The bankruptcy of Euroins Romania, the leader in the RCA segment, will not have the same impact as the bankruptcy of City Insurance, says Cristian Rosu, vice president of the Financial Supervisory Authority (ASF), in charge of insurance. – The reinsurance sector is inside the institution, but warns that prices may rise, reports Profit.ro.

• “With the exit of Euroins Romania, the Romanian insurance market is finally being cleared. The current situation of Euroins Romania and the insurance market is significantly different for the better from the period of insolvency of City Insurance. The company, following the audits carried out by the ASF, is almost current with payments, the recourse relationship between the company and other insurers in the market is almost current, the claims in the amount paid by the company are almost current. Overall, Euroins is not in the situation of City Insurance, and the impact of Euroins’ exit will not be similar to that caused by the insolvency of City Insurance,” Rosu said.

RCA policy prices may increase

However, ASF’s vice-president expressed concern that RCA policy prices, already fueled by City Insurance’s insolvency, could rise after Euroins exits the market.

• “ASF is currently working on a draft proposal to freeze the selling prices of RCA policies practiced by companies authorized to issue this type of insurance. We are analyzing in the institution from which date to freeze these prices, i.e. at the level of August 2022. or from March 2022.”

It also says that RCA’s price freeze will be accompanied by compensatory measures for insurers.

• “The authority is abolishing the commission of 1% of the value of RCA policies sold, the commission that insurers pay to the institution,” he said.

Learn more at Profit.ro.

After the bankruptcy of “City Insurance” a year and a half ago, the scenario is repeated with “Euroins”, which in 2022 became the company with the largest number of car civil liability policies.

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: the impact of the bankruptcy announcement on sources. What’s Next / ASF Official Notice / Company Accused of Hostile Takeover
  
• ASF did not report all sanctions imposed on Euroins bankruptcy – DOCUMENT