​Insurers are again calling on the government to deliver on its promise to overhaul RCA legislation, warning that the RCA price cap demanded by some transport companies is already in place and has not addressed the underlying problems.

The National Union of Insurance and Reinsurance Companies of Romania (UNSAR) responded on Thursday to the statements of some carriers asking the authorities to limit RCA rates, highlighting the fact that these rates are already capped:

• “From April 11, 2023, RCA tariffs have already been capped at the level of February 28, 2023. Initially, the measure was adopted for 6 months, extended for another 3 months, and then at the end of last year, the Government continued with minor adjustments until March of this year. We don’t know what other industry is in a similar situation.
• Average claims paid on RCA policies in the third quarter of 2023 increased by approximately 12% compared to the same period in 2022, with claims not capped. At the same time, insurers pay increasing taxes and contributions from 6.6% for RCA in 2021 to about 13% in 2023 on the value of gross premiums collected for RCA insurance.
• In addition, insurers’ contribution to the FGA – Insured Guarantee Fund has increased from 1% in 2021 to 7% in 2023 of the value of gross premiums collected under RCA insurance, of which 5% is a credit provided by insurers. These contributions represent a significant financial burden – money that insurers collect from the cost of policies paid by all policyholders for all types of general insurance, not just RCA. When the sums borrowed by the FGA insurers will be repaid, and what their value will then be, taking into account inflation and the loss of interest, is not known,” the insurers say.

The frequency of RCA damage by vehicles is almost 3 times higher than the market average

Insurers remind that RCA tariffs are calculated based on the frequency of appeals to RCA insurance cases and the amount paid in each accident.

• “The frequency of RCA claims recorded in the case of motor vehicles for the transportation of goods is almost 3 times higher than the market average. Thus, the frequency of road accidents due to the fault of vehicles weighing more than 16 tons is 19.1% against about 6.6%, which is the average frequency of RKA damage for all types of motor vehicles.
• That is, out of every 100 such registered vehicles, at least 19 cause an accident with property damage (usually much greater than other categories of vehicles) or bodily injury and death.
• Moreover, frequency aside, the average loss recovered under RCA policies from accidents caused by these types of vehicles is significantly higher than the average loss recorded at the fleet level.
• Last but not least, a large amount of compensation is paid for accidents that occur outside of the country, some states have no limits on compensation for bodily injury or death, or even for property damage.”

Therefore, insurers say, every driver’s behavior on the road affects all RCA drivers financially, and they are calling on the government to change RCA legislation.

• “We need a deep change in the legislation on the RKA – as the Government promised last year. The current law has repeatedly demonstrated its limits, and temporary measures such as freezing RCA rates do not address the fundamental problems facing insured persons, injured persons and insurers.” says UNSAR.

Carriers are asking to cap RCA prices at 5,000 lei for B0 class

On Thursday, vehicles from transport companies from all over the country are taking part in the protest, which started on Wednesday. Meanwhile, the delegation of protesters was accepted for discussion in the Government.

The carriers are demanding the recognition of road transport as a “strategic sector of the economy and the development of measures to support this sector of the economy in order to remain competitive and continue to bring direct revenues to the state budget”, under which they argue that the transport sector is the largest exporter of services from Romania, bringing more than 5 billion euros annually into the Romanian economy, helping to reduce the foreign currency deficit.

Among other things, the carriers demand an RCA limit of 5,000 lei per B0 and the possibility to suspend the policy coverage (RCA/CMR/casco) when the truck is not in use and to automatically extend the validity period.

According to the president of the Federation of Romanian Transport Operators (FORT), Augustin Hagiu, a day ago, around 6,000 trucks took part in a transporters’ protest on Wednesday, unhappy with the RCA price change.

Carriers want to sign protocols with insurers from outside the country to sell them RCA policies at the Financial Supervision Authority (ASF) base rate, Vasile Stefanescu, president of the Confederation of Operators and Authorized Carriers of Romania (COTAR), said on Wednesday, Agerpres reported.

At the same time, he said that the employers’ organization is not involved in the transporters’ protest which blocks traffic on Wednesday on the A1, on the Bucharest ring road, as well as on the belts of major cities.

• “Regarding the RCA policy, I have seen that there is a three-month extension of the so-called ceiling, although it is not a ceiling. But we will still hold discussions with the new ASF president next week.
• Let me give you another official statement: we have found third party companies that will come in and underwrite RCA policies for us, the carriers, at an approximate rate, which is what is on the ASF website. Not like it is today. That is, at B0, a 16-ton truck pays 15,000 – 16,000 lei, and the base rate is 8,700 lei.
• We will make protocols with some foreign companies that will give us an approximate rate because it is normal for a European country. We will pay at the reference rate.” said Vasile Stefanescu.

Read more:

• The protest of carriers continues. Convoys of trucks and tractors are heading to Bucharest / Negotiations with the government will resume next week / List of demands of transporters
• Carriers want to sign protocols with insurers from outside the country for RCA policies – President of COTAR