August 22, 2018 / 1:30 PM / a year ago

Bulgarian regulator pledges 'every effort' to aid clients of troubled Cypriot insurer

SOFIA, Aug 22 (Reuters) - Bulgaria’s financial regulator said it will “make every effort” to protect clients of Cyprus’ Olympic Insurance Company, whose closure has left 200,000 Bulgarians without car insurance, as it blamed its former head of insurance supervision for the crisis.

The Financial Supervision Commission (KFN) on Wednesday castigated Ralitsa Agayn, who resigned the previous day, for not sounding the alarm earlier on the possible adverse effects of Olympic’s bankruptcy on Bulgarians.

Agayn bowed to pressure from politicians to quit just before Bulgarian legislators interrupted their holidays for an extraordinary parliamentary session on the issue.

“The Financial Supervision Commission assures the affected clients of the Olympic Insurance Company that it will make every effort, within the limits of its legal powers, to protect their interests and to inform them in due time about their rights and procedures for the protection of these rights,” the KFN said.

“Many of the facts, presented to the lawmakers, were absolutely new and unknown to us so far,” it added in a statement whose aim was “to preserve the reputation of KFN as an institution”.

Agayn denied any wrongdoing and defended the KFN’s handling of the case. She said there were 26 complaints against Olympic in 2016 and only seven until May 10 this year, a number she described as “exceptionally small”.

She said that all complaints were dealt with and fines amounting to about 30,000 levs ($17,547.96) were issued for the identified violations of customer service procedures.

The Cypriot insurance regulator appointed a provisional liquidator for Olympic Insurance, which operated in Cyprus and Bulgaria, on Aug. 10, after revoking the company’s insurance licence for failing to meet minimum capital requirements.

The KFN has faced questions over its handling of the case and anger from citizens who have lost their compulsory third-party car liability cover with the company and want compensation.

Agayn said that the Bulgarian Guarantee Fund would cover any damages under the Civil Liability Insurance contracts of the Olympic Company up until May 10.

The KFN named its member Vladimir Savov as temporary replacement for Agayn only a couple of hours after her resignation. ($1 = 1.7096 leva) (Reporting by Angel Krasimirov; Editing by Jan Harvey)

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