Ordinance No. 64 of 29.11.2018 on Requirements for Persons under Art. 344(2)(2) of the Social Security Code and Appointment Procedures

ORDINANCE No. 64 of 29.11.2018 on the requirements for the persons under Art. 344, para. 2, item 2 of the Social Security Code and the procedure and manner of their appointment Pub. - State Gazette, No. 102 of 11.12.2018, effective from 11.12.2018; amended, No. 60 of 20.07.2021; amended, No. 70 of 20.08.2024; amended, No. 20 of 11.03.2025, effective from the date of introduction of the euro in the Republic of Bulgaria Adopted by Decision No. 1099 of 29.11.2018 of the Commission for Financial Supervision

Section I General Provisions

Art. 1. This Ordinance determines the requirements for the persons under Art. 344, para. 2, item 2 of the Social Security Code (SSC) and the procedure and manner of their appointment.

Section II Requirements for Persons under Art. 344, para. 2, item 2 of the SSC

Art. 2. The registered auditor under Art. 344, para. 2, item 2, letter "a" of the SSC is:

1. a natural person who meets the following requirements: a) has at least five years of professional experience as a registered auditor in the audit of enterprises in the financial sector; b) does not have their auditor qualification revoked in the Republic of Bulgaria or in another Member State; c) no disciplinary measure under Art. 40, para. 3, item 5 or 6 of the Law on Independent Financial Audit has been imposed on them with a final decision; d) no supervisory measure under Art. 89, para. 2, items 5 - 8 of the Law on Independent Financial Audit has been applied to them with a final decision, or
2. an audit firm that meets the requirements under item 1 and in which at least one registered auditor - a natural person who meets the same requirements, practices the audit profession.

Art. 3. (Amend. - SG, No. 60 of 2021) The external independent expert for carrying out an asset valuation of a supplementary social security fund, a payment fund and/or a supplementary social security enterprise must:

1. have the right to practice the profession of an independent valuer in the Republic of Bulgaria in accordance with the Law on Independent Valuers;
2. have at least five years of professional experience as an independent valuer;
3. not have their independent valuer qualification revoked;
4. not have committed violations of Art. 17, para. 2, Art. 18, items 1 - 3 and 7 and Art. 21 of the Law on Independent Valuers during the three years preceding the date of submission of the application for inclusion in the list under Art. 7, para. 1, item 2.

Art. 4. The external independent expert for carrying out an assessment of the management system of the supplementary social security enterprise or of individual functions thereof must:

1. have a recognized professional qualification as an internal auditor;
2. have at least five years of professional experience in internal audit in enterprises in the financial sector or in the public sector;
3. not have their certificate for recognition of professional qualification as an internal auditor revoked;
4. not have been imposed a penalty with a final administrative penalty decision for violation of Art. 40, para. 1 or 4 of the Law on Internal Audit in the Public Sector.

Art. 5. The actuary for carrying out an actuarial check must:

1. possess the qualification of a responsible actuary in the field of supplementary pension insurance, recognized by the Commission for Financial Supervision, hereinafter referred to as "the Commission";
2. have at least five years of professional experience as a responsible actuary;
3. not have their qualification revoked.

Art. 6. (Amend. - SG, No. 70 of 2024) (1) The natural person under Art. 2 - 5 must also meet the following requirements:

1. not have been convicted of an intentional crime of general nature;
2. not be deprived of the right to hold a position of material responsibility and to practice the corresponding profession or activity;
3. during the three years preceding the initial date of insolvency determined by the court, not have been a member of a management or supervisory body or an unlimitedly liable partner in a company for which insolvency proceedings have been opened, or in a company terminated due to insolvency if creditors remain unsatisfied;
4. not be undergoing proceedings for declaration of insolvency and not be an insolvent debtor whose rights have not been restored;
5. during the three years preceding the act of the respective competent authority, not have been a member of a management or supervisory body, an unlimitedly liable partner, or a prokurist in a company whose license for carrying out an activity subject to a licensing regime was revoked, except in cases where the license was revoked at the request of the company, as well as if the act of revocation of the issued license was annulled in the corresponding manner;
6. not have been dismissed from a management or supervisory body of a commercial company or as a prokurist on the basis of an applied compulsory administrative measure, except in cases where the act of the competent authority was annulled in the corresponding manner;
7. not have been imposed administrative penalties with final administrative penalty decisions during the last three years for a gross violation or for systematic violations of the SSC, other laws regulating the financial sector, and the acts implementing them, the corresponding legislation of another Member State or directly applicable law of the European Union regulating the financial sector;
8. not have been excluded from the respective list on the basis of Art. 11, items 4 - 6;
9. not have been a member of a management or supervisory body, a person exercising a function under Art. 123e, para. 7 of the SSC, or an employee or representative of the supplementary social security enterprise against which the measure under Art. 344, para. 2, item 2 of the SSC is applied, during the last 2 years preceding the date of the invitation under Art. 12, para. 1;
10. not be a spouse or relative by blood or affinity up to the fourth degree inclusive, or by affinity up to the third degree inclusive, and not be a related person with a member of a management or supervisory body of the supplementary social security enterprise against which the measure under Art. 344, para. 2, item 2 of the SSC is applied, with a person exercising a function under Art. 123e, para. 7 of the SSC, or with a person holding directly or indirectly more than 5 percent of the shares of the enterprise, and not be in de facto cohabitation with such a member or person;
11. not have provided services to the supplementary social security enterprise against which the measure under Art. 344, para. 2, item 2 of the SSC is applied, or to a fund managed by it during the last 2 years preceding the date of the invitation under Art. 12, para. 1, and not have been a member of the team of a company providing such services during the specified period;
12. (Amend. - SG, No. 70 of 2024) not have a personal interest (financial or otherwise) in the supplementary social security enterprise against which the measure under Art. 344, para. 2, item 2 of the SSC is applied, and in the funds managed by it, other than the interest in the capacity of an insured person, a person insured under a PEPP, a pensioner, a PEPP beneficiary or an heir. (2) The audit firm under Art. 2, item 2 must also meet the following requirements:
13. under para. 1, items 3 - 7;
14. not have been excluded from the list under Art. 7, para. 1, item 1: a) on the basis of Art. 11, items 3, 5 and 6; b) on the basis of Art. 11, item 4, except when the exclusion is related to item 3 and at least one registered auditor who meets the requirements under para. 1, items 1 - 8 has started practicing the audit profession in the audit firm;
15. at least one registered auditor who meets the requirements under para. 1, items 1 - 8 practices the audit profession in it;
16. not have been a member of a management or supervisory body of the supplementary social security enterprise against which the measure under Art. 344, para. 2, item 2 of the SSC is applied during the last 2 years preceding the date of the invitation;
17. not be a related person with a member of a management or supervisory body of the supplementary social security enterprise against which the measure under Art. 344, para. 2, item 2 of the SSC is applied, with a person exercising a function under Art. 123e, para. 7 of the SSC, or with a person holding directly or indirectly more than 5 percent of the shares of the enterprise;
18. not have provided services to the supplementary social security enterprise against which the measure under Art. 344, para. 2, item 2 of the SSC is applied, or a fund managed by it during the last 2 years preceding the date of the invitation under Art. 12, para. 1;
19. not have a financial or other interest in the supplementary social security enterprise against which the measure under Art. 344, para. 2, item 2 of the SSC is applied, and in the funds managed by it;
20. the registered auditor who practices the audit profession in the firm meets the requirements under para. 1, items 9 - 12.

Section III Inclusion and Exclusion from the Lists of Persons under Art. 344, para. 2, item 2 of the SSC

Art. 7. (1) The Commission maintains:

1. a list of registered auditors;
2. a list of external independent experts for carrying out asset valuations;
3. a list of external independent experts for carrying out management system assessments;
4. a list of responsible actuaries for carrying out actuarial checks. (2) The lists under para. 1 contain the names of natural persons, respectively the name of the audit firm under Art. 2, item 2 and the names of the registered auditor - natural person, respectively the registered auditors - natural persons, who practice the audit profession in the firm. The list under para. 1, item 2 also contains data on the types of valuations under Art. 6, para. 1 of the Law on Independent Valuers, for the carrying out of which the respective person holds the qualification.

Art. 8. (1) Persons who meet the respective requirements under Art. 2 - 5 and Art. 6, para. 1, items 1 - 8 or para. 2, items 1 - 3 are included in the lists under Art. 7, para. 1. (2) The person applying for inclusion in the respective list under Art. 7, para. 1 submits an application containing contact data, including e-mail and telephone, to which the following are attached:

1. for natural persons under Art. 2, item 1 and Art. 3 - 5: a) a document certifying the recognized qualification, where applicable, respectively the acquired professional qualification under Art. 4, item 1; b) a curriculum vitae; c) documents certifying professional experience; d) a document certifying the circumstance under Art. 6, para. 1, item 1 - for a person who is not a Bulgarian citizen; e) a declaration on the respective circumstances under Art. 2, item 1, letters "b" - "d", Art. 3, items 3 and 4 or Art. 4, items 3 and 4, as well as under Art. 6, para. 1, items 2 - 7;
2. for audit firms under Art. 2, item 2: a) a declaration on the circumstances under Art. 2, item 1, letters "b" - "d" and under Art. 6, para. 2, items 1 and 3; b) the corresponding documents under item 1 for at least one registered auditor - natural person practicing the profession in the audit firm.

Art. 9. (1) The Deputy Chairman of the Commission for Financial Supervision, heading the "Insurance Supervision" Directorate, hereinafter referred to as "the Deputy Chairman of the Commission", may require within a period determined by him:

1. correction or supplementation of the documents under Art. 8, para. 2;
2. submission by the applicant, by competent authorities in the country and abroad or by other persons of documents and/or information regarding the applicant. (2) The Deputy Chairman of the Commission submits to the Commission a proposal for inclusion or refusal to include the person in the respective list under Art. 7, para. 1 within 14 days from the submission of the application, and when additional documents or information are required or instructions are given to eliminate discrepancies under para. 1 - within 14 days from their submission. When the documents or information required from other persons are submitted after those of the applicant, the Deputy Chairman of the Commission notifies him of the final deadline for submitting the proposal. In cases where the required additional documents or information are not submitted, the Deputy Chairman of the Commission submits the proposal to the Commission within 14 days from the expiration of the period determined for their submission. (3) The Commission decides with a decision within 14 days from the submission of the proposal. (4) The Commission refuses to include the applicant in the respective list under Art. 7, para. 1 when the applicant:
3. does not meet the requirements of this Ordinance;
4. has not submitted the required documents within the period determined under para. 1;
5. has submitted documents containing incorrect or contradictory data. (5) In case of refusal, the person may submit a new application for inclusion in the same list under Art. 7, para. 1 no earlier than one year from the entry into force of the Commission's decision.

Art. 10. (1) A person included in a list under Art. 7, para. 1 is obliged to notify the Commission within five working days from the occurrence of the respective circumstance when:

1. they cease to meet any of the requirements of this Ordinance;
2. a registered auditor - natural person practicing the audit profession in the audit firm ceases to meet any of the requirements of this Ordinance;
3. they fall into actual impossibility to practice their profession or activity for more than six months;
4. the actual impossibility under item 3 ceases to exist. (2) To persons who submitted a notification under para. 1, item 3, no invitation under the procedure of Art. 12, para. 1 is sent until receipt of a notification under para. 1, item 4.

Art. 11. The Commission excludes a person from the respective list under Art. 7, para. 1:

1. at their request;
2. upon death or upon placing them under interdiction;
3. upon opening insolvency or liquidation proceedings for the audit firm under Art. 2, item 2;
4. when they cease to meet any of the requirements under Art. 2 - 5 and Art. 6, para. 1, items 1 - 7 or para. 2, item 1 or 3;
5. when without justified reason they do not carry out the assessment or check for which they were appointed by a decision of the Commission within the time limit;
6. when it is established that they were included in the respective list on the basis of a document containing incorrect data.

Section IV Appointment of a Person under Art. 344, para. 2, item 2 of the SSC

Art. 12. (Amend. - SG, No. 20 of 2025, effective from the date of introduction of the euro in the Republic of Bulgaria) (1) For the application of the compulsory administrative measure under Art. 344, para. 2, item 2 of the SSC, the Commission sends an invitation to the persons included in the respective list under Art. 7, para. 1 to submit price proposals for carrying out the respective assessment or check. When appointing a person under Art. 3, an invitation is sent only to independent valuers holding the qualification for carrying out the respective type of valuation under Art. 6, para. 1 of the Law on Independent Valuers. (2) The invitation contains specific information regarding:

1. the subject of the compulsory administrative measure;
2. the person against whom it will be applied;
3. the period for carrying out the respective assessment or check;
4. the period for submitting price proposals. (3) Persons to whom an invitation is sent under para. 1 are obliged to keep the information contained therein confidential. (4) A person to whom an invitation is sent may submit a price proposal to the Commission within the period specified therein. In addition to the price proposal, the person submits:
5. a declaration of compliance with the requirements of Art. 6, para. 1, items 9 - 12 - for a person under Art. 2, item 1 and Art. 3 - 5;
6. a declaration of compliance under Art. 6, para. 2, items 4 - 7 and a declaration from the registered auditor practicing the profession in the audit firm under Art. 6, para. 2, item 8 - for an audit firm under Art. 2, item 2. (5) (Amend. - SG, No. 20 of 2025, effective from the date of introduction of the euro in the Republic of Bulgaria) The price proposal must contain a final price in euros including value added tax and is submitted to the Commission in a separate sealed opaque envelope. (6) Price proposals received in the registry office of the Commission after the end of working hours on the last day of the period under para. 2, item 4 are not considered. (7) The declarations and price proposals are examined by an expert commission with an odd number of members, appointed by order of the Deputy Chairman of the Commission. (8) The price proposals are opened after the expiration of the period under para. 2, item 4. (9) The expert commission examines the received documents and ranks the price proposals, with the proposal with the lowest price ranked first. Price proposals from:
7. natural persons who do not meet the requirements under Art. 6, para. 1, items 9 - 12 or have not duly declared compliance with them;
8. audit firms that do not meet the requirements under Art. 6, para. 2, items 4 - 8 or have not duly declared compliance with them; do not participate in the ranking. (10) In case there are two or more numerically equal price proposals ranked first, the expert commission determines the person with the greatest professional experience, and if all persons have equal experience - by lot. (11) In case the person ranked first, respectively the person determined under para. 10, withdraws their price proposal before their appointment by the Commission, a new person is determined for carrying out the assessment or check in accordance with the results of the ranking under para. 9, with para. 10 being applied correspondingly. (12) The expert commission draws up a protocol of its activities. (13) The person determined under the procedure of para. 7 - 11 is appointed by a decision of the Commission upon proposal of the Deputy Chairman of the Commission.

Art. 13. Upon the occurrence of any of the circumstances under Art. 11, items 2 - 4 and 6 during the carrying out of the respective check or assessment by the person appointed under Art. 12, para. 13, the carrying out thereof is terminated and a new person is appointed under Art. 12.

Art. 14. (1) The Commission publishes an invitation on its internet page for participation in a procedure for determining a person under Art. 344, para. 2, item 2 of the SSC in cases when:

1. a list with the respective type of persons under Art. 2 - 5 has not been approved;
2. the respective list under Art. 7, para. 1 has fewer than two persons to whom an invitation under Art. 12, para. 1 can be sent;
3. during the period determined in the invitation under Art. 12, para. 1, no price proposal is received by the Commission;
4. none of the persons submitting price proposals under Art. 12, para. 4 meet the requirements under Art. 6, para. 1, items 9 - 12, respectively under Art. 6, para. 2, items 4 - 8, or have not duly declared compliance with them, or
5. all persons submitting price proposals under Art. 12, para. 4, who meet the requirements under Art. 6, para. 1, items 9 - 12, respectively under Art. 6, para. 2, items 4 - 8, and have duly declared compliance with them, withdraw their proposals before the appointment of a person under Art. 12, para. 13. (2) Within the period determined in the invitation under para. 1, persons wishing to carry out the respective check or assessment submit to the Commission the documents under Art. 8, para. 2. (3) The Commission sends an invitation under Art. 12, para. 2 to persons who meet the respective requirements under Art. 2 - 5 and Art. 6, para. 1, items 1 - 8 or para. 2, items 1 - 3 and have submitted proper documents under para. 2. (4) The provisions of Art. 12, para. 3 - 13 are applied correspondingly.

Additional Provision § 1. For the purposes of this Ordinance, "Recognized Professional Qualification of an Internal Auditor" is the qualification certified by the Certified Internal Auditor (CIA) or Certified Government Auditing Professional (CGAP) certificates, issued by the Institute of Internal Auditors, the international professional organization of internal auditors, or by the certificate "internal auditor in the public sector", issued by the Minister of Finance.

Transitional and Final Provisions § 2. Within one month from the entry into force of this Ordinance, the Commission publishes an invitation on its internet page for submission of applications under Art. 8, para. 2, which are examined under Art. 8 and 9. § 3. This Ordinance is issued on the basis of Art. 344, para. 9 of the SSC and is adopted by Decision No. 1099 of 29.11.2018 of the Commission for Financial Supervision. § 4. This Ordinance enters into force on the day of its publication in the "State Gazette".

Chairman: Karina Karaivanova

Transitional and Final Provisions to ORDINANCE No. 70 of 29.06.2021 on the requirements for payment funds (SG, No. 60 of 20.07.2021) § 11. In Ordinance No. 64 of 29.11.2018 on the requirements for the persons under Art. 344, para. 2, item 2 of the Social Security Code and the procedure and manner of their appointment (SG, No. 102 of 2018), in Art. 3, in the text before item 1 after the words "supplementary social security fund", a comma is placed and ", a payment fund" is added.

Transitional and Final Provisions to the Ordinance on Amendment and Addition to Ordinance No. 63 of 8.11.2018 on the requirements for the content, periodicity of preparation and deadlines for submission of supervisory reports of pension insurance companies and the funds managed by them (SG, No. 70 of 20.08.2024) § 26. In Ordinance No. 64 of 29.11.2018 on the requirements for the persons under Art. 344, para. 2, item 2 of the Social Security Code and the procedure and manner of their appointment (pub., SG, No. 102 of 2018; amend., No. 60 of 2021), the following amendments are made:

1. In Art. 6, para. 1, item 12, the words "pensioner or heir" are replaced with "person insured under a PEPP, pensioner, PEPP beneficiary or heir".
2. Everywhere in the Ordinance, the word "commission" is replaced with "Commission".

Provisions to the Ordinance on Amendment and Addition to Regulatory Acts of the Commission for Financial Supervision (SG, No. 20 of 11.03.2025, effective from the date of introduction of the euro in the Republic of Bulgaria) § 16. In Ordinance No. 64 of 29 November 2018 on the requirements for the persons under Art. 344, para. 2, item 2 of the Social Security Code and the procedure and manner of their appointment (pub., SG, No. 102 of 2018; amend. and add., No. 60 of 2021 and No. 70 of 2024), in Art. 12, para. 5, the words "Bulgarian leva" are replaced with "euros".