bulgaria takes the form of a reasoned opinion. If the national authorities do not reply satisfactorily within two months, the Commission may refer the matter to the Court of Justice.

What is the aim of the EU rule in question?

Since the 1970s, the EU has adopted several Directives that promote the economic efficiency and integration of the European insurance market. A common legal framework has been built to allow insurers to establish themselves and operate throughout the EU, and to provide their services freely. These rules also include conditions for initial authorisation, on-going prudential supervision, in particular with regard to their overall state of solvency, their technical provisions and assets covering those provisions. The rules also aim to ensure that consumers are protected through the soundness of the insurers.

How is the Republic of Bulgaria not respecting this rule?

The Commission takes the preliminary view that the Bulgarian Health Insurance Act is not in line with the free movement of capital laid down in the Treaty on the Functioning of the European Union (TFEU) and the EU Non-life Insurance Directives.

The Act prescribes that voluntary health insurance undertakings can only invest health insurance reserves and own funds into foreign assets with an approval of the Financial Supervision Commission. In the Commission's view, this obligation impinges on the free movement of capital (Article 63 of the TFEU).

The Commission also maintains that voluntary health insurance undertakings cannot be exempt from the Non-life Insurance Directives and that the Health Insurance Act does not transpose them. Therefore, the Commission upholds that voluntary health insurance undertakings ought to have been fully subjected by Bulgarian law to the requirements of EU non-life insurance legislation, including notably the requirements concerning authorisation, financial supervision, establishment of technical provisions, establishing a solvency margin including the guarantee fund, investment in and matching of assets.

More information


Latest information on infringement proceedings concerning all Member States:

For more information on infringement procedures, see MEMO/12/42

Contacts :

Chantal Hughes (+32 2 296 44 50)

Carmel Dunne (+32 2 299 88 94)

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