Bulgaria’s Ruling Party Proposes BGN 20,000 ‘Price of Life’ Insurance Ceiling

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On November 1, at the end of the working day, a text was tabled at the registry of the National Assembly (Bulgarian Parliament), which sets the ceiling on the non-pecuniary damages that insurers pay to relatives after the death of family members in case of a road or other accident and casualty.

The author of the text, Menda Stoyanova, from the ruling Citizens for European Development of Bulgaria (GERB) party has assessed the damages at BGN 20,000 as a maximum of one-off damages for the spouses, children and parents of the deceased, BGN 15,000 for brothers and sisters and BGN 5,000 for other persons as an exception.

The changes are not accompanied with any motivation and come between two readings on the bill for amendments to the Insurance Code.

Up to now, the amount of non-pecuniary damages has been determined by the courts “in fairness”. Case law shows that the “cost of life” varies according to the courts. According to 2010 data from the specialized site Zastrahovatel.com (Insurer), these damages “usually amount to between BGN 25,000 and BGN 30,000. Amounts of BGN 50,000 are rarely awarded, and BGN 70-100,000 in damages are considered a precedent”.

In June 2018, the Supreme Administrative Court issued a rule which extended the group of persons to whom compensation for non-pecuniary damage is to be paid. As a result, in July and August, the insurers jointly raised the price of the Third Party Liability Insurance by about BGN 50 and put on the table the issue of a ceiling on damage payments of BGN 40,000. They threatened to drastically increase the Civil Liability policy to BGN 800 unless a ceiling on payments is introduced. The Association of Victims of Accidents voiced opposition to this as they believe that the “price of life” should not be set by law.

Obviously, the aim of the maneuver with the tacit introduction of an important legislative text is to amend the law without a public debate. It is also obvious that Menda Stoyanova’s proposal is more favorable to insurers, as the proposed “cost of life” is twice lower than their most optimistic expectations.

Here is the text of the proposed changes:

  • 65a. Art. 493a is introduced:

“Art. 493a. Determination of the amount of property and non-pecuniary damage resulting from bodily injury or death:

(1) In the case of bodily injury, the injured party shall be compensated for the material and non-material damages suffered by them;

(2) The Commission, the Ministry of Health and the Ministry of Labor and Social Policy shall adopt a joint regulation for the establishment of a methodology for determining the amount of compensation for material and non-pecuniary damages due to bodily harm to the injured person and for determination of property damages to the injured person as a result of the death of the injured person;

(3) In the event of the death of an injured party, any person hurt as a result of that death shall be entitled to a lump-sum compensation for the non- pecuniary damage suffered, which shall be a determined amount up to:

  1. BGN 20,000 per spouse or a person with whom the deceased was cohabiting at the time of the unlawful injury resulting in the death;
  2. BGN 20,000 per child, including an adopted child;
  3. BGN 20,000 per parent, including an adoptive parent;
  4. BGN 15,000 per brother or sister;
  5. BGN 5,000 to another person, as an exception, because of the emotional relations created with the deceased person at the time of the unlawful injury resulting in the death;

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