Insurance Company “Lev Ins” AD informs its clients that the “Date of introduction of the euro” in the Republic of Bulgaria shall be the date specified in the Decision of the Council of the European Union on the adoption of the euro by the Republic of Bulgaria, adopted in accordance with Article 140(2) of the Treaty on the Functioning of the European Union, hereinafter referred to as the “Decision on the adoption of the euro,” and the Council Regulation adopted in accordance with Article 140(3) of the Treaty on the Functioning of the European Union. As of the specified date, the euro shall become the official national currency and legal tender in the Republic of Bulgaria.
In this regard, to facilitate users of insurance services and make the transition to the new currency easy, clear, and understandable, this notice provides information on the rules insurers will follow when converting monetary values from leva to euro indicated in all documents provided to consumers.
Conversion
Upon the adoption of the euro as the national currency in the Republic of Bulgaria, insurers shall convert prices of insurance services and all other monetary values under insurance relationships from leva to euro. The change of the monetary unit from leva to euro is called conversion.
Insurers are obliged to perform this conversion by applying the official exchange rate of the lev to the euro, which will be determined in the decision on the introduction of the euro. During conversion, the previous amount in leva shall be divided by the full six-digit numerical value of the official exchange rate. Then, based on the third digit after the decimal point, the resulting value shall be rounded to the second digit after the decimal point as follows:
When the third digit after the decimal point is less than five, the second digit after the decimal point remains unchanged;
When the third digit after the decimal point is equal to or greater than five, the second digit after the decimal point is increased by one unit.
It is important to note that as a result of the conversion of prices and other values from leva to euro, users of insurance services cannot be placed in a financially less favorable position than they would have been if the euro had not been introduced as the national currency in the country. This means that conversion itself will not lead to an increase in the prices of insurance services.
Each user of insurance services shall have the right, within one year after the date of introduction of the euro, to request from the insurer with whom they have or had insurance relationships as of that date, information regarding the monetary values in leva of their property rights and/or obligations. Insurers are obliged to provide this information free of charge within 7 days of the request.
Dual Display of Prices in Leva and Euro
During the period starting one month after the date of entry into force of the decision to adopt the euro and ending 12 months after the date of introduction of the euro in the Republic of Bulgaria, insurers shall apply dual price indication in euro and in lev.
This means that during the specified period, insurers shall indicate both in euro and in lev the final amount that the user of the insurance service must pay for the service.
Dual indication shall be mandatory only for price information intended for and provided to consumers.
During the period of dual indication, insurers shall mandatorily indicate both in euro and in lev the total amount payable by the policyholder under the insurance contract, as well as the amount of installments in case of payment in installments under the contract.
If an insurer has tariffs for other insurance services different from the conclusion of an insurance contract, then during the period of dual indication it shall also indicate the total price of the services included in these tariffs in both euro and lev, and shall be obliged to disclose this information in its offices and on its website, as well as provide it free of charge on paper or another durable medium upon request by the client.
Taxes and fees, contributions to the Guarantee Fund, as well as other converted monetary values different from the price of the insurance service and for which the consumer receives information from the insurer shall not be subject to mandatory dual indication:
before concluding an insurance contract and/or
upon concluding an insurance contract and/or
in connection with the settlement of claims for damages and compensation under insurance.
When applying dual indication, the amounts in euro and lev must be placed in immediate proximity to each other and written clearly, legibly, unambiguously, and easily understandable, in the same font size and in a way that does not mislead consumers. Each amount in euro and lev must be accompanied by the respective currency name, distinctive sign, or abbreviation allowing easy recognition.
During the period of dual indication, the total final amount of the price of the insurance service must be indicated in euro and lev on the issued fiscal receipt or other document registering the payment, together with the official exchange rate of the lev to the euro.
When during the period of dual indication commercial messages and advertisements are made in audio or video format to encourage the consumption of insurance services, the prices of insurance services may be presented orally only in lev until the date of introduction of the euro, and after that date – only in euro.
Conversion and dual indication shall not apply to prices and monetary amounts under insurance products that are developed and offered directly in euro or in a third currency.
Dual (simultaneous) circulation of euro and lev:
For a period of one month after the date of introduction of the euro in the Republic of Bulgaria, called the period of dual circulation of lev and euro, banknotes and coins in lev shall continue to be legal tender on the territory of the Republic of Bulgaria.
If during this period the insurer receives cash payment in lev or in euro, it shall return the change entirely in euro. If the employee receiving the payment does not have sufficient immediate availability to return the change entirely in euro, it shall be returned entirely in lev.
During this period, when receiving cash payment, the insurer may refuse to accept more than 50 coins in lev, including stotinki.
When during this period a consumer cancels an insurance service or terminates an insurance contract (in cases permitted by law) and is entitled to receive back an amount paid by them, the insurer shall be obliged to return the amounts due entirely in euro. If the amount is returned in cash and the respective employee of the insurer does not have sufficient immediate availability to return the entire amount in euro, the amount shall be returned entirely in lev.
The rules announced in this notice derive from the Law on the Introduction of the Euro in the Republic of Bulgaria, are coordinated with the Financial Supervision Commission, and have been adopted by the industry organization Association of Bulgarian Insurers for use and application by its members.