Victims of a bankrupt insurer’s RCA will in the future be able to claim compensation of more than 500,000 lei per insurance contract, the maximum amount currently paid out by the Policyholders’ Guarantee Fund (FGA). Romania risks infringement proceedings if it does not quickly implement this change, which is required by the EU Directive, but this measure will only apply to future bankruptcies.

The regulatory act adopted by the Government on Wednesday transposes into national law the provisions of Directive (EU) 2021/2118, which provides protection for persons injured in road accidents who are entitled to receive compensation under RCA contracts in the event of bankruptcy or liquidation of the enterprise. insurers who have entered into contracts with respect to persons responsible for causing losses.

• SEE THE BILL AND THE EXPLANATORY STATEMENT

The changes mainly concern the following aspects:

• regulating the right of persons resident in Romania, injured as a result of transport accidents, to claim from the Fund compensation due under RCA contracts concluded by Romanian legal entity insurers and insurers authorized in the Member States, in the event of bankruptcy or liquidation, whether or not based on their incapacity;
• extension of the protection provided by the Fund, also in case of liquidation not based on insolvency;
• cancellation of the current upper amount of 500,000 lei, in the case of victims of RCA, payments to be made by the Fund within the limit of the guarantee amount, which is determined by the level of the maximum limit of liability of the insurer who concluded the RCA contract, i.e. the highest value between the limit of liability provided for by law, applicable to the place of occurrence of the accident, and what is provided for in the RCA contract;
• regulation of the obligation of the Fund to reimburse similar bodies in the states of residence of the affected persons for amounts paid to them under RCA contracts concluded by debtor insurers, Romanian legal entities in bankruptcy procedures or in liquidation procedures that are not based on insolvency.

The draft law also aims to clearly define RCA victims among insurance creditors in order to ensure clarity regarding, on the one hand, the fact that the current statutory limit of 500,000 lei is maintained only for insurance claim payments resulting from other forms of insurance , than the RCAs, and, on the other hand, the fact that, in the event of a non-bankruptcy liquidation, the Fund has an obligation to pay only to injured parties entitled to compensation under the RCAs.

At the same time, it regulates the financing mechanism of the Fund by obtaining loans from the state in exceptional situations when its available financial resources are not sufficient to cover the amount owed in accordance with the law to insurance creditors and similar bodies from other member states.

The draft law adopted by the Government on Wednesday will be sent to the Verkhovna Rada for amendments and adoption.

The injured party can claim compensation of more than 6.45 million euros in case of bodily injury, non-pecuniary damage and death

Victims of RCA City Insurance and Euroins collected more than 630 million lei from the Insurers’ Guarantee Fund (FGA), the body that pays compensation in the event of an insurer’s bankruptcy, up to 500,000 lei, up to November last year for each insurance contract. .

Then, upon HotNews.ro’s request, the FGA explained what changes the EU Directive requires to the payment of damages:

• “By means of a draft regulation transposing the European directive, the legislator abolishes the current limit of 500,000 lei in the case of insurance creditors whose losses are the result of RCA-type insurance contracts.
• According to the European regulation, which will be transposed into Romanian law, each member state must require that the minimum sum insured for which RCA insurance is mandatory, in the event of bodily injury, is a minimum of €6,450,000 per accident, regardless of number of prejudiced people.
• In case of material damages, the minimum compensation limit will be 1,300,000 euros per road accident, regardless of the number of victims.
• We clarify that the guarantee limit of 500,000 per insurance payment is canceled only for RCA insurance policies and will only apply to bankruptcy procedures opened after the entry into force of the amendments to Law No. 213/2015.
• Administrative proceedings managed by the Insurers’ Guarantee Fund for the settlement of claims for the payment of sums to insurance creditors of insurers in respect of which bankruptcy proceedings were previously opened remain subject to the legislation in force on the date of their commencement, regardless of the time of submission of payment requests (eg: City Insurance SA , Euroins SA).
• In this legislative context, in which the guarantee ceiling of 500,000 lei for insurance indemnity is applicable at the time of submission, an increase in the contributions paid by insurers to the FGA is not considered,” FGA representatives told HotNews.ro at the time.

Read more: Changes to RCA: injured parties of bankrupt insurer will be able to claim damages of more than 500,000 lei / Biggest FGA payouts this year – DOCUMENT