Bulgarian Insurance Broker Qualification Exam flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Insurance Code

The main Bulgarian law governing insurance and reinsurance activities, including licensing, supervision, and intermediation, effective since 2016.

Financial Supervision Commission

The Bulgarian state authority (КФН) responsible for licensing and supervising insurers, brokers, agents, and other financial institutions.

Professional indemnity insurance

Mandatory insurance for brokers covering liability for professional errors, with minimum limits set by the Insurance Code (at least EUR 1.25 million per claim).

Guarantee Fund

A fund protecting policyholders in case of insurer insolvency, covering certain compulsory insurances and life insurance claims.

Policy content requirements

The insurance policy must include parties, risk insured, sum insured, premium, duration, exclusions, and termination conditions to be enforceable.

Duty of disclosure

The applicant must disclose all material circumstances known to them that affect the risk; failure allows the insurer to terminate or reduce liability.

Cooling-off period

A 14-day right to cancel a distance life insurance contract without penalty, starting from conclusion or receipt of policy documents.

Insurable interest

A legal or economic interest in the subject matter of insurance; its absence makes the insurance contract void.

Indemnity principle

In non-life insurance, the insurer compensates actual loss up to the sum insured, not exceeding the value of the loss.

Subrogation

The insurer's right, after paying a claim, to pursue third parties responsible for the loss to recover the amount paid.

Sum insured

The maximum amount the insurer will pay under a non-life policy; it represents the insurer's limit of liability.

Sum assured

The amount payable under a life insurance policy on death or survival, agreed at contract conclusion and not subject to indemnity.

Motor third party liability

Compulsory insurance covering the policyholder's liability for bodily injury or property damage to third parties caused by a motor vehicle.

Casco insurance

Optional motor insurance covering damage to the insured vehicle itself, including collision, theft, fire, and natural disasters.

Agricultural insurance

Insurance covering crops, livestock, and farm property against weather, disease, and other perils; often subsidized by the state.

Cargo insurance

Transport insurance covering goods in transit against loss or damage, often using Institute Cargo Clauses (A, B, C) with varying coverage.

Liability insurance

Insurance covering legal liability for bodily injury or property damage to third parties, compulsory for certain activities like motor and professions.

Risk life insurance

Pure protection life insurance providing a death benefit only, with no savings component and lower premiums.

Endowment insurance

Life insurance combining death protection with savings, paying a sum assured on survival to maturity or on earlier death.

Unit-linked insurance

Life insurance where the policy value is linked to investment fund performance, and the policyholder bears the investment risk.

Annuity

A life insurance product providing periodic payments for a fixed term or for life, often used for retirement income.

Surrender value

The cash value payable if a savings or unit-linked life policy is terminated early, after deducting charges.

Insurance broker

An independent intermediary acting on behalf of the client, must act in the client's best interest and disclose conflicts of interest.

Insurance agent

An intermediary acting on behalf of one or more insurers, representing the insurer in concluding insurance contracts.

IPID

Insurance Product Information Document: a standardized summary of cover, exclusions, and obligations provided to clients before conclusion.

Remuneration disclosure

Intermediaries must disclose to clients, before contract conclusion, whether they receive commission from insurers or fees from clients.

Customer due diligence

AML measure requiring identification and verification of customers and beneficial owners, and understanding the business relationship.

Politically exposed person

An individual entrusted with prominent public functions, requiring enhanced due diligence due to higher money-laundering risk.

Suspicious transaction report

A report filed with the State Agency for National Security (SANS) when an intermediary suspects money laundering or terrorist financing.

Sanctions screening

Checking customers and beneficial owners against EU and UN sanctions lists; assets must be frozen if a match is found.

GDPR compliance

Intermediaries must process personal data lawfully, obtain consent where required, and ensure data security and client rights.

Unfair contract terms

Terms in consumer insurance contracts that cause significant imbalance to the detriment of the consumer are void under consumer protection law.