After insurers, even brokers, will no longer temporarily pay the contribution they owe to the ASF from the commissions they collected from the sale of RCA policies for a period of 6 months, according to the body’s draft. RCA insurers have already been exempted between May 1 and October 31 from paying a contribution from RCA premiums to the ASF, a contribution that can be found in the final RCA prices paid by drivers.
The AFS Council decided on Wednesday to promote the draft resolution on the temporary non-application of the quota for income from distribution activities related to car civil liability insurance, the draft of which will be submitted for public discussion within 10 days.
According to HotNews.ro sources, the ASF wants to temporarily suspend the collection of 0.1% of the commission income contribution applied by brokers and insurers to the distribution/sale of RCA policies. The measure will be applied temporarily for 6 months, from May 1 to October 31.
The provision specifically targets brokers, as more than 90% of RCA insurance sales are made by them, with the remainder being direct sales to physical or online policyholders.
Even insurers are temporarily not paying ASF fees for monitoring the RCA market
The leadership of the State Financial Supervision Authority (SFSA) previously decided to suspend the payment of the contribution that RKA insurers owe to the institution for RKA’s market surveillance activities.
In particular, insurers were temporarily exempted from paying a contribution in the amount of 1% of the volume of gross premiums collected from RCA’s insurance activities for RCA insurance contracts concluded from May 1, 2023 to October 31, 2023.
ASF crackdown comes after 2 major bankruptcies in 2 years: Government curbs prices but wants to change law
The ASF measures were introduced after the company suffered two major bankruptcies in 2 years and apologized in parliament for either City Insurance or Euroins concealing claims or failing to provide timely financial data to calculate its solvency and reinsured risks.
It will be recalled that in order to stabilize the RCA market after the beginning of the bankruptcy of Euroins, on April 5, the Government approved the limitation of RCA prices for 6 months at the level of the end of February 2023.
However, Prime Minister Nicolae Chuke set a condition: during this period, the ASF and the Competition Council must prepare the necessary amendments to the RCA law to avoid other crises and bankruptcies in the future.
ASF Vice-President Christian Rosu said at a government meeting that a new form of RCA law will likely be presented at the end of April, beginning of May.
- Read more: RCA prices to be capped for 6 months at end-February 2023 level / What condition does PM Chuke demand
Source: Hot News
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.