XPRIMM: From the Guarantee Fund’s perspective, what have been the most relevant developments in Bulgaria’s MTPL market over the past year, in terms of insurance coverage, claims activity and market functioning? What trends do you expect to shape the market in 2027?

Maxim Kolev: It has been an eventful year for Bulgaria’s MTPL market, with several significant developments. One of the most significant was the end of the monitoring procedure imposed on the Bulgarian Green Card Bureau by the Council of Bureaux. As a result, the common reinsurance contract for Bulgarian MTPL insurers is no longer required.

Another major development was the withdrawal of the insurance license of DallBogg: Life and Health in June 2026 and the appointment of quaestors by the Bulgarian supervisory authority.

At the same time, important changes are taking place in the regulatory framework for MTPL insurance. From 1 October, a new methodology for assessing material damage to motor vehicles comes into force, which will increase the minimum amounts paid in MTPL claims.

The regulatory framework for the bonus-malus system has also been adopted, with the Guarantee Fund playing a central role in providing insurers with vehicle claims history data. Insurers will use this information to develop their own assessment systems, making the implementation of bonus-malus one of the important developments for the market going forward.

XPRIMM: How has the level of uninsured driving evolved in Bulgaria in recent years? What are the main challenges in further improving MTPL coverage and compliance?

M.K.: Bulgaria has achieved a relatively high level of MTPL coverage in recent years. This is a result of a combination of legislative measures and coordinated efforts by the Ministry of Interior and the Guarantee Fund to improve compliance and identify vehicles without valid insurance.

Several measures have been introduced over the years, with one of the most recent developments being the involvement of the national TOLL system in MTPL policy checks. This significantly expands the capacity to identify potentially uninsured vehicles across the national road network. BG Toll operates 295 stationary cameras mounted on control gantries, while enforcement by the National Toll Administration is complemented by 105 mobile enforcement vehicles equipped with cameras capable of reading vehicle registration plates while in motion. The integration of this infrastructure into MTPL checks adds another layer to the existing mechanisms for maintaining a high level of insurance coverage.

XPRIMM: The Guarantee Fund manages extensive information related to compulsory motor insurance and claims. How is digitalization changing the Fund’s activity, and what further developments are planned in terms of data exchange, automation and services for insurers and policyholders?

M.K.: The Guarantee Fund plays a significant role in the Bulgarian insurance market, including through the information systems it maintains for MTPL policies and claims. We are currently working on a major upgrade of these systems to improve their performance, facilitate data exchange and support the further digitalization of the sector.

The implementation of the bonus-malus framework is an important part of this process. A key element is the development of new functionalities within the Guarantee Fund’s systems that will give insurers automated electronic access to the relevant claims history. This will allow the information to be retrieved directly from the Fund’s registers and used by insurers in their own risk assessment systems.

The new functionalities will also support digital services for policyholders, including the centralized issuance of claims-history certificates. Overall, the objective is to make the exchange and use of insurance data more efficient for both insurers and consumers.

XPRIMM: Cross-border motor insurance has become increasingly important as Bulgarian insurers expand their activity in other European markets. What challenges does this create for the Guarantee Fund and for cooperation within the Green Card and EU compensation mechanisms?

M.K.: Cross-border motor insurance inevitably requires close cooperation between the institutions and compensation bodies in the different countries involved, particularly when claims need to be handled across jurisdictions.

The revised EU Motor Insurance Directive has added another important dimension to this cooperation by introducing a framework for the protection of injured parties when an insurer can no longer meet its obligations. In implementing the Directive, Bulgaria has provided for the Guarantee Fund to assume responsibility for claims from the moment an insurer’s license is withdrawn, rather than from the moment of insolvency, as is the case in a number of other Member States.

In cross-border insolvency cases, this requires close cooperation between the Guarantee Fund and the compensation bodies in the Member States concerned. Under the EU framework, injured parties can address their claims to the compensation body in their country of residence, while the national bodies cooperate on claims handling and reimbursement.

XPRIMM: Recent developments involving individual market players have again highlighted the importance of mechanisms protecting policyholders and injured parties when an insurer faces difficulties. Without commenting on any specific company, are Bulgaria’s current guarantee and compensation arrangements sufficiently robust, and are there lessons that could help strengthen the system further?

M.K.: The Bulgarian framework provides for the Guarantee Fund to step in as an Insolvency Body from the moment an insurer’s license is withdrawn. This means that the protection mechanism is activated at an early stage, without having to wait for the insurer to be declared insolvent.

The main challenge at this stage lies in the cross-border application of the new EU framework. The Motor Insurance Directive has been implemented through different national arrangements across Member States, and there is still limited practical experience with how these mechanisms interact in cross-border insolvency cases. We are therefore working closely with the relevant bodies in the other Member States concerned to establish effective arrangements for claims handling and ensure that the interests of injured parties are protected.

XPRIMM: Beyond its traditional role in MTPL, how is the Guarantee Fund contributing to the functioning and stability of other segments of the Bulgarian insurance market? Are there new responsibilities or initiatives that could broaden its role in the future?

M.K.: One area that could broaden the Guarantee Fund’s role in the future is the implementation of the Insurance Recovery and Resolution Directive (IRRD). Work is currently underway on its transposition into Bulgarian legislation, which will establish a new framework for dealing with insurance undertakings in financial difficulties.

The Guarantee Fund is expected to have a role within this framework, although the precise responsibilities will depend on the forthcoming legislative changes. At this stage, it is therefore too early to comment on the scope of the Fund’s future involvement.

Interview conducted by Daniela Ghetu