The Brokerage Insurance Companies Under COVID-19 Framework (The Bulgarian Experience)

Abstract

The history of insurance and insurance mediation in Bulgaria can be divided into four periods - from 1878 to 1946; from 1946 to 1989; from 1989 to 2007; and after the accession of Bulgaria to the EU in 2007. The most significant regulatory at the end of the penultimate period and the last period are related to the establishment of the Financial Supervision Commission (2003), the adoption of the first Insurance Code (2005) of the second, still valid new Insurance Code. The analysis shows that the legislation of insurance intermediation in Bulgaria is undergoing significant development in the direction of improvement and adaptation to evolving and complicating modern market conditions. The most significant trends that are observed are in the direction of explicitly differentiating the functions of brokers and agents; strengthening the requirements for education and qualification of the persons managing and the persons directly carrying out the activity of insurance mediation; development of the licensing and registration regime; subordination of the requirements for brokers and agents and to other categories of persons engaged in mediation (employees of the insurers themselves in direct sales, as well as intermediaries developing insurance mediation as an additional activity). After 2007, all changes are in the direction of synchronization with EU legislation and protection of consumers of insurance products. The most significant features and current challenges of the global and Bulgarian insurance market and in particular of the intermediaries working on it are related to changes in the general economic conditions. Here are added changes in the financial system, regulations, the emergence of new types of risk, changes in the insurance business (digitalization), and the cycle of the insurance market. Among the changes with the most significant impact since 2020 is COVID-19 as a new, global systemic risk with a huge impact on all economic agents and on the value of insurance estimates.