​Citizens and creditors of City Insurance, the former bankrupt leader of RCA, have collected approximately 603 million lei (more than 123 million euros) by the end of last year, but this amount covers only a quarter of the total number of claims, the Fund for the Guarantee of Insurers (FGA) announced on Wednesday ).

What payments did the FGA make last year to applicants City Insurance, Astra and Carpatica

Last year, the Insurers’ Guarantee Fund (FGA) approved 68,791 payment requests for all insolvent insurance companies under the Special Commission.

The total amount of payments made in 2022 is 665.6 million lei. Of the total number of inquiries analyzed in 2022, 60,686 inquiries concern insurance creditors of the City Insurance Insurance and Reinsurance Company with a paid value of 583.2 million lei.

In addition, out of the total payments made during the past year, 47.8 million lei were paid to the insurance creditors of the insurance and reinsurance company Astra, and 30.6 million lei were paid to the insurance creditors of the Carpatica Asig company.

Thus, payments in the case of two bankrupt insurance companies reached 554.8 million lei in the case of the Astra insurance and reinsurance company, respectively 498 million lei for the Carpatica Asig company.

City Insurance: 603 million lei, only 64,568 payment requests paid

Starting from November 29, 2021 and until the end of 2022, FGA paid the insurance creditors of City Insurance SA approx. 603 million lei for 64,568 payment requests approved by the FGA Special Commission out of a total of 250,692 registered payment requests.

We will remind you that in September 2021, the ASF revoked the permission to operate at City Insurance, and in May 2022, the court finally decided the bankruptcy case of this insurer.

In the first phase, the FGA registered 260,764 payment requests, but as a result of the internal review process, 10,072 payment requests were closed as duplicates or added to other previously registered payment requests.

Why RCA prices could go up: Insurers forced to pay more to FGA

In order to manage the bankruptcy of City Insurance, as well as the other major bankruptcies of Astra and Carpatica, the Financial Supervisory Authority (ASF) decided to increase the fees that insurance companies pay to the FGA for managing insurance bankruptcies.

• “The year 2022 was marked by an increase in the general insurance contribution rate collected by the FGA from insurance companies from 1% to 2.5%, resulting in the collection of an average monthly contribution of 24.8 million lei.
• The current year brought a new increase in the premium rate for general insurance from 2.5% to 4%, which leads to an average monthly increase in revenue to a projected level of 46 million lei.” highlights the Insurance Guarantee Fund (FGA) on Wednesday.

These successive increases in premiums paid to the FGA by insurers could lead to further increases in RCA prices this year.

Svoboda: City Insurance would falsify contracts and liquidity accounts and transfer money outside the country, until bankruptcy / No one answers in ASF

Libertatea writes on Tuesday that it has read a document sent to the Romanian state by the Financial Conduct Authority in Great Britain, the UK’s financial watchdog, which would show how Romanian executives of City and their foreign partners took money paid for policies by people and companies , which they did not further guarantee and reinsure in accordance with the law.

They would falsify financial solvency contracts as well as liquidity accounts and transfer money out of the country where they would misappropriate large sums, ultimately failing to pay policyholders.

On Wednesday, Libertatea published a new article showing how Niko Marku, the man appointed by the PSD to lead the ASF, under whose tenure City Insurance went bankrupt, allegedly reshuffled the organization chart last year and made a director under his “supervision” in charge of three bankrupt companies ( Astra, Karpatyka and City Insurance).

• “In the spring of 2021, when ASF became aware of the insolvency of City Insurance, the third-ranking market leader, the director of supervision and control of the institution, Florin Holovatych, was demoted to the position of financial analyst. .
• In late 2022, as the City disaster began to be forgotten, ASF President Niku Marku introduced a new position into the institution’s organizational chart: the position of Head of Service in the Insurance Authorization and Approval Service. Florin Holovatych was promoted to the head of the service,” writes Libertatea.

HotNews.ro has asked both Florin Holovatych and ASF management for their perspective on this information, and we’ll be back with answers as soon as we get them.

The leadership of the ASF was heard in September 2021 without the presence of the media in the relevant committees of the Verkhovna Rada in connection with the bankruptcy of “City Insurance”. At the end of the hearing, Valentin Ionescu, director general of the ASF, said that authorities had carried out intensive investigations into City Insurance last year, thus revealing that the account declared in Switzerland, which contributes to the solvency of the company, did not exist.

• “Last year, we conducted very intensive investigations, thorough checks with the European authorities EIOPA and the Swiss Federal Authority. Also thorough checks with tax havens with the authorities of Cayman, Barbados and the island of Nevis.
  
• While the authorities in Europe have been more prompt in their responses, the authorities in these tax havens have responded very harshly or not at all.
• Why am I highlighting this collaboration? Because In Switzerland, this company said it had a certain amount of money that contributed to its solvency, and in reinsurance it ceded 90% of the gross written premiums, they were reinsurance in these tax havens. These two elements helped the company remain solvent.
• There is nothing legally wrong with keeping money in a bank in Europe or reinsurance outside of Europe, it depends on how you get that insurance and it depends on whether the money exists.
• We found that the reinsurance was also poorly done so that the risks were not really transferred. There is a whole discussion here. Also, with the help of the Swiss authorities, I discovered that the account declared in Switzerland through documents apostilled, translated and legalized by this company, I don’t know how they did it, I discovered that this account does not exist.” Valentin Ionescu said in September 2021.

Mišu Negrica, who was fired from the ASF leadership in May 2017 following the NN Pensii scandal and the 2016 RCA crisis (Astra and Carpatica bankruptcies), said in a statement to HotNews.ro in September 2021 that the current situation at City Insurance “looks like a 5-year closed bankruptcy”.

He said he introduced a City recovery plan and special administration in 2016, but after his departure, the ASF decided to take City out of recovery based on worthless paper (account statements) that turned out to be fake.