Legal and Regulatory Framework of Insurance and Intermediation
The statutory architecture
Bulgarian insurance law is codified in the Insurance Code (Кодекс за застраховането, KZ), which transposes the Solvency II and Insurance Distribution Directive frameworks. A candidate must be able to separate three layers: (a) the Insurance Code - licensing, capital, contract rules, intermediation; (b) subordinate ordinances of the Financial Supervision Commission (КФН/FSC) - e.g. on professional qualification and on intermediation disclosures; and (c) directly applicable EU regulations such as the PRIIPs Regulation and the sanctions regimes.
Supervision and market access
Insurers and reinsurers may only operate under an FSC licence; brokers and agents must be registered with the FSC. Brokers act on behalf of the client, agents on behalf of one or more insurers - a distinction the exam tests repeatedly. The FSC supervises solvency, market conduct and intermediation, may conduct on-site inspections, impose measures, and withdraw licences. The Guarantee Fund protects policyholders of insolvent non-life insurers (and motor liability claims); the Life Insurance Guarantee Fund covers life policyholders. Know the difference: motor third-party liability claims are handled through the Guarantee Fund, while the insurer-insolvency protection has statutory caps.
Traps
Questions often conflate licensing with registration, or attribute prudential supervision to the wrong body (the FSC, not the Ministry of Finance or the Bulgarian National Bank, supervises insurers). Another trap: EU/EEA insurers may operate in Bulgaria under freedom of establishment or freedom to provide services without a Bulgarian licence, but must notify their home supervisor. Cross-border brokers likewise operate under notification, not a Bulgarian licence.
Rule of thumb
“Who acts for whom?” - if the intermediary represents the client, it is a broker (FSC-registered); if it represents the insurer, it is an agent. Supervision always flows from the FSC unless a specific EU regulation says otherwise.