Body
InsurTech is composed of the words “insurance” and “technology”. It is used as a collective term for the application of modern technologies in the domain of insurance services.
Digital and mobile brokers: FinTechs belonging to this category mostly act as digital insurance brokers and provide users with an overview of their insurance contracts with their respective conditions. Some FinTechs offer very short-term insurance contracts to cover specific cases which can be concluded often spontaneously via mobile devices. Oftentimes additional consulting services are offered.
Internet of things: FinTechs belonging to this category collect data by measuring for example the driving style of the customers or through wearables the customers wear to consult on, offer and/or manage the customer’s insurances.
Introduction
Attitude of the country towards InsurTech-services
The Insurance sector in Bulgaria is the less digitalized sector among the financial sectors. Nevertheless, the sector is gradually digitalizing with a tendency to continue to do so with even greater dynamics. Insurance intermediaries (mostly insurance brokers) seem to provide the more developed insurance technologies, consumer-wise, including provision of fully digitalized distribution, insurance issuance, premium payment and damage claiming. Insurers seem to be offering a one-spot digital service for some insurance products, including digitalized damage claim service. However, email communication remains the dominant digital claiming channel.
The Bulgarian Insurance Code (IC) appears to be quite conservative – technology-wise. If this conservative legislative approach preserves its rate, the much-needed insurance digitalization might not be developing accordingly any time soon, although it seems that the sector has recognized the need to expand digitalization and thus implicitly rejects this slow digitalization pace.
In the meantime, the most recently proposed amendments to the IC oblige insurers to adopt in-house Bonus-malus systems, opening the possibility to develop further InsurTech behavioral tools and systems.
Digital services for data security, distributors’ information systems integration, accounting and financial purposes, appear to be broadly utilized. With the constant increase of supervision, solvency and security requirements towards the insurers and insurance intermediaries, including with the entry into force of EU DORA Regulation 2022/2554, the InsurTech services will need to develop with even greater speed.
Legal affairs
Obligations and requirements to provide InsurTech-services
InsurTech services are not expressly regulated in Bulgaria. The insurance underwriting and distribution activities are regulated mainly in the IC. Therefore, all such digital activities shall comply with the relevant regulation. Sectorial national regulations such as the Electronic Document and Electronic Trust Services Act, the Electronic Commerce Act, Distance Marketing of Financial Services Act shall be also complied with.
Digital services for in-house purposes shall also provide compliance with GDPR and DORA regulations.