Bulgarian insurers feel the heat of intercompany debt
Intercompany debt, which is pegged as one of the most severe fallouts of the economic tailspin, is already affecting Bulgarian insurance companies, sector representatives told DNEVNIK.
The comments were prompted by recourse claims under motor third-party liability policies, which many insurers blame on the fact that claims under comprehensive motor policies are higher than those on the third-party liability cover.
Emil ATANASSOV, deputy chair of the Financial Supervision Commission (FSC), said debts on recourse claims do not threaten to shake the financial stability of individual companies or the general market.
Companies' net motor third-party liability debts stood at some EUR 4,5 million or 5 million as at early 2010, according to FSC data. The figure represents roughly 3% of the claims paid under the comprehensive cover for the ten months of 2009 and 6% of the claims paid under the third-party liability cover for the same period.
But sector representatives estimated motor policy debts have spiraled off to EUR 10 million in the past months and a couple of companies have suspended payments in November and December. An unnamed company official said privately that one of the market's largest providers of motor third-party liability policies has run up almost EUR 3,5 million in outstanding claims. LEV Ins, BUL Ins, EUROINS and BULGARSKI Imoti are unofficially touted as the non-payers but all downplayed the claims.
