The Financial Conduct Authority (ASF), led by Nick Mark, did not disclose all the sanctions imposed on Euroins on Friday. The former RCA leader was also fined 224,100 lei, “reduced by 98% in view of the state of bankruptcy established by the body,” according to the ASF decision, a document seen by HotNews.ro.

What is written in the sanctioning decision, Euroins did not report to the ASF

• “Article 1 – (1) In accordance with the provisions of Art. 163 par. (1) lit. a) illuminated. b), let. e) and letter r), par. (2) lit. b) and par. (5.1) and the criteria provided for in Art. 163 paragraph (11), paragraph (15), paragraph (19) from Law No. 237/2015 on authorization and supervision of insurance and reinsurance activities (..) with reference to the provisions of Art. 10 Government Resolution No. 2/2001 regarding the legal regime of offenses approved with amendments by Law No. 180/2002 (..) the company Euroins Romania Asigurare Reinsurance was fined in the amount of 224,100 lei.
• (2) The fine is paid to the state budget in the proportion of 50%, and the difference of 50% is paid to the budget of the ASF (..) and is paid within 15 days from the date of notification of the decision.
• (3) Within 2 working days from the date of payment of the fine, Euroins Romînia will send ASF a copy of the proof of payment of the fine.
• (4) The decision of the ASF establishing and individualizing the payment obligations referred to in paragraph (1) constitutes the right of ownership of the debt, which on the date of payment becomes an executive document, on the basis of which the ASF begins a similar procedure for the compulsory collection of its debts (.. .)”, This is stated in the sanction decision signed on Friday, March 17, by ASF President Nick Mark.

Further in Art. 2 of the decision provides for the revocation of the permit for the activity of the Euroins company, and in Art. 3 “the state of insolvency of the company has been established and the AFS has been appointed to file a claim on the opening of bankruptcy proceedings against Euroins”.

On Art. 4 of the decision “is named the Guaranty Fund for Policyholders as a temporary administrator of Euroins, with the duties of ensuring the administration and management of the company and taking the necessary measures to prevent the reduction of its assets and the increase of its liabilities, while preserving the company’s property.”

In Article 5 para. (1) in the ASF decision, it is stipulated that “Euroins is obliged to take all necessary steps to inform the policyholders, both about their possibility to terminate the insurance contracts concluded with the company, and about their right to reimbursement of premiums. insurance paid within the scope of the contracts, in proportion to the period between the moment of denunciation and the expiration of the contracts”.

• (2) Any person who invokes the right of claim against Euroins, after the occurrence of risks covered by a valid insurance policy, between the date of withdrawal of the operating permit and the date of termination of the insurance contracts, will be able to request the opening of a claim case at the Policyholders’ Guarantee Fund.
• (3) Within 30 days from the date of publication of the decision on the revocation of the operating permit in the Official Gazette (..), the company is obliged to submit to the Policyholder’s Guarantee Fund a list of insurance contracts valid on the date of revocation of the operation of the company’s operating permit, complete records of claims files, and as well as technical-operational and accounting records related to these contracts and files, for the purpose of publishing a list of potential insurance creditors, beneficiaries of sums belonging to the insured’s Guarantee Fund (.. ).
• (4) On the day of publication of the ASF decision in the Official Gazette (..), insurance creditors have the right to demand payment of sums belonging to the Insured’s Guarantee Fund.
• (5) When applying the provisions of Art. 13 para. (5) of Law 237/2015, the company is prohibited from freely disposing of assets consisting of land and buildings belonging to it, as well as assets, deposits in banks and cash registers or any other placements in issuing institutions, except for the use of available funds for the payment of costs arising from contracts concluded with utilities providers, including rent, payment of wages and related contributions, fees and taxes, executive documents in accordance with the law, as well as other related costs and necessary for the preservation of the heritage enterprises.

FGA – obliged to do everything possible to cancel retroactively the reinsurance contract entered into by Euroins with EIG Re

In Article 5 para. (6) “The policyholders’ guarantee fund undertakes to take all necessary measures to terminate, with retroactive effect, the reinsurance contract concluded with EIG Re, which was notified to the ASF by the company at address no. SC – 3266.4/22.02.2023 (…), respectively, regarding the return of the assets transferred under this contract, for the issues outlined in this decision.

Article 6 of the decision of the ASF states that “responsibility for fulfilling the obligations specified in Article 5 para. (1), (3) and (5) are the responsibility of the legal representatives of the company, as well as persons who perform key functions in it.

Article 7 of the decision stipulates that “against this decision, Euroins may file an appeal with the Bucharest Court of Appeal within 30 days from the date of notification of the decision.

According to the ASF’s decision, seen by HotNews.ro, the appeal sent to the Court of Appeal in Bucharest does not suspend the implementation of the measures pending the review.

ASF was officially announced on Friday that he has decided to withdraw the authorization to carry out activities and file a bankruptcy case against Euroins, and the management of the company will be taken over by the Fund for the Guarantee of Insurers (FGA).

The insurer will need funds in the amount of 2.19 billion lei for the solvency capital requirement, the authority reports. Bulgarian group Eurohold reacted by accusing a hostile takeover of Euroins assets. According to HotNews.ro, Euroins Romania had 2.76 million active RCA policies at the end of January 2023.

• Read more: Euroins: consequences of bankruptcy announcement for sources. What’s Next / ASF Official Notice / Company Accused of Hostile Takeover