National IMPLEMENTING MEASURES (IM) related to the specific Budapest Protocol requirement* Authority: Bulgarian Financial Supervision Commission Article 23 of the Methodology for Peer Review: National implementing measures may include laws (i.e. acts of Parliament) and regulations (i.e. decrees of ministries or rule books of CEIOPS Members), guidelines and circulars of CEIOPS Members (provided that non-compliance with these guidelines and circulars should trigger enforcement action by the CEIOPS Member concerned), rules of self-regulatory organizations, such as industry associations (where applied by a significant part of the industry in a specific Member State and provided that non-compliance with those rules triggers enforcement action by the self-regulatory organization concerned or by the CEIOPS Member), and relevant case law. Internal procedures followed by CEIOPS Members that do not trigger enforcement action are also classified as implementing measures for these purposes. (*Only national measures issued in implementation of the Budapest Protocol, not the measures implementing the Directives) I. Relevant regulation/procedures (general source): Date Title LINK Title amended, SG No. 67/2003) (Promulgated State Gazette, No. 110/17.12.1999, effective 1.01.2000, last amendments SG No. 41/2.06.2009, effective 2.06.2009) Social Insurance Code (SIC) Promulgated, State Gazette No. 8/28.01.2003, effective 1.03.2003, last amendments SG 24/31.03.2009, effective 31.03.2009) Law on the Financial Supervision Commission (LFSC) Adopted by the Financial Supervision Commission acc. to protocol No 3/2.04.2003, last amendments protocol No 23/27.05.2009 Appendix to the form, approved by Decision No 668-POD/17.05.2007 of the Deputy Chairperson of the Commission Regulation for the structure and the activity of the Financial Supervision Commission (RFSC) Guidance for the filling-in of the notification form 1
II. Detailed overview of IM/ question: Question Implementing measures Nr 1 SIC Article 229c Cross-Border Activities of the Pension Insurance (2) Before conclusion of the contract referred to in Paragraph (1), the pension insurance company shall notify the Deputy Chairperson of the Commission in writing of: 1. the host Member State; 2. the business name and the address of the non-resident sponsoring undertaking in the host Member State; 3. the main characteristics of the occupational scheme which is to be managed by the company. notify immediately the pension insurance company, which has submitted 2 SIC Article 229c Cross-Border Activities of the Pension Insurance notify immediately the pension insurance company, which has submitted 4 Guidance for the filling-in of the notification form 7. The information must be submitted in Bulgarian and in the language of the Host Member State. 15 (LFSC) Article 24 Professional Secrecy (1) The information created and obtained by the Commission in connection with performance of its functions and which represents a trading, bank or other secrecy protected by law or whose disclosure would injure the trading interest of supervised persons, shall be a professional secrecy. Professional secrecy shall not be an official secrecy within the meaning of the Protection of Classified Information Act. (LFSC) Article 25 Disclosure of professional secrecy (4) Information representing a professional secrecy may be provided only to the bodies of a Member State performing financial supervision provided that they keep the confidentiality of received information and use it only in connection with performance of their functions: 1. For verification of observance of the requirements for issuance of licences for performance of activity on financial markets, as well as for performance of supervision over performance of this activity; 2. For imposing sanctions; 3. Upon appeal against their acts in an administrative or legal form. 16 (LFSC) Article 24 Professional Secrecy (2) The information created and obtained by the Commission in connection with performance of its functions and which represents a trading, bank or other secrecy protected by law or whose disclosure would injure the trading interest of supervised persons, shall be a professional secrecy. Professional secrecy shall not be an official 2
secrecy within the meaning of the Protection of Classified Information Act. (LFSC) Article 25 Disclosure of professional secrecy (4) Information representing a professional secrecy may be provided only to the bodies of a Member State performing financial supervision provided that they keep the confidentiality of received information and use it only in connection with performance of their functions: 1. For verification of observance of the requirements for issuance of licences for performance of activity on financial markets, as well as for performance of supervision over performance of this activity; 2. For imposing sanctions; 3. Upon appeal against their acts in an administrative or legal form. 17 SIC Article 229c Cross-Border Activities of the Pension Insurance (2) Before conclusion of the contract referred to in Paragraph (1), the pension insurance company shall notify the Deputy Chairperson of the Commission in writing of: 1. the host Member State; 2. the business name and the address of the non-resident sponsoring undertaking in the host Member State; 3. the main characteristics of the occupational scheme which is to be managed by the company. 18 SIC Article 229c Cross-Border Activities of the Pension Insurance (2) Before conclusion of the contract referred to in Paragraph (1), the pension insurance company shall notify the Deputy Chairperson of the Commission in writing of: 1. the host Member State; 2. the business name and the address of the non-resident sponsoring undertaking in the host Member State; 3. the main characteristics of the occupational scheme which is to be managed by the company. 20 RFSC Article 73 (5) In case, after the examination of the circumstances and information under paragraphs 2 and 3, the Deputy Chairperson in charge of Social Insurance Supervision Division decides that the pension insurance company does not meet the requirements of the law for an activity in another Member State and/or does not possess the necessary organization, financial or human resources for management of the specific occupational scheme, he informs the sponsoring undertaking and, if considers appropriate, the competent authority of the Member State. 21 RFSC Article 73 (5) In case, after the examination of the circumstances and information under paragraphs 2 and 3, the Deputy Chairperson in charge of Social Insurance Supervision Division decides that the pension insurance company does not meet the requirements of the law for an activity in another Member State and/or does not possess the necessary organization, financial or human resources for management of the specific occupational scheme, he informs the sponsoring undertaking and, if considers appropriate, the competent authority of the Member State. 22 SIC Article 229c Cross-Border Activities of the Pension Insurance 3
notify immediately the pension insurance company, which has submitted 23 SIC Article 229c Cross-Border Activities of the Pension Insurance notify immediately the pension insurance company, which has submitted 24 SIC Article 229c Cross-Border Activities of the Pension Insurance notify immediately the pension insurance company, which has submitted 25 RFSC Article 74 (1) On receiving a notification from a Member State s competent supervisory authority that a non-resident institution, located in the territory of that state, intends to manage an occupational scheme of a Bulgarian sponsoring undertaking, the Deputy Chairperson of the Commission in charge of Social Insurance Supervision Division shall: 1. notify immediately the Member State s supervisory authority about its receipt; 2. examine the main characteristics of the occupational scheme and determine the relevant to it provisions of the Bulgarian social and labour legislation, as well as all applicable to the case provisions, regarding the investment activity and the disclosure of information; 3. if necessary, demand additional information from the Member State s supervisory authority about the circumstances, related to the non-resident institution and the main characteristics of the occupational scheme; 4. within 2 months from receiving the notification of the member state s supervisory authority send it the data according to item 2, inter alia the necessary documents and standard forms for the registration of the occupational scheme in the supplementary pension insurance occupational schemes register, kept by the Commission. 26 SIC Article 229d Management of an Occupational Scheme by a Nonresident Institution (2) Within two months after receipt of the information covered under Items 1 to 3 of Article 229c (2) herein from the competent supervisory authority of the home Member State, the Deputy Chairperson of the Commission shall communicate to the said authority, in writing, all provisions applicable in the case, related to the investment activity and the disclosure of information. The Deputy Chairperson of the Commission shall notify the competent supervisory authority of the home Member State of any change in Bulgarian social and labour law, as well as of any change in the relevant provisions related to the investment activity and the disclosure of information, which concern the scheme managed by the non-resident institution. 27 SIC Article 229d Management of an Occupational Scheme by a Nonresident Institution 4
(2) Within two months after receipt of the information covered under Items 1 to 3 of Article 229c (2) herein from the competent supervisory authority of the home Member State, the Deputy Chairperson of the Commission shall communicate to the said authority, in writing, all provisions applicable in the case, related to the investment activity and the disclosure of information. The Deputy Chairperson of the Commission shall notify the competent supervisory authority of the home Member State of any change in Bulgarian social and labour law, as well as of any change in the relevant provisions related to the investment activity and the disclosure of information, which concern the scheme managed by the non-resident institution. 28 SIC Article 229d Management of an Occupational Scheme by a Nonresident Institution (2) Within two months after receipt of the information covered under Items 1 to 3 of Article 229c (2) herein from the competent supervisory authority of the home Member State, the Deputy Chairperson of the Commission shall communicate to the said authority, in writing, all provisions applicable in the case, related to the investment activity and the disclosure of information. The Deputy Chairperson of the Commission shall notify the competent supervisory authority of the home Member State of any change in Bulgarian social and labour law, as well as of any change in the relevant provisions related to the investment activity and the disclosure of information, which concern the scheme managed by the non-resident institution. 29 SIC Article 229c Cross-Border Activities of the Pension Insurance (5) After receipt from the competent supervisory authority of the host Member State, whose social and labour law is applicable to the scheme, of the relevant provisions of the social and labour law of the said State, as well as of all provisions applicable in the case, related to the investment activity and the disclosure of information, the Deputy Chairperson of the Commission shall communicate immediately the information received from the competent supervisory authority to the pension insurance company. 30 SIC Article 229c Cross-Border Activities of the Pension Insurance (5) After receipt from the competent supervisory authority of the host Member State, whose social and labour law is applicable to the scheme, of the relevant provisions of the social and labour law of the said State, as well as of all provisions applicable in the case, related to the investment activity and the disclosure of information, the Deputy Chairperson of the Commission shall communicate immediately the information received from the competent supervisory authority to the pension insurance company. 31 SIC Article 229c Cross-Border Activities of the Pension Insurance (9) The competent supervisory authority of the host Member State shall notify the Deputy Chairperson of the Commission of any change in the applicable social and labour law which may affect the characteristics of the occupational scheme, insofar as it concerns the operation thereof, as well as of any change in the relevant provisions related to the investment activity and the disclosure of information which concern the scheme managed by the pension insurance company. The Deputy Chairperson of the Commission shall notify immediately the pension insurance company of any such changes. 33 SIC Article 229d Management of an Occupational Scheme by a Non- 5
resident Institution (2) Within two months after receipt of the information covered under Items 1 to 3 of Article 229c (2) herein from the competent supervisory authority of the home Member State, the Deputy Chairperson of the Commission shall communicate to the said authority, in writing, all provisions applicable in the case, related to the investment activity and the disclosure of information. The Deputy Chairperson of the Commission shall notify the competent supervisory authority of the home Member State of any change in Bulgarian social and labour law, as well as of any change in the relevant provisions related to the investment activity and the disclosure of information, which concern the scheme managed by the non-resident institution. RFSC Article 74 (2) The Deputy Chairperson of the Commission in charge of Social Insurance Supervision Division shall notify in writing the Member State s supervisory authority about all amendments in the relevant to the occupational scheme provisions of the social and labour legislation of the Republic of Bulgaria, and about all applicable to the case provisions regarding the investment activity and the disclosure of information. 34 RFSC Article 73 (6) In the course of the on-going supervision of the activities of the pension insurance company, managing the occupational scheme, the Deputy Chairperson in charge of Social Insurance Supervision Division, maintains constant communication and cooperation with the Member State competent authority by: 1. requiring from it, if necessary, additional information about the social and labour law, applicable to the occupational scheme, the special rules, regarding the investment activity and the requirements for disclosure of information to the insured persons, the pensioners and the other persons, entitled according to the scheme; 2. informing it about any significant change about; a) the financial stability of the company; b) the shareholders, possessing a significant share of the company s capital; c) the members of the management bodies and the circumstances, related to the legislative requirements to them; d) the adopted supervisory actions in respect of the company, including the applied coercive administrative measures and the imposed penalties, that may impede or make impossible the fulfillment of the obligations under the contract for management of the occupational scheme; e) a started procedure of insolvency, liquidation or transformation of the company; RFSC Article 74 (5) When in the case of violation by the non-resident institution the Member State s competent authority has not taken the necessary measures for its cessation or if appropriate measures are lacking in the legislation of the respective Member State, the Deputy Chairperson of the Commission in charge of Social Insurance Supervision Division shall: 1. estimate the solemnity of the violation; 2. determine the type of the measure or the sanction, which corresponds to the solemnity of the violation and will achieve the objective of its cessation; 3. notify the Member State s supervisory authority about the measure or sanction, which he or she intends to apply; 4. apply the measure or impose the sanction. 35 RFSC Article 73 6
(6) In the course of the on-going supervision of the activities of the pension insurance company, managing the occupational scheme, the Deputy Chairperson in charge of Social Insurance Supervision Division, maintains constant communication and cooperation with the Member State competent authority by: 1. requiring from it, if necessary, additional information about the social and labour law, applicable to the occupational scheme, the special rules, regarding the investment activity and the requirements for disclosure of information to the insured persons, the pensioners and the other persons, entitled according to the scheme; 2. informing it about any significant change about; a) the financial stability of the company; b) the shareholders, possessing a significant share of the company s capital; c) the members of the management bodies and the circumstances, related to the legislative requirements to them; d) the adopted supervisory actions in respect of the company, including the applied coercive administrative measures and the imposed penalties, that may impede or make impossible the fulfillment of the obligations under the contract for management of the occupational scheme; e) a started procedure of insolvency, liquidation or transformation of the company; (7) On receipt from the Member State competent supervisory authority of a written notification of non-compliance by the pension insurance company with the applicable to the scheme social and labour law, the special rules, regarding the investments and the disclosure requirements, as well as for any other action that may endanger the interests of the insured persons and the pensioners, the security of their pensions and the other benefits or the financial stability of the company, the Deputy Chairperson in charge of Social Insurance Supervision Division, takes in coordination with this authority the necessary measures for stopping of the violation. 36 SIC Article 229d Management of an Occupational Scheme by a Nonresident Institution (3) The Deputy Chairperson of the Commission shall exercise supervision as to compliance with Bulgarian social and labour law and the applicable provisions related to the investment activity and the disclosure of information by the non-resident institution. In case of any detected breach, the said Deputy Chairperson shall notify immediately the competent supervisory authority of the home Member State and shall coordinate the measures necessary to put a stop to the breach by the said institution as proposed by the competent supervisory authority. (4) If, despite the measures applied by the competent supervisory authority of the home Member State or because appropriate measures are lacking in the said home Member State, the non-resident institution persists in breaching the provisions referred to in Paragraph (1), the Deputy Chairperson of the Commission may, after informing the competent supervisory authority: 1. apply: (a) coercive administrative measures; (b) sanctions; 2. prevent the non-resident institution from managing an occupational scheme for the relevant sponsoring undertaking. 37 SIC Article 229c Cross-Border Activities of the Pension Insurance (12) Upon receipt of a notification referred to in Paragraph (11), the 7
Deputy Chairperson of the Commission, in consultation with the competent supervisory authority of the host Member State, shall take the measures necessary to put a stop to the breaches by the pension insurance company. RFSC Article 73 (7) On receipt from the Member State competent supervisory authority of a written notification of non-compliance by the pension insurance company with the applicable to the scheme social and labour law, the special rules, regarding the investments and the disclosure requirements, as well as for any other action that may endanger the interests of the insured persons and the pensioners, the security of their pensions and the other benefits or the financial stability of the company, the Deputy Chairperson in charge of Social Insurance Supervision Division, takes in coordination with this authority the necessary measures for stopping of the violation. 38 SIC Article 213b Funding of Technical Provisions (1) The pension insurance company shall have at all times sufficient and appropriate assets to cover the technical provisions provided for in the ordinance referred to in Article 213a (3) herein in connection with all commitments with risks covered. (2) The technical provisions must be fully funded at all times in respect of the total range of occupational schemes managed. Upon breach of this obligation, the Deputy Chairperson shall apply the measure referred to in Item 17 of Article 344 (1) herein. RFSC Article 73 (6) In the course of the on-going supervision of the activities of the pension insurance company, managing the occupational scheme, the Deputy Chairperson in charge of Social Insurance Supervision Division, maintains constant communication and cooperation with the Member State competent authority by: 1. requiring from it, if necessary, additional information about the social and labour law, applicable to the occupational scheme, the special rules, regarding the investment activity and the requirements for disclosure of information to the insured persons, the pensioners and the other persons, entitled according to the scheme; 2. informing it about any significant change about; a) the financial stability of the company; b) the shareholders, possessing a significant share of the company s capital; c) the members of the management bodies and the circumstances, related to the legislative requirements to them; d) the adopted supervisory actions in respect of the company, including the applied coercive administrative measures and the imposed penalties, that may impede or make impossible the fulfillment of the obligations under the contract for management of the occupational scheme; e) a started procedure of insolvency, liquidation or transformation of the company; (7) On receipt from the Member State competent supervisory authority of a written notification of non-compliance by the pension insurance company with the applicable to the scheme social and labour law, the special rules, regarding the investments and the disclosure requirements, as well as for any other action that may endanger the interests of the insured persons and the pensioners, the security of their pensions and the other benefits or the financial stability of the company, the Deputy Chairperson in charge of Social Insurance Supervision Division, takes in coordination with this authority the necessary measures for stopping of 8
the violation. 39 SIC Article 213b Funding of Technical Provisions (3) The pension insurance company shall have at all times sufficient and appropriate assets to cover the technical provisions provided for in the ordinance referred to in Article 213a (3) herein in connection with all commitments with risks covered. The technical provisions must be fully funded at all times in respect of the total range of occupational schemes managed. Upon breach of this obligation, the Deputy Chairperson shall apply the measure referred to in Item 17 of Article 344 (1) herein. RFSC Article 73 (6) In the course of the on-going supervision of the activities of the pension insurance company, managing the occupational scheme, the Deputy Chairperson in charge of Social Insurance Supervision Division, maintains constant communication and cooperation with the Member State competent authority by: 1. requiring from it, if necessary, additional information about the social and labour law, applicable to the occupational scheme, the special rules, regarding the investment activity and the requirements for disclosure of information to the insured persons, the pensioners and the other persons, entitled according to the scheme; 2. informing it about any significant change about; a) the financial stability of the company; b) the shareholders, possessing a significant share of the company s capital; c) the members of the management bodies and the circumstances, related to the legislative requirements to them; d) the adopted supervisory actions in respect of the company, including the applied coercive administrative measures and the imposed penalties, that may impede or make impossible the fulfillment of the obligations under the contract for management of the occupational scheme; e) a started procedure of insolvency, liquidation or transformation of the company; (7) On receipt from the Member State competent supervisory authority of a written notification of non-compliance by the pension insurance company with the applicable to the scheme social and labour law, the special rules, regarding the investments and the disclosure requirements, as well as for any other action that may endanger the interests of the insured persons and the pensioners, the security of their pensions and the other benefits or the financial stability of the company, the Deputy Chairperson in charge of Social Insurance Supervision Division, takes in coordination with this authority the necessary measures for stopping of the violation. 9