Bulgarian insurance companies have hit out at the government’s proposal to tax a company’s turnover rather than their profits as one of the many anti-crisis measures.

The tax that is proposed would allegedly bring in an extra BGN 107 M to the state budget but the Association of Bulgarian Insurers have suggested that it would lead to a BGN 120-130 M loss in 2010 for Bulgaria’s insurance companies, that they can ill afford during the current financial crisis.

“The levy will put companies at a disadvantage as it will deprive them of being able to cover losses from previous years…. which will lead to the bankruptcy of many companies,” ABI Chair Orlin Penev stated.

On March 22, a Bulgaria Insurance Report concluded that the country's industry is facing a difficult period in both the life and non-life sectors.

The report, published by Business Monitor International (BMI) warned that the Bulgarian insurance market is crowded, and predicts some rationalization by companies over the coming year.

The market has also been directly affected by the onset of the global and regional economic difficulties, according to the report.