​Romanians insured by RCA in Euroins were in no hurry to cancel their car policies, which, according to the law, are valid despite the withdrawal of the operating license and the declaration of insolvency of this insurer. The reasons are the higher price they would pay for the new RCA insurance and the fact that they would have to wait to get their money back from the FGA if they canceled the policy.

On the day ASF declared insolvency, Euroins had over 2.76 million RCA policies in force

On 17 March 2023, the day the Financial Supervisory Authority (ASF) declared Euroins insolvent and removed the insurer’s management by appointing the FGA as interim administrator, there were 2,769,770 RCA policies in force with the company.

According to ASF’s analysis, Euroins was the RCA leader and in many cases had the lowest prices on the insurance market, without complying with the legal obligations to have the technical reserves and financial resources necessary to pay the obligations assumed under the insurance contracts.

From 17 March 2023, when the ASF decision was published in the Official Gazette, all affected parties, as well as Romanians with RCA policies in Euroins, can submit claims for either damages or a refund of the remaining premium in case anyone wants to cancel their RCA policy with this insurer.

All these requests are submitted to the Insurers’ Guarantee Fund (FGA), but payments cannot be made earlier than 60 days from the date of publication of the ASF decision in the Official Gazette, a deadline which is May 17, 2023

This means that people will still have to wait. Also they will need to take out RCA new car insurance and prices have gone up significantly since last year so the government has put a 6 month limit.

More than 2.4 million cars are currently under RCA insurance at Euroins

How many Romanians have decided to terminate their RCA insurance in Euroins?

• “According to the data provided by the insurer, by April 27, 2023, Euroins received 19,794 termination requests insurance contracts,” according to data sent to HotNews.ro FGA.

Under the law, the FGA will only be able to reimburse them the difference in premium remaining on the contract for the period during which the risk was not covered by Euroins as a result of the termination of the contract from 17 May. , 2023. Applications are considered in the order of receipt and registration.

How many RCA policies issued by Euroins are currently in force?

• “According to data provided by the insurer, there were 2,409,669 RCA policies still in force as of April 28, 2023,” This was reported to HotNews.ro on Friday by FGA representatives.

Effects on the market: There are services that no longer accept cars for repairs under Euroins insurance

The bankruptcy that started at Euroins has already affected Romanians who will have the misfortune of being hit on the road by one of the 2.4 million insured with the former RCA leader. Several services that have contracts with this insurance company, contacted by HotNews.ro last month, have started to refuse such repairs, fearing that it will be even more difficult to get their money back than before. However, there are also services that continue to work under Euroins policies.

• It says: “Hello? I’m damaged Euroins!’ – “It’s bad! We don’t work with them anymore” / Consequences of Euroins bankruptcy for services in Bucharest and what you need to do to repair your car

How much money is left in the FGA coffers to pay compensation to bankrupt insurers

However, the FGA is not only dealing with the bankruptcy of Euroins, which has to pay large compensations for the other high-profile and recent bankruptcies of RCA – City Insurance, Carpatica and Astra, the former heads of RCA, which collapsed under the lax supervision of the ASF, creating crises and rising prices.

On Friday, April 28, the FGA announced that it has so far paid out more than 1.86 billion lei to victims of the bankrupt RCA insurers, of which almost 190 million lei in the first three months of this year alone.

• How much money is left in the FGA accounts and how quickly is it being replenished through contributions from other RCA insurers and indirectly through our money?

“As of April 26, 2023, the balance of the FGA amounted to about 167.53 million lei. The average monthly contribution collected by the FGA for the first three months of the current year is 46.5 million lei,” the FGA notes.

Is there a risk that the FGA coffers will be empty?

To this question, FGA officials state that “current law allows for sufficient solutions to cover available funds necessary to continue payment of registered payment requests.”

In accordance with the legislation, the Fund can replenish its liquidity needs at the expense of the following resources:

• policyholders’ contributions to the Fund;
• penalties and penalties for late payment of premiums by policyholders;
• sums from the fruiting of Fund funds;
• sums from the collection of claims of the Fund;
• amounts received from legal interest related to loans granted to the Rehabilitation Fund for insurers administered by the Fund;
• amounts from other sources established in accordance with the law;
• loans from credit institutions or mandatory loans by issuing the Fund’s securities;
• interest or taxes in connection with any loans or guarantees provided to the insurer, in accordance with the resolution, in accordance with the provisions of Art. 59 liters b) from Law No. 246/2015.

The FGA says it “collects the premiums owed by insurers every month, so the balance changes every month. At the same time, in order to cover the obligations of the FZU, the Financial Supervision Authority may increase the percentage that is taken into account when determining the contribution during the year.