Thousands of Romanians have RCA insured cars with a Bulgarian company that has just lost its license. ASF is awaiting instructions from Bulgaria regarding the payment of damages

On Tuesday, the Financial Supervisory Commission (FSC) in Bulgaria withdrew the operating authorization of DallBogg insurer, a company with which Romanians have insured RCA for over 200,000 cars until July 1, 2025, when its activity was suspended due to problems with the payment of claims.

“In Romania there are currently approximately 16,000 cars with RCA insurance at DallBogg, which will expire by the end of June,” Sorin Mititelu, the vice-president of ASF, told HotNews that he is now waiting for instructions from Bulgaria on how the claims will be paid.

“The detailed instructions will be communicated by the FSC, and when they are received by the ASF they will also be communicated to the insured in Romania”, stated the vice-president of the ASF when asked where the DallBogg claimants in Romania can contact.

The Financial Supervisory Authority (ASF) informed on Tuesday that the similar authority in Bulgaria decided, today, to withdraw the operating authorization of the insurance company DallBogg Life and Health AD, which carried out activity on the territory of Romania based on the right to free provision of services (Freedom of Services – FoS).

For more details on the decision of the Bulgarian authority and useful information for policyholders, the ASF only indicated a link to a text in Bulgarian published by the similar authority in Bulgaria.

“The Financial Supervisory Authority continues to monitor the developments related to this situation and will inform the public about any relevant element to protect the rights of the insured and policy beneficiaries”, the ASF press release also states.

Compensation is provided by the Bulgarian Guarantee Fund

According to the information on the website of the Bulgarian authority, after the revocation of the DallBogg license, the payment of RCA compensation is guaranteed by the Bulgarian Guarantee Fund. The same happened in Romania, when after the withdrawal of the licenses of City Insurance and Euroins, the management of the companies and the payment of claims were taken over by the Guarantee Fund of the Insured (FGA).

The Bulgarian authority has a series of questions and answers related to the withdrawal of the DallBogg license, one of which is the following:

• “I have suffered damage due to a driver insured with DallBogg. Can I submit the claim directly to the national compensation or guarantee body in my country?”

The answer of the Bulgarian authority is affirmative.

• “Yes. If you are a resident of a member state of the European Union or the European Economic Area, you can apply directly to the competent national authority for motor liability insurance in your country. The relevant authority will carry out the necessary exchange of information with the Bulgarian Guarantee Fund and process your application in accordance with the applicable national legislation.”

However, the guarantee schemes in Bulgaria and Romania are not identical, and the mechanism for taking over and managing claims between the two guarantee schemes is not yet activated, according to HotNews information.

In other words, if you are hit in traffic by a driver who has an RCA with DallBogg, you cannot currently claim compensation from the Insured Guarantee Fund (FGA), which in turn can claim from the similar body in Bulgaria.

The Financial Supervisory Authority (FSA) is expected to come up with precise details on the payment of damages as soon as it receives official information from the similar authority in Bulgaria.

What irregularities DallBogg has committed

The Financial Supervisory Commission (FSC) in Bulgaria explains in the statement sent on Tuesday that the reasons for withdrawing the DallBogg company's operating authorization.

The insurer did not comply with the minimum capital requirement under the Solvency II regime, which is why the Commission asked it to present a realistic short-term plan for restoring its solvency. The plan presented by the company was considered inadequate to restore the insurer's solvency and was refused by the FSC.

The Commission claims that the insurer DallBogg has committed multiple serious or systematic infringements in its operation in the EU internal market and in the Green Card system.

“Information regarding these violations was received from the national supervisory authorities in Italy, Poland, Romania, Greece and Spain, as well as from the European Insurance and Occupational Pensions Authority (EIOPA), which showed that the insurer violated the applicable legislation over a long period of time in the settlement of claims, the payment of insurance benefits and the handling of complaints from users of insurance services. Several administrative enforcement measures were imposed for these violations both by FSC, as well as by other national supervisory authorities, but they did not lead to a correction of the insurer's conduct on the market, which is incompatible with the rules of the EU internal market”, the FSC decision states.

Last but not least, the FSC also accuses that “the insurer unlawfully refused to pay the due and liquid monetary obligations established on the basis and in the amount of which there were final judgments. This non-performance was established both on the basis of information received from the national supervisory authorities of other member states and on the basis of consumer complaints submitted directly to the Commission.”

DallBogg could no longer sell RCA in Romania from July 1, 2025

ASF has forbidden the company DallBogg Life and Health AD, the largest Bulgarian insurer, to make insurance contracts on the territory of Romania, starting from October 1, 2025, as announced by Profit.ro. Dallbogg had reached more than 200,000 customers on RCA in just a few months and controlled up to 3% of the market by having the lowest prices charged, according to Economica.net.

In response, Dallbogg categorized the ASF decision as “a disproportionate sanction in relation to the seriousness of the alleged violation”.

The company's activity was already restricted from July 1, but this restriction was to expire on October 1. The temporary restriction measure had been adopted by the supervisory authority in Bulgaria, as the competent authority of origin, considering that the company was active on the Romanian market under the regime of free provision of services.