1. Settlement of personal injuries in Bulgaria (compensation for death), with emphasis in non- material losses Veselin Grigorov – Chief Legal Adviser/MTPL Claims Department Bulstrad VIG 5 Pozitano Str., Sofia,Bulgaria Luxembourg October 9, 2013 October 9, 2013

2. Legal basis for the liability of the injuring party System, based on the principle of fault-based liability Fault-based liability is governed by Art. 257 of Insurance Code / Publication - State Gazette No. 103/23.12.2005, in force as of 01.01.2006,Last Amendment - SG No. 70/09.08.2013 Fault-based liability is governed by Art. 257 of Insurance Code / Publication - State Gazette No. 103/23.12.2005, in force as of 01.01.2006,Last Amendment - SG No. 70/09.08.2013 Art.257.1 of Insurance Code - 1) An object of compulsory third party insurance for motorists shall be the civil liability of the insured physical persons and judicial entities for material and non-material damage caused by them to third parties, connected to the ownership and/or use of motor vehicles for which the insured parties are answerable in accordance with Bulgarian legislation or the legislation of the state in which the damage has been caused. Art.257.1 of Insurance Code - 1) An object of compulsory third party insurance for motorists shall be the civil liability of the insured physical persons and judicial entities for material and non-material damage caused by them to third parties, connected to the ownership and/or use of motor vehicles for which the insured parties are answerable in accordance with Bulgarian legislation or the legislation of the state in which the damage has been caused.

3. Liable persons: the owner of the motor vehicle for which a valid signed insurance contract is in existence, as well as all persons who use the motor vehicle on a legal basis. (Art. Art.257.1) the owner of the motor vehicle for which a valid signed insurance contract is in existence, as well as all persons who use the motor vehicle on a legal basis. (Art. Art.257.1) Important notice : Art.257 (4) - Agreements shall not be permitted which exclude from third party cover damage caused to a third party who has known or was obliged to know that the driver of the motor vehicle was under the influence of alcohol or other intoxicating substance at the time of the road transport accident. Important notice : Art.257 (4) - Agreements shall not be permitted which exclude from third party cover damage caused to a third party who has known or was obliged to know that the driver of the motor vehicle was under the influence of alcohol or other intoxicating substance at the time of the road transport accident.

4. Exceptions:1. damage suffered by the offending driver of the motor vehicle; damage suffered by the offending driver of the motor vehicle; 2. damage caused to the property of a passenger in the motor vehicle driven by the offending driver or to the property of a member of the family of the offending driver; 3. damage caused to the motor vehicle driven by the insured party and damage caused to property transported in this motor vehicle; 4. damage caused during the use of a motor vehicle in competitions, on condition that adherence to road traffic regulations was not compulsory for the participants in the competition and if not agreed otherwise; 5. damage caused in the course of use of the motor vehicle during an act of terrorism or war, on condition that the injury to third parties is directly connected to such an act; 6. damage caused by the haulage of radioactive, chemical or dangerous materials; 7. damage representing environmental pollution; 8. damage resulting from loss or destruction of money, jewellery, securities, all kinds of documents, stamps, coins or other similar collections; 9. reimbursement of payments made by the state social or health insurance system in cases of, or by reason of, death or bodily injury resulting from the insurable event; 10. depreciation of the damaged property.

5. Extent of liability Art 257 (2) - The insurance under Paragraph 1 shall cover liability for damage caused in connection with the ownership or use of a motor vehicle by a person who: Art 257 (2) - The insurance under Paragraph 1 shall cover liability for damage caused in connection with the ownership or use of a motor vehicle by a person who: 1. is not explicitly or tacitly authorised for this, on condition that he or she has not acquired possession of the motor vehicle by means of theft, robbery or criminal act under Article 346 of the Criminal Code ; 2. does not own a driving licence or whose driving licence has been temporarily withdrawn; 3. has infringed the legal requirements for motor vehicle roadworthiness.

6. Discharge Exemptions from liability for the owner, possessor and Driver 1) Force majeure 2) In case of exclusive fault by the injured party. Compensation in case of death Damages are paid for: The costs for the treatment and transportation of the victim until his/her death (Art. 267 Insurance Code), including the transportation of the body abroad, in the place of residence of the deceased person. The costs for the treatment and transportation of the victim until his/her death (Art. 267 Insurance Code), including the transportation of the body abroad, in the place of residence of the deceased person. Funeral costs: Expenses for the funeral, the tombstone, the funeral mass, the catering of the guests according to local customs – everything in accordance withthe social status of the deceased person. Expenses for the funeral, the tombstone, the funeral mass, the catering of the guests according to local customs – everything in accordance withthe social status of the deceased person.

7. Compensation to the surviving dependants for the loss of maintenance (Art. 267 (1).1 Insurance Code Beneficiaries: Persons entitled to maintenance by virtue of law: Persons entitled to maintenance by virtue of law: The surviving spouse and close relatives in the ascending and descending line. The surviving spouse and close relatives in the ascending and descending line. Extent of maintenance duty with respect to spouses, calculation in accordance with the financial situation of the family, also taking into consideration the special needs of the beneficiary in the framework of family life, the deceased person's income and the beneficiary's income from his/her work or his/her property, the number of children entitled to maintenance etc. with respect to spouses, calculation in accordance with the financial situation of the family, also taking into consideration the special needs of the beneficiary in the framework of family life, the deceased person's income and the beneficiary's income from his/her work or his/her property, the number of children entitled to maintenance etc. with respect to children, since both parents have a duty of maintenance depending on their financial situation, the loss of the contribution that was provided by the deceased will be calculated accordingly. with respect to children, since both parents have a duty of maintenance depending on their financial situation, the loss of the contribution that was provided by the deceased will be calculated accordingly. with respect to ascendants and descendants, their need for assistance and their inability to support themselves is required. with respect to ascendants and descendants, their need for assistance and their inability to support themselves is required.

8. Duration of maintenance Depends on the presumed life expectancy of the deceased person, which is calculated on the basis of statistical data, as well as on his/her health condition before his/her death. Depends on the presumed life expectancy of the deceased person, which is calculated on the basis of statistical data, as well as on his/her health condition before his/her death. With regard to children, up to the age of 18 or until the completion of an adequate education. With regard to children, up to the age of 18 or until the completion of an adequate education. Calculation tables or a particular calculation model are not available. Calculation tables or a particular calculation model are not available.

9. Non-material damages in case of death (=Pain and suffering) Art. 267 Insurance code awards a compensation claim for pain and suffering, both to the injured party and to his/her family in case of his/her death. Art. 267 Insurance code awards a compensation claim for pain and suffering, both to the injured party and to his/her family in case of his/her death. According to the Art.257 (3) Insurance code, third parties, entitled to receive compensation for damage caused by motor vehicles, shall be considered to be all persons except those answerable for the damage caused. According to the Art.257 (3) Insurance code, third parties, entitled to receive compensation for damage caused by motor vehicles, shall be considered to be all persons except those answerable for the damage caused. Art 265 Insurance code stipulate, that : Art 265 Insurance code stipulate, that : (1) An injured party shall be a person who have died or has suffered bodily injury caused by motor vehicles. (2) A damaged party shall be a person, including an injured party, who has the right to compensation for damage caused by motor vehicles.

10. The Issue The issue of which persons belong to the family members of the deceased person in the sense of Art. 257 and 265 Insurance code and are entitled to compensation for pain and suffering, was unanimously decided by the Supreme Court, since there are not legal provisions. According this, entitled to compensation have only the closest relatives of the deceased - spouse, parents and children, and the partners cohabiting for a longer period of time. The issue of which persons belong to the family members of the deceased person in the sense of Art. 257 and 265 Insurance code and are entitled to compensation for pain and suffering, was unanimously decided by the Supreme Court, since there are not legal provisions. According this, entitled to compensation have only the closest relatives of the deceased - spouse, parents and children, and the partners cohabiting for a longer period of time. A relative's claim for pain and suffering due to the victim's death may be pursued cumulatively with the victim's own claim for non-material damages, in case that the latter dies as a result of his/her injury. This applies provided that the deceased had filed in the meantime a lawsuit for this purpose and is inherited by the surviving relative. A relative's claim for pain and suffering due to the victim's death may be pursued cumulatively with the victim's own claim for non-material damages, in case that the latter dies as a result of his/her injury. This applies provided that the deceased had filed in the meantime a lawsuit for this purpose and is inherited by the surviving relative. The amount for pain and suffering is usually paid as a lump sum. The amount for pain and suffering is usually paid as a lump sum.

11. Disputed cases of persons entitled to a claim for pain and suffering In case law it is disputed whether the following persons are entitled to a claim for pain and suffering: 1) Very young children and the foetus. From the one part, it is sustained that these children, in particular under the age of 5 years (and not least the foetus) are not able to feel loss and pain. From the other part it is held that even if this is the case, the feelings of pain will emerge with certainty at a later stage, when the children will be aware of the loss. Thus, the claim is founded. 2) For a child born outside of marriage, for which there is biological proof that it is the child of the deceased person, but was not recognized by the latter. According to the prevailing opinion in case law, this child has first to be recognized by a judicial court in specific proceedings.

12. Substantial criteria for determining the size of the pain and suffering claim The size is subject to the discretion of the court. The following criteria have to be taken into consideration: The following criteria have to be taken into consideration: - degree of the injuring party's fault - contributory negligence of the victim - particular circumstances of the accident - age of the deceased and the beneficiaries - emotional bond between the deceased and the claimant - the financial situation of the deceased person and the claimant - however, not of the insurer. Indicative tables are not available. The amounts awarded by the judge of the first instance are usually confirmed or slightly increased by the second instance court, according to almost established case law. The amounts awarded by the judge of the first instance are usually confirmed or slightly increased by the second instance court, according to almost established case law.

13. The Results: There is a Great certainty over the anticipated size, as per the court decision, of the claimed compensation amount, both for pain and suffering in death case and in non-material damages in case of injury; there is not frequently very different court decisions in similar cases. There is a Great certainty over the anticipated size, as per the court decision, of the claimed compensation amount, both for pain and suffering in death case and in non-material damages in case of injury; there is not frequently very different court decisions in similar cases. Strong criticism against this practice, arguing for the principle of proportionality and the introduction of a at least one framework table. Estimation that this theory will have a gradual impact in the case law towards a change of view. Strong criticism against this practice, arguing for the principle of proportionality and the introduction of a at least one framework table. Estimation that this theory will have a gradual impact in the case law towards a change of view.

14. VARIOUS I. Statute of limitations The prescription time for claims against the liability insurer and the guarantee fund in accordance with the art.197 of Insurance Code provisions is five years from the day of occurrence of the insured event. This period is extended, for the duration of the legal proceedings regarding the receivables. The prescription time for claims against the liability insurer and the guarantee fund in accordance with the art.197 of Insurance Code provisions is five years from the day of occurrence of the insured event. This period is extended, for the duration of the legal proceedings regarding the receivables. Interruption – Suspension of prescription; Interruption – Suspension of prescription; Interruption: by filing a lawsuit, recognition or with the initiation of enforcement proceedings; Interruption: by filing a lawsuit, recognition or with the initiation of enforcement proceedings; New limitation shall start with the termination of the previous one. If the receivable is ascertained by order of the court, the term of the new limitation shall always be five years. New limitation shall start with the termination of the previous one. If the receivable is ascertained by order of the court, the term of the new limitation shall always be five years.

15. II. Minimum sums insured: Since 11 June 2012 Since 11 June 2012 - € 1,000,000 for the material damage for every event; - € 1,000,000 per person for every event in case of non- material damages; - € 5,000,000 for every event in case of two or more injured persons. In addition, litigation costs and interest; In addition, litigation costs and interest; III. Interest on claim during litigation: About 14 %, from the day of occurrence of the insured event. About 14 %, from the day of occurrence of the insured event.

16. IV. Duration of litigation Duration of litigation until the decision of the Sofia courts is issued: Duration of litigation until the decision of the Sofia courts is issued: a) First instance: approx. 10-12 months from the first hearing b) Second instance: approx. 6 months from the first hearing c) Supreme Court: approx. 6 months from the first hearing. To this duration the delay in determining the date of the first trial is to be added, approximately 2-3 moths for First and Second instance and about 6 months for the Supreme Court; To this duration the delay in determining the date of the first trial is to be added, approximately 2-3 moths for First and Second instance and about 6 months for the Supreme Court;

17. THE END Thank you ! Thank you !