Notice regarding the conversion to euro and provision of information thereof to the consumers of insurance services, for the protection of their interests in relation of the adoption of the euro in the Republic of Bulgaria

The date of introduction of the euro in the Republic of Bulgaria shall be the date determined with a Decision of the Council of the European Union for adoption of the euro by the Republic of Bulgaria, adopted in accordance with Art. 140(2) of the Treaty on the Functioning of the European Union, hereinafter referred to as the “Decision to adopt the euro”, and the Council Regulation of the European Union, adopted in accordance with Art. 140(3) of the Treaty on the Functioning of the European Union. In effect from this date the euro will become the official national currency and legal tender in the Republic of Bulgaria.

In light of this, in order to assist the users (consumers) of insurance services and make the transition to the new currency easy, clear and understandable for them, hereby we provide information about the rules to be observed by insurers in the conversion from levs to euro of the monetary amounts specified in all documents provided to the consumers.

Currency conversion

With the adoption of the euro as the national currency in the Republic of Bulgaria, insurance companies shall convert from levs to euro the prices of insurance services, as well as any other monetary values concerning insurance relations. This change of the currency from levs to euro is referred to as currency conversion.

Insurers are obliged to carry out the currency conversion by applying the official exchange rate of the lev against the euro which will be specified in the decision to adopt the euro. For the conversion to euro, the amounts previously stated in levs will be divided by the full six-digit numerical value of the official exchange rate. The resulting amount in euro will be rounded to two decimal places, on the basis of the third decimal place, in the following manner:  

• if the third decimal place is less than five, the second decimal place shall remain unchanged;
• if the third decimal place is equal to or greater than five, the second decimal place shall be increased by one.

It is important to note that the currency conversion of prices and other amounts from levs to euro may not place consumers in a less favorable financial position than if the euro had not been adopted. This means that the currency conversion by itself will not result in an increase of the prices of insurance services.

All consumers of insurance services shall have the right, for a period of one year after the date of introduction of the euro, to receive on request from the insurer with whom they have or have had insurance relations as at that date, information about the monetary value in levs of their property rights and/or obligations. The insurer will be obliged to provide such information without charge within 7 days of the request.

Dual display of prices in levs and euro

During a period beginning one month after the date of effect of the decision for adoption of the euro and ending 12 months after the date of introduction of the euro, insurance companies will provide dual price display in levs and in euro. This means that during this period insurers will display both in euro and levs the final amount charged to consumers for insurance services

This dual currency display shall be mandatory only with respect to price information intended for and provided to consumers.

During the dual display period insurers shall be obliged to display in euro and in levs:

• the total final amount payable by the insuring person under an insurance contract,
• the installment amounts, in case of deferred payment of contracts.

If an insurer provides insurance services other than those generally covered under an insurance contract, then during the period of double currency display the total prices for such services shall also be displayed both in euro and in levs. This information should be publicly available in the offices and on the websites of the insurer, and provided free of charge on paper or on another durable medium upon request from a customer

No dual currency display is required for the charged taxes, fees and contributions to the Guarantee Fund, or any other converted monetary amounts different than the price of the insurance service, of which the insurer shall inform the consumer:

• before conclusion of an insurance contract, and/or
• upon conclusion of an insurance contract, and/or
• in relation to the settlement of insurance claims and indemnities.

For the purposes of the dual display, the amounts in euro and in levs should be placed in close proximity to each other, have the same font size, and should be shown in a clear, legible, unambiguous and easy to understand manner as not to mislead the consumers. The name of the respective currency, its symbol or easily recognizable abbreviation should be shown next to each amount, in euro and in levs.

During the period of dual display, the total final amount of the price for the insurance service must be indicated in euros and in levs also on any issued receipt or other payment document, together with the official exchange rate of the lev against the euro.

When commercial announcements and advertisements in audio and video format are broadcast during the dual display period for promotion of insurance services, the prices for insurance services can be stated verbally only in levs until the date of introduction of the euro, and only in euro past that date.

No conversion or dual display will be applied to prices and amounts under insurance products designed and offered directly in euro or in a third currency.

Dual (simultaneous) circulation of the euro and the lev:

During the so-called dual circulation period of the euro and the lev which will last for the first month after the date of introduction of the euro in the Republic of Bulgaria, lev banknotes and coins will continue to be legal tender on the territory of the Republic of Bulgaria.

During this period the insurer may receive cash payment in levs or euro, but any balance (change) returned by the insurer should be in euro entirely. If the insurer's employee handling the payment does not have sufficient cash at the time to return the entire change in euro, then the entire amount of the change shall be returned in levs.

Regarding cash payments during this period, the insurer may refuse to accept more than 50 coins in levs or stotinki.

In case during this period a consumer terminates an insurance service or an insurance contract (when permitted by law) and is entitled to reimbursement from the insurer of an amount paid by the consumer, the insurer will be obliged to repay any such amounts entirely in euro. If the reimbursement is provided in cash and the respective insurer’s employee does not have sufficient cash at the time to reimburse the entire amount in euro, the entire amount shall be reimbursed in levs.

The rules announced in this notice are based on the Law on the introduction of the euro in the Republic of Bulgaria, agreed with the Financial Supervision Commission, and adopted by the professional organization of the Association of Bulgarian Insurers, for use and application by its members.