February 3 (SeeNews) - The review of the assets of Bulgaria's pension funds and the balance sheets of the insurance and reinsurance companies, as well as the stress tests of insurers and reinsurers showed that the country's insurance and pension insurance sectors are stable, the country's financial regulator said on Friday.
The Bulgarian insurance sector remained above 100% of the capital requirements, the Financial Supervision Commission (FSC) said in a statement on its website.
"The Insurance Balance Sheet Review shows an aggregated Solvency Capital requirement (SCR) ratio of 154% and an aggregated Minimum Capital requirement (MCR) ratio of 308% for the solo entities before the impact of the consistency procedures," the regulator said.
"After the consistency checks performed by the project manager, the aggregated Solvency Capital Ratio (SCR) is 157% and the aggregated Minimum Capital Ratio (MCR) is 313% for solo entities, SCR for Non- Life being 147% and MCR 333% while for Life sector SCR was 235% and MCR was 238%, groups/sub groups SCR standing at 107% and MCR 187%, all above the prudential requirements," it added.
For thirteen companies, the total available own funds to cover SCR and/or MCR as at June 30 was insufficient, the regulator also said. Those companies had a total MCR deficit of 25 million levs ($13.7 million/12.8 million euro), and total SCR of 50 million levs.
"It should be however noted, that these deficits are relatively small to the capital requirements and the available own funds of the insurance sector – the aggregate Solvency Capital Requirement is 1.2 billion levs and the aggregate own funds available to cover it is 1.9 billion levs," the regulator commented.
FSC also said that after some of the insurers that werefound to have a deficit took steps to increase their own funds to the required level the SCR deficit has been narrowed to 17 million levs and the MCR deficit has been cut to 22 million levs to present date.
The regulator also said it will impose recovery follow-up actions on five insurance companies, which jointly have a market share of 1.49% in the market premium income. They will have three months to raise their own funds to cover their MCR, and another three months to cover their SCR. Two more insurers will have to present to the regulator progress reports setting out measures taken and progress made to meet the SCR by the end of 2017.
The regulator also noted that the supplementary pension insurance companies meet the regulatory requirements and the sector is stable.
The pension funds’ assets review and insurance balance sheet review were performed between July 15 and the end of January. The information on the results of the reviews was provided by the independent external reviewers and was summarized by international consulting company Ernst&Young.
(1 euro = 1.95583 levs)