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Arbitrator`s decision the second case brought by the Guarantee Fund before the Arbitration Court of CoB against the Cyprus Guarantee Fund

31 March 2025

The Guarantee Fund has always pursued a consistent and proactive policy to ensure that persons with claims under insurance contracts concluded through the Bulgarian branch of the insurance company "Olympic" (in liquidation) can receive compensation.

Since 2022, the Guarantee Fund has been making payments of principal amounts of benefits due under insurance contracts concluded through the Bulgarian branch of Olympic Insurance Company (in liquidation) according to lists provided by the company's liquidators. This became possible after the case brought by the Guarantee Fund before the Arbitration Court of the Council of Bureaux was concluded in 2021 in favour of the Bulgarian side and the Cyprus Guarantee Fund was designated as the institution liable for the insurance contracts concluded through the Bulgarian branch of Olympic.

Notwithstanding the commencement of payments, the Cyprus Guarantee Fund has disputed the payability of some of the guaranteed claims. The Cypriot institution recognises as guaranteed the principal amounts of compensation for pecuniary and non-pecuniary damage under insurance contracts concluded through the Bulgarian branch of the insurance company Olympic. The position defended by the Bulgarian Guarantee Fund is that the scope of payments should include legal costs and full interest in relation to the compensation payable to the injured parties, as well as Casco regressions of the motor insurers against Olympic Insurance Company, Bulgarian branch.

In order to protect the interests of the Bulgarian side and to ensure the most favourable conditions for the injured parties, the Bulgarian Guarantee Fund brought a new case against the Cyprus Guarantee Fund for the claims it disputed before the Court of Arbitration with an arbitrator appointed by the Council of Bureaux.

According to the arbitrator's new decision in the case, the Bulgarian Guarantee Fund is entitled to pay the following claims to the injured parties as provided by the liquidators of the company and to claim reimbursement from the Cyprus Guarantee Fund accordingly: 

- the interest resulting from the insured's delay, for which the insured is liable to the injured party, for the period from the date of notification of the claim to the date of the insurer's decision or the expiry of the time limit under the Insurance Code for the insurer's consideration and decision on the claim - until the earlier of

- the reasonable expenses incurred by the injured parties in connection with claims brought by them, including legal fees, which are decided to be borne by the insured party.

Translated with DeepL.com (free version)Outside the scope of the guaranteed claims, according to the arbitrator's decision, remain the interest accrued as a result of Olympic's delay in processing the claims, as well as the Casco regressions of the motor insurers against Olympic. The decision is final and both guarantee funds must comply with it.

In connection with the additional payments and for more information, the injured parties should contact the liquidators of Olympic Insurance Company. The liquidators draw up the lists of payments due, which, after coordination between the Cyprus and Bulgarian Guarantee Funds, are submitted to the Bulgarian Guarantee Fund for making the approved payments.

A new procedure has been opened for the payment of another tranche according to the lists of due payments provided by the liquidators of Olympic Insurance Company.