EU insurance agency can be set up via one of the following two formations in Bulgaria – an insurance broker or an insurance agent. These two types of insurance intermediaries are legally defined in Bulgarian Insurance Code in accordance with current EU legislation.

The figure of EU insurance broker registered in Bulgaria includes more options for independent work with many insurance companies and for that reason the requirements for its registration are stricter. They differ from the requirements imposed to the insurance agents. The most specific requirements imposed to Bulgarian insurance brokers are connected to the financial security and financial stability of the broker. First of all the broker must permanently provide the obligatory Professional Liability insurance valid on the territory of the entire European Union. The minimum insured amount shall be at least BGN 2.2 million for each insured event or BGN 3.3 million for all the insured events for one year. The second requirement relates to the financial stability of the broker. According to Bulgarian Insurance Code the performance of the obligations of the broker shall be secured by one of the following means:

1. By maintaining personal financial funds in amount of 4 % of the total value of the insurance premiums under insurance agreements concluded throughout the previous year but not less than BGN 33 606 or
2. By opening a special clients bank account where all the insurance premiums or insurance compensations shall be transferred to.

Except for the above listed requirements there are some other important conditions that shall be met. Special professional requirements are imposed to insurance broker’s representatives and to the management bodies of insurance brokerage companies. They are as follows:

1. Certificate of higher education
2. Professional experience or successfully passed professional exam
3. Clean criminal record
4. Entitlement to occupy materially responsible positions
5. Not to have been declared insolvent

The registration process of EU insurance brokers commences with filing an application and finishes with registration of the respective insurance broker with the relevant Bulgarian Financial Supervision Commission (FSC) register. Special documents shall be enclosed to the application. The Commission shall come up with a decision within 1 month. If any issues with the application is found, at least 15 days should be given to the applicant to fix all issues with the documentation. The government fees are BGN 7500 for registration with the Commission and BGN 200 for a certificate.

The other possible option to provide insurance intermediary services in the entire EU is by registering an insurance agent in Bulgaria. The main difference between the figures of the insurance agent and the insurance broker is the fact that the insurance agent can represent only one insurer or reinsurer. There are a few exception to the rule though. Insurance agents shall meet lower professional requirements. Firstly, the requirement for higher education is lowered down to high school education. The requirements for lack of insolvency and Professional Liability insurance are the same as these for insurance brokers with the exception that any insurance company can accept to bear all the responsibility for its agent’s actions and thus the requirement for professional insurance shall be deemed met. Where an insurance company authorizes any of its agents to operate with its own bank accounts, the requirement for opening a special clients bank account shall also be deemed met. And finally, unlike insurance brokers which apply before the Commission personally, the registration of an insurance agent with the FSC is undertaken by an insurance company which interests the agent represents.

And last but not least EU investors should bear in mind that both insurance brokers and insurance agents that have been registered in Bulgaria can perform their professional services on the territory of the entire European Union. In this case no additional licensing is required but there is an informative procedure for providing services in other EU member states which takes no more than a month.