​In the absence of any impact studies carried out by the FSA on RCA price caps, insurance brokers have carried out an analysis of the income of 30,000 insurance distributors who broker income from the sale of RCA policies. to this work.

The broker has a net profit of 1,271 lei to 1,525 lei per month from RCA

The Romanian Board of Insurance and Reinsurance Brokers (PRBAR) presented on Wednesday an impact analysis on limiting the distribution commission to 8% of RCA policies.

• “On 30.09.2022, according to the latest ASF market report with official data, insurance class A10 (which includes RCA and CMR) meant premiums of 5,477,781,874 lei, of which 5,353,967,038 lei through insurance brokers and networks, their distribution : 97.7%.
• According to the same report (page 57), the income received by the A10 class for insurance distributors was 686,385,332 lei.
• The distribution of income received on intermediate premiums shows that the value of the average commission for class A 10 was for the first 9 months of 2022 12.82% of the premium collected.
• The income collected by distributors, 686,385,332 lei, must be divided into 9 months and approx. According to the register of secondary intermediaries maintained by ASF, there are 30,000 distributors officially active in the insurance market.
• This results in a gross income of approx. 2,542 lei/month/person, and more than 40% of this amount is taxes, excises, and direct and indirect taxes collected by the Romanian state.
• However, to generate this gross income there are costs: rent, utilities, fuel, telecommunications, mandatory courses and exams, consumables, IT equipment, policy costs, PJ accounting, costs of compliance with certain legislation (GDPR and law 236 /2018), costs for notifying the client about the expiration of the validity period, bank costs for collecting and transferring premiums, processing, administration, back office and others.
• The net income is from 50% to 60% of 2542 lei, i.e. from 1271 to 1525 lei/month, insufficient income for the life of an insurance worker, but which he supplements with income from general insurance or other activities. it is stated in the PRBAR press release.

The restriction will halve the income of brokers and many will leave the profession

Брокери попереджають[що«якщообмежитиброкерськукомісіюRCAнарівнімаксимум8%середнякомісіяRCAзменшитьсядо5%меншеніжнаполовинупорівняноізсереднімпоказникомза9місяцівз2022рокутобтоприблизно30000дистриб’юторівматимутьменшеполовинисвогодоходуібагатохтозалишитьбізнес»[că„prinplafonareacomisionuluideintermediereRCAlamaxim8%mediacomisionuluilaRCAcoboarăspre5%subjumătatefațădemediacelor9lunidin2022decicca30000dedistribuitorivoraveaveniturisubjumătateiarmulțivorrenunțalaaceastămeserie”[що«якщообмежитиброкерськукомісіюRCAнарівнімаксимум8%середнякомісіяRCAзменшитьсядо5%меншеніжнаполовинупорівняноізсереднімпоказникомза9місяцівз2022рокутобтоприблизно30000дистриб’юторівматимутьменшеполовинисвогодоходуібагатохтозалишитьбізнес»[că„prinplafonareacomisionuluideintermediereRCAlamaxim8%mediacomisionuluilaRCAcoboarăspre5%subjumătatefațădemediacelor9lunidin2022decicca30000dedistribuitorivoraveaveniturisubjumătateiarmulțivorrenunțalaaceastămeserie”

• “Due to the fact that Romania is not sufficiently insured, only 20% of houses have mandatory insurance and only approx. 15% have optional insurance,” says the analysis of the Association of Brokers.

Brokers say that in addition to the negative effects on the insurance industry, the state will also collect half of what it collects today as a result of the halved income of these workers.

• “The authorities did not conduct the simple analysis above, nor did they evaluate the work of the distributors, nor the impact on them. As it stands, the government’s advanced regulatory proposal is a boomerang that will hit the distribution market and ultimately the consumer.
• In conclusion, government intervention by capping the distribution commission is unjustified, but we can agree to freeze these commissions for the duration of the tariff freeze, in solidarity with the authorities’ efforts to stop RCA price increases and in solidarity with our customers.” this is also shown in the PRBAR press release.

Insurance brokers accuse them of discrimination by insurance companies

Insurance brokers oppose capping the distribution commission at 8% of the RCA price and ask the authorities to freeze this commission at the level stipulated in the distribution contracts signed with insurance companies on February 28, 2023, as insurers will also be forced to sell RCA at the prices of the last day of this February year

The National Union of Insurance Brokers and Consultants (UNSICAR), an organization representing 80 insurance brokerages, reacted on Tuesday to a new draft by the ASF to cap RCA prices at 28 February 2023.

• “UNSICAR members understand the efforts of the authorities to prevent possible negative consequences for consumers as a result of the insolvency of Euroins Romania, but limiting the commission of brokers at the level of 8% is not the right solution for the market. in which we work. As stated in the project, the only element that is limited in the project is the commission of intermediaries, the rest of the elements are frozen at the market price.
• In this context, UNSICAR proposes that the authorities limit the level of distribution commissions associated with RCA contracts to the level specified in the distribution contracts in force between insurers and distributors on 28/02/2023, within 6 months from the date of entry. entry into force of the future normative act. Thus, the financial burden and risk of the measures taken will fall equally on insurers and intermediaries,” the Union’s press release states.

A decision to freeze RCA prices for 6 months at 28 February 2023 will be taken by the Government on Wednesday to calm the situation in the midst of the Euroins bankruptcy, but the solution concocted by the ASF has many flaws and some driving forces. will pay more for car insurance, according to data from brokers consulted by HotNews.ro.

• Read more: How much will we pay in RCA in the next 6 months: 8 cases that show the “poisoned apple” from the price freeze on February 28, 2023

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