IV Azerbaijan International Insurance Forum (AIIF)

1. IV Azerbaijan International Insurance Forum (AIIF) Voluntary Health Insurance in Bulgaria RoumenGalabinov

2. Voluntary Health Insurance inBulgaria • Following the adoption of the Health Insurance Law in Bulgaria (1999), which provided the legal framework for the development of the voluntary health insurance, several health insurance funds had been established. • Bulgaria had two licensed voluntary health insurance funds in 2001; in 2003 their number grew to six; and in 2013 this number stands over twenty. • Despite the increased number of funds in recent years, their share of healthcare spending stayed at 1.5%, which is below European average.

3. Voluntary Health Insurance inBulgaria • The main challenges to voluntary health insurance are related to: • Honesty, loyalty, transparency and heightened social sensitivity to the clients needs; • Strict knowledge of legislation, regulatory mechanisms and requirements concerning different forms of insurance; • Individualized marketing and client servicing; • Development of forms and models increasing the motivation for inclusion in insurance schemes; • Provision of measures for safeguarding the clients interests – security for the invested funds, collected information, etc.

4. Voluntary Health Insurance inBulgaria • Perfect knowledge of the theory and practice of insurance relations, the forms of insurance, the different methods and models; • Provision of clear, accessible and understandable information regarding the insurance relations; • Knowledge of the options for meeting the different individual or company insurance problems and needs; • Transformation of the “service seller” role to the “personal consultant and counselor” role for all involved in this business; • Introduction of innovations – organizational, informational and others focused on the client.

5. Voluntary Health Insurance inBulgaria • The market for voluntary (private) health insurance funds in Bulgaria is growing in recent years, but with some unfavorable features: • Unclear packages of offered services; • Supply of services identical to those offered by mandatory public insurance; • Low share of total healthcare spending; • Ambiguity concerning the type of insurance offered – additional, replacement or supplementary; • Lack of motivation for inclusion among the general population (fear of financial pyramids); • Predominantly corporate based insurance.

6. Voluntary Health Insurance inBulgaria • Since September 2012 new rules governing voluntary health insurance have been introduced. • A requirement for voluntary health insurance to be provided by insurers (licensed under the Insurance Code) instead of by health insurance companies (licensed under the Health Insurance Act). • A deadline of 6 August 2013 for existing health insurance companies to bring their activities into compliance with the Insurance Code and to become licensed for the relevant classes of insurance. Their current licences will cease to be valid from 7 August 2013. • The changes will affect 19 health insurance companies (according to the data from the FSC's public register). Instead of obtaining an insurance license, they could close, or merge with or transfer their portfolios to an existing insurer.- existing voluntary health insurance agreements will remain valid until the earlier of their expiry or 7 August 2013.

7. Voluntary Health Insurance inBulgaria • A new 'Health (medical) insurance' section has been added to the Insurance Code. • This requires medical insurance agreements to cover risks resulting from sickness or accident (i.e. the expenses for specified medical products and services), and also permits them to cover expenses for preventative measures, pregnancy and birth, transport, specialised or palliative care etc. This class of insurance can be for an unlimited term, in which case rising of the premium to reflect the ageing and declining health of the insured is not allowed. • Permanent health insurance, covering loss of income due to sickness or accidental injury, continues to exist either as a stand-alone policy or as part of the health (medical) insurance cover.

8. Voluntary Health Insurance inBulgaria • Insurers licensed to provide insurance for sickness and/or accident (general insurance classes) can be licensed for life insurance as well. • Only insurers licensed to provide insurance for sickness (or sickness and accident) can include in their company names all or some of the words "voluntary", "health" and "insurance" (in Bulgarian "осигуряване") . • Fees for visiting the doctor or dentist or spending a night in hospital (for up to 10 days a year) will be set by decree of the Council of Ministers instead of being based on the minimum wage. Current fee levels will apply until the first such decree. • - Compulsory health insurance contributions may not be imposed for periods when the individual is covered by the EU health insurance scheme (and has given advance notice of this to the National Revenue Agency).

9. Voluntary Health Insurance inBulgaria • According to the Health insurance reform Insurance companies will take action on voluntary health insurance. • The Voluntary Health Insurance companies have to be reorganized into Insurance companies. • The project expects the insurance companies to provide the services of the voluntary health insurance companies. • For this purpose they should be allowed to offer Sickness or Accident Insurances. • Upon request, the current companies for voluntary health insurances could obtain a license for offering other types of • insurance. • According to the Bill, life insurance companies will be also able to provide health insurance if they obtain additional license for Accident and/or Sickness insurance.

10. Voluntary Health Insurance inBulgaria Thank you!