The Financial Supervision Commission revoked the insurance license of ZAD "DallBogg: Life and Health" AD.
The reason is systematic violations of the Insurance Code, improper market behavior and a serious risk of insolvency.
The regulator's decision is the final step in a long conflict and a series of supervisory measures. According to the regulator's official reasons, the FSC identified a serious risk that the company would be left without sufficient funds to pay compensation and serve its over 900,000 clients. Market analyses reveal that a large part of the company's assets are invested in illiquid financial instruments of related parties (such as the parent company “Targovska Liga“, the pharmaceutical “Chaikapharma“ and hospitals), which can hardly be sold quickly in a crisis.
The company has not maintained the necessary financial buffers required by law to guarantee future insurance payments. The company's business has grown strongly in foreign markets through cheaper “Third Party Liability“ policies. Before the full revocation of the license, regulators in Poland and Romania, as well as the FSC itself, imposed successive indefinite bans on cross-border activity due to poor market behavior.
Back in April, the FSC imposed a ban on concluding new contracts in Bulgaria and demanded a recovery plan. Since the violations were not eliminated, the most severe administrative sanction was imposed - revocation of the license and initiation of bankruptcy proceedings. The insurer's management categorically rejects the accusations and claims that it has full liquidity. They accuse the FSC of manipulating data and patronizing a cartel, and company employees also organized protests in front of the Council of Ministers demanding the resignation of the regulator's management.
All already concluded insurances (including “Civil Liability“) continue to operate and cover risks until their expiration date. The company does not have the right to conclude new contracts, renew old ones or expand existing coverages. In the event of the bankruptcy of an insurance company, the Guarantee Fund of Insurers in Bulgaria undertakes to pay the compensation due to the injured parties.