Ordinance No. 17 of 07.07.2004 on Documents Required for Issuing a Permit for the Transformation of Pension Insurance Companies and Additional Pension Funds and Requirements for Plans

ORDINANCE No. 17 of 07.07.2004 on the documents required for issuing a permit for the transformation of pension insurance companies and funds for additional pension insurance and on the requirements for the plans under Art. 327, para. 1, item 3 and Art. 336, para. 1 of the Social Security Code

Pub. - State Gazette, No. 65 of 27.07.2004; amended and supplemented, No. 102 of 05.12.2007, effective from 08.12.2007; amended and supplemented, No. 18 of 27.02.2018, effective from 27.02.2018; amended, No. 41 of 21.05.2019; amended and supplemented, No. 59 of 16.07.2021; amended and supplemented, No. 70 of 20.08.2024.

Adopted by Decision No. 25-N of 7.VII.2004 of the Commission for Financial Supervision

Section I
General Provisions

Art. 1. (Amended - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 59 of 2021) This Ordinance determines:

1. (Supplemented - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 59 of 2021)
   the necessary documents for obtaining a permit for the transformation of pension insurance companies and the additional pension funds and payment funds managed by them, hereinafter referred to as "funds" under Art. 321, para. 1, item 4 and Art. 323, para. 2 of the Social Security Code (SSC) and the requirements for the content of these documents;
2. the necessary documents for obtaining a permit for the voluntary termination of a pension insurance company under Art. 327, para. 1, item 4 of the SSC and the requirements for the content of these documents;
3. the requirements for the content of the liquidation plan of a pension insurance company;
4. the requirements for the content of the trustee's plan in the event of insolvency of a pension insurance company.

Section II
Necessary Documents for Obtaining a Permit for Transformation by Merger or Absorption of Pension Insurance Companies and Requirements for Their Content

Art. 2. (Amended and supplemented - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 18 of 2018, effective from 27.02.2018; amended, No. 41 of 2019; amended and supplemented, No. 59 of 2021; amended and supplemented, No. 70 of 2024) (1) (Amended and supplemented - State Gazette, No. 102 of 2007, effective from 08.12.2007) To obtain a permit under the procedure of Art. 321 of the SSC for transformation by merger or absorption, pension insurance companies submit to the Commission for Financial Supervision, hereinafter referred to as "the Commission", an application in a form approved by the Deputy Chairman of the Commission, heading the "Insurance Supervision" Directorate, hereinafter referred to as "the Deputy Chairman", to which they attach:

1. (Repealed - State Gazette, No. 102 of 2007, effective from 01.03.2008);
2. the decision on transformation by merger or absorption of the general meeting of shareholders of each transforming or absorbing company under Art. 262o of the Commerce Act (CA), including decisions on:
   a) approval of the transformation agreement; b) increase of the capital of the absorbing company in case of absorption; c) management or transformation of any fund; d) (Supplemented - State Gazette, No. 59 of 2021) the procedure and method for determining the exchange ratio of shares in the individual accounts of insured persons and pensioners as of the transformation date under Art. 263j, para. 1 of the CA; e) (Repealed - State Gazette, No. 102 of 2007);
3. the transformation agreement;
4. the report of the management body of each participating company in the transformation under Art. 262i of the CA;
5. (Amended - State Gazette, No. 59 of 2021; amended, No. 70 of 2024) the auditor's report under Art. 262m of the CA, which also includes an opinion on the financial security of the company and its solvency after the transformation, the guarantees for the preservation of the rights of insured persons, persons insured under PEPP, pensioners and PEPP beneficiaries in the managed funds and the adequacy of the prescribed procedure and method for determining the exchange ratio of shares in the individual accounts;
6. (Amended - State Gazette, No. 59 of 2021; amended, No. 70 of 2024) the expert opinion on the correct use of the rules by which the assets of the funds were valued, the accuracy of the data on the investment portfolios of the managed additional pension funds, respectively the sub-funds in the voluntary pension funds for PEPP and the payment funds and the realized return for each additional pension fund/sub-fund separately, contained in the transformation agreement, as well as a declaration that the experts meet the requirements of para. 3;
7. the articles of association of the newly established company or amended or supplemented articles of association of the absorbing company;
8. (Supplemented - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 18 of 2018, effective from 27.02.2018; amended, No. 41 of 2019; amended, No. 59 of 2021) the financial statements of the company and the funds managed by it, with the components under Art. 29, para. 9 of the Accounting Act, prepared as of the date under Art. 3, item 13;
9. (Amended - State Gazette, No. 59 of 2021) the reports under Art. 10, para. 1 of Ordinance No. 10 of 29.06.2021 on the requirements for the solvency margin and own funds of the pension insurance company, its recovery program and the minimum liquid resources of the company and the funds managed by it (Ordinance No. 10) (State Gazette, No. 59 of 2021), prepared as of the date under Art. 3, item 13;
10. (Supplemented - State Gazette, No. 41 of 2019; amended, No. 59 of 2021; amended, No. 70 of 2024) the reports under Art. 23, para. 1 and 2 of Ordinance No. 9 of 19.11.2003 on the valuation of assets and liabilities of the pension insurance company and the funds managed by it, on the calculation of the value of net assets, of one share and of the return from investment properties and on the maintenance of individual accounts, Pan-European Pension Product (PEPP) accounts and analytical accounts in a payment fund (Ordinance No. 9) (State Gazette, No. 109 of 2003) of each managed fund, prepared as of the date under Art. 3, item 13;
11. (New - State Gazette, No. 102 of 2007, effective from 08.12.2007) reports on the reserves formed for guaranteeing minimum return for each additional mandatory pension fund according to Art. 9 of Ordinance No. 12 of 2003 on the manner and procedure for determining minimum return in the management of assets of additional mandatory pension funds, for covering the difference to minimum return and for forming and using reserves for guaranteeing minimum return (Ordinance No. 12) (State Gazette, No. 110 of 2003), prepared as of the date under Art. 3, item 12;
12. (New - State Gazette, No. 102 of 2007, effective from 08.12.2007; repealed, No. 41 of 2019; new, No. 59 of 2021) reports on reserves for guaranteeing gross contributions for each universal pension fund according to Art. 5 of Ordinance No. 68 of 10.06.2021 on the reserves of pension insurance companies for guaranteeing the gross amount of contributions in universal pension funds (Ordinance No. 68) (State Gazette, No. 52 of 2021);
13. (Previous item 11 - State Gazette, No. 102 of 2007, effective from 08.12.2007) the permit from the Commission for Protection of Competition under Art. 321, para. 1, item 2 of the SSC;
14. (Previous item 12 - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 18 of 2018, effective from 19.11.2018) for the newly established company - the documents under Art. 122a, para. 1, items 3, 4, 6, 7, 9 - 11 and para. 2 of the SSC;
15. (Previous item 13 - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 18 of 2018, effective from 19.11.2018; amended, No. 59 of 2021) for the absorbing company - the documents under Art. 122a, para. 1, items 5, 10 and 11 and Art. 123e, para. 4, item 6, letter "b", and in case of changes in the management and supervisory bodies - also the documents under Art. 122a, para. 1, items 3, 4 and 9 of the SSC;
16. (Previous item 14 - amended, No. 102 of 2007, effective from 08.12.2007; supplemented, No. 59 of 2021) the regulations on the organization and activities of the managed additional pension funds after the transformation and the decisions on their amendment or adoption;
17. (new - State Gazette, No. 59 of 2021) the rules of each payment fund after the transformation and the decisions on their amendment or adoption;
18. (Previous item 15 - amended, No. 102 of 2007, effective from 08.12.2007; previous item 17, amended, No. 59 of 2021) the actuarial calculations for the proposed pension schemes in each fund after the transformation, the biometric tables for each additional voluntary pension fund after the transformation and the personal data of the responsible actuary of the company;
19. (Previous item 16 - State Gazette, No. 102 of 2007, effective from 08.12.2007; previous item 18, amended, No. 59 of 2021; supplemented, No. 70 of 2024) the samples of insurance and pension contracts, respectively PEPP contracts, for each fund after the transformation, as well as the samples of notifications under Art. 340, para. 1 - 3 of the SSC;
20. (Previous item 17 - State Gazette, No. 102 of 2007, effective from 08.12.2007; previous item 19, No. 59 of 2021; supplemented, No. 70 of 2024) the draft contracts with investment intermediaries and contracts with trustee banks, respectively depositaries under Art. 214a, para. 4 of the SSC, for activities after the transformation;
21. (New - State Gazette, No. 102 of 2007, effective from 08.12.2007; previous item 20, No. 59 of 2021) the rules for the valuation of assets and liabilities of the pension insurance company and the funds managed by it after the transformation;
22. (New - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 18 of 2018, effective from 27.02.2018; previous item 21, No. 59 of 2021) the internal rules under Art. 179v, para. 1 of the SSC after the transformation;
23. (New - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 18 of 2018, effective from 27.02.2018; previous item 22, No. 59 of 2021) the investment policy of the additional pension fund after the transformation;
24. (Previous items 18 and 19 - State Gazette, No. 102 of 2007, effective from 08.12.2007; repealed, No. 18 of 2018, effective from 27.02.2018 as previous item 19; previous item 23, No. 59 of 2021) the report on the organizational structure of the newly established or absorbing company and its staffing.

(2) The written reports of the management bodies under para. 1, item 4, in addition to the requisites under Art. 262i of the CA, must include:

1. data on the experts appointed under para. 3;
2. justification of the reasons necessitating the transformation;
3. (Amended - State Gazette, No. 59 of 2021) the procedure and method for determining the exchange ratio of shares in the individual accounts of insured persons and pensioners in the managed additional pension funds as of the transformation date under Art. 263j, para. 1 of the CA, the methods for valuing the assets of additional pension funds and payment funds and the difficulties in valuation, if any have arisen.

(3) The expert opinion under para. 1, item 6 is prepared by at least three independent experts, approved by the management bodies of each participating company in the transformation, who possess professional qualification and experience in the field of property or investment valuation and who in the last 3 years have not been in employment or civil law relations with any of the companies participating in the transformation and are not spouses, relatives up to the third degree by blood or affinity, including by marriage, of a member of their management or supervisory bodies.

Art. 3. (Amended and supplemented - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 41 of 2019; amended and supplemented, No. 59 of 2021; amended, No. 70 of 2024) The transformation agreement of a pension insurance company under Art. 2, para. 1, item 3, in addition to the requisites under Art. 262j, para. 2, items 1 - 7 and 9 of the CA, must necessarily contain:

1. (Amended - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 59 of 2021; amended, No. 70 of 2024) the guarantees for the preservation of the rights of insured persons, persons insured under PEPP, pensioners and PEPP beneficiaries and the obligations undertaken by the parties to them in connection with the transformation, including the manner and procedure for notifying according to Art. 340, para. 1 - 3 of the SSC of each person, pensioner, insurer and insurance enterprise regarding their rights;
2. (Amended - State Gazette, No. 59 of 2021; amended, No. 70 of 2024) valuation of assets and liabilities of each fund managed by a participant in the transformation, net asset value of the fund, respectively of each sub-fund in the voluntary pension funds for PEPP, as well as the total number of shares and the value of one share for each additional pension fund, respectively sub-fund;
3. (Supplemented - State Gazette, No. 59 of 2021) the procedure and method by which the exchange ratio of shares in the individual accounts of insured persons and pensioners as of the transformation date under Art. 263j, para. 1 of the CA will be determined;
4. (Amended and supplemented - State Gazette, No. 59 of 2021) justification of the valuation under item 2 and of the procedure and method for determining the exchange ratio under item 3, the valuation rules for assets and liabilities to be adopted after the transformation, as well as the indication of the valuation rules for assets and liabilities of each company participating in the transformation;
5. (Amended and supplemented - State Gazette, No. 59 of 2021; amended, No. 70 of 2024) composition and structure of the investment portfolio of each fund managed by the parties to the agreement, respectively sub-fund in the voluntary pension funds for PEPP, and the achieved return from investing the funds of each additional pension fund, respectively sub-fund, for the last two years;
6. (Amended - State Gazette, No. 70 of 2024) number of insured persons and pensioners in each fund managed by the parties, respectively sub-fund;
7. (Amended - State Gazette, No. 70 of 2024) total amount of paid pensions and amount of paid funds by type of pensions for each fund managed by the parties to the agreement, respectively sub-fund, for a one-year period;
8. (Amended - State Gazette, No. 70 of 2024) amount of obligations undertaken by the parties to the agreement towards insured persons, persons insured under PEPP, pensioners, PEPP beneficiaries and their heirs, by type of payments for each managed fund, respectively sub-fund;
9. (Amended - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 41 of 2019; supplemented, No. 59 of 2021) total amount of formed pension reserves for the corresponding additional voluntary pension funds in each company participating in the transformation, their compliance with obligations undertaken towards pensioners and the manner of their management after the transformation;
10. (new - State Gazette, No. 59 of 2021) total amount of reserves formed in each company participating in the transformation for guaranteeing the payment of life pensions for the corresponding funds for the payment of life pensions, their compliance with obligations undertaken towards pensioners and the manner of their management after the transformation;
11. (previous item 10, supplemented - State Gazette, No. 59 of 2021) amount of reserves formed under Art. 193, para. 8 and 193a, para. 1 of the SSC in each company participating in the transformation;
12. (previous item 11, supplemented - State Gazette, No. 59 of 2021) indication that the data under items 2 and 5 - 11 are determined as of the date under item 13;
13. (previous item 12 - State Gazette, No. 59 of 2021) the date from which the actions of the transforming companies are deemed to have been carried out on behalf of the newly established or absorbing companies and the funds managed by them for accounting purposes, which cannot precede by more than one month the date of conclusion of the agreement;
14. (previous item 13 - State Gazette, No. 59 of 2021; amended, No. 70 of 2024) data on the trustee/depositary banks under Art. 214a, para. 4 of the SSC of the funds managed by each party to the agreement, and the trustee/depositary banks of the funds after the transformation;
15. (previous item 14 - State Gazette, No. 59 of 2021; amended, No. 70 of 2024) procedure for transferring monetary funds and transferring bearer securities to accounts in the new trustee/depositary banks under Art. 214a, para. 4 of the SSC and for handing over the available securities, ownership documents and other documents related to the execution of the trustee service agreement, respectively depositary service agreement, for each fund managed by the parties;
16. (Supplemented - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 41 of 2019; previous item 15, amended, No. 59 of 2021) procedure and method for transferring the reserves formed in the transforming companies under Art. 192, para. 2, Art. 193, para. 8, Art. 193a, para. 1 and Art. 213, para. 2 of the SSC;
17. (previous item 16 - State Gazette, No. 59 of 2021) procedure and method for transferring the archives of the funds of the transforming companies and the persons responsible for this;
18. (Amended - State Gazette, No. 102 of 2007, effective from 08.12.2007; previous item 17, No. 59 of 2021) the manner in which the electronic exchange of information will be carried out, the persons responsible for the exchange, as well as the system that will be adopted after the transformation;
19. (previous item 18 - State Gazette, No. 59 of 2021) the general accounting policy that will be adopted, as well as the methods for overcoming differences between the accounting policies of the companies participating in the transformation;
20. (previous item 19 - State Gazette, No. 59 of 2021) data on the experts under Art. 2, para. 3.

Section III
Necessary Documents for Obtaining a Permit for Transformation by Separation or Division of Pension Insurance Companies and Requirements for Their Content

Art. 4. (Amended and supplemented - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 18 of 2018, effective from 27.02.2018; amended, No. 41 of 2019; amended and supplemented, No. 59 of 2021; amended, No. 70 of 2024) (1) To obtain a permit for transformation by division or separation, pension insurance companies submit to the Commission an application in a form approved by the Deputy Chairman, to which they attach:

1. (Repealed - State Gazette, No. 102 of 2007, effective from 01.03.2008)
2. the decision on transformation by division or separation of the general meeting of each transforming or absorbing company according to Art. 262o of the CA, including decisions on:
   a) management of funds after the transformation; b) (Amended and supplemented - State Gazette, No. 59 of 2021) procedure and method for determining the exchange ratio of shares in the individual accounts of insured persons and pensioners as of the transformation date under Art. 263j, para. 1 of the CA, in cases where, upon division or separation, a managed additional pension fund is absorbed into another corresponding fund; c) (Repealed - State Gazette, No. 102 of 2007, effective from 08.12.2007) d) increase, respectively decrease, of capital;
3. the transformation agreement between the transforming and absorbing companies in cases where the property of the transforming company and the management of funds established by it pass to existing pension insurance companies;
4. the transformation plan, when the property of the transforming company and the management of funds established by it pass to newly established pension insurance companies;
5. the permit from the Commission for Protection of Competition in cases under item 3;
6. (Amended - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 18 of 2018, effective from 27.02.2018; amended, No. 41 of 2019; amended, No. 59 of 2021) the documents under Art. 2, para. 1, items 4 - 12 and 14 - 24.

(2) (Amended - State Gazette, No. 70 of 2024) The transformation agreement by division or separation, in addition to the requisites under Art. 3, contains data on the distribution of funds after the transformation with the indication of the company that will manage each of them according to Art. 318, para. 5 of the SSC.

(3) The transformation plan includes the data contained in the transformation agreement under para. 2, as well as the data under Art. 262j, para. 3 of the CA.

(4) The written reports of the management bodies for the division or separation and the expert opinion must meet the requirements of Art. 2, para. 2, respectively Art. 2, para. 1, item 6.

Section IV
Necessary Documents for Obtaining a Permit for Transformation of an Additional Pension Fund and a Payment Fund and Requirements for Their Content (Title supplemented - State Gazette, No. 59 of 2021)

Art. 5. (Amended and supplemented - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 18 of 2018, effective 27.02.2018; amended, No. 41 of 2019; amended and supplemented, No. 59 of 2021; amended and supplemented, No. 70 of 2024) (1) To obtain a permit for the transformation of an additional pension fund under the conditions of Art. 320, para. 4 of the SSC, pension insurance companies submit an application in a form approved by the Deputy Chairman, to which they attach the following documents:

1. (Repealed - State Gazette, No. 102 of 2007, effective from 01.03.2008)
2. (Supplemented - State Gazette, No. 59 of 2021) the decision on the absorption of the additional pension fund and payment funds, adopted by the general meeting of shareholders of each participating pension insurance company in the transformation;
3. the permit from the Commission for Protection of Competition under Art. 323, para. 2 of the SSC;
4. (Supplemented - State Gazette, No. 59 of 2021) the transformation plan of the additional pension fund;
5. (new - State Gazette, No. 59 of 2021) a transformation plan for each established payment fund - upon transformation of a universal pension fund;
6. (previous item 5 - State Gazette, No. 59 of 2021) the auditor's report, meeting the requirements of Art. 262l, para. 2 and 3 of the CA;
7. (previous item 6 - State Gazette, No. 59 of 2021) the report of the management body of each company participating in the transformation;
8. (previous item 7, amended - State Gazette, No. 59 of 2021) the expert opinion on the plans under items 4 and 5, prepared by an independent expert meeting the conditions under Art. 2, para. 3;
9. (Supplemented - State Gazette, No. 102 of 2007, effective from 08.12.2007; amended, No. 18 of 2018, effective from 27.02.2018; amended, No. 41 of 2019; previous item 8, amended, No. 59 of 2021) the financial statement of each pension insurance company and each absorbing and receiving fund with the components under Art. 29, para. 9 of the Accounting Act, prepared as of the date under para. 4, item 15;
10. (previous item 9, amended - State Gazette, No. 59 of 2021) the reports under Art. 10, para. 1 of Ordinance No. 10 of each company and each absorbing and receiving fund as of the date under para. 4, item 15;
11. (previous item 10, amended - State Gazette, No. 59 of 2021) the reports under Art. 23, para. 1 and 2 of Ordinance No. 9 of the absorbing and receiving additional pension fund as of the date under para. 4, item 15;
12. (new - State Gazette, No. 102 of 2007, effective from 08.12.2007; previous item 12, repealed, No. 41 of 2019; previous item 11, No. 59 of 2021) reports on the reserve formed for guaranteeing minimum return for each additional mandatory pension fund according to Art. 9 of Ordinance No. 12, prepared as of the date under para. 4, item 15;
13. (new - State Gazette, No. 59 of 2021) reports on reserves for guaranteeing gross contributions for each universal pension fund according to Art. 5 of Ordinance No. 68;
14. (previous item 11, amended and supplemented - State Gazette, No. 102 of 2007, effective from 08.12.2007; previous item 13, supplemented, No. 59 of 2021) amended and supplemented regulations of the receiving additional pension fund and the protocol from the meeting of the corresponding management body with the decision on its amendment;
15. (new - State Gazette, No. 59 of 2021) amended and supplemented rules of each receiving payment fund and the protocol from the meeting of the corresponding management body with the decision on its amendment - upon transformation of a universal pension fund;
16. (previous item 12, amended - State Gazette, No. 102 of 2007, effective from 08.12.2007; previous item 14, amended, No. 59 of 2021) actuarial calculations for the proposed pension schemes in each receiving fund and biometric tables of the receiving additional voluntary pension fund