On Thursday, the Ministry of Justice gave a thumbs-up to the GD’s draft price freeze on RCA, but with many caveats about the underlying risks of illegality, warning that an MAE opinion is needed as there is a risk of triggering infringement proceedings. Government sources told HotNews.ro that “MAE did not approve the project because it is not necessary.”

A draft government decree to set maximum RCA rates is likely to be approved by the Chuke government on Friday to calm the waters in the bankruptcy scandal of Euroins, an insurance company in which nearly 2.8 million Romanians have RCA policies.

Although the measures proposed by the ASF are seen as a nightmare by insurers, brokers and some MPs, the project received a favorable opinion with comments from the Competition Council, and on Friday the Economic and Social Council (CES) gave a negative opinion. , stating that the CES conclusion is only advisory.

• HotNews.ro reached out to the Justice Ministry on Fridaywhich, although favorable, warns in 16 points about legality risks, as well as weak justification through analyzes and statistical data of the proposed measures.

Ministry of Justice: the opinion of the Ministry of Foreign Affairs is necessary because there is a risk of violation / the Ministry of Foreign Affairs claims that the opinion is not necessary

The Ministry of Justice, led by Catalin Preda (PNL), warns in an opinion sent on Thursday, March 23, that the draft Government Decree provides for many deviations from the legislation on primary insurance and EU legislation, so the opinion of the Ministry of Foreign Affairs (MAE) will be needed.

• “5. Given that this project establishes a number of derogations from the provisions of Law No. 132/2017 regarding the cost/time limits of the insurer’s liability, as well as the fact that Law No. 132/2017 transposes the provisions of Directive 2009/103/EC of the European Parliament and of the Council of On September 16, 2009, it is necessary to receive the opinion of the MAE.
• We also note that to the extent that the proposed internal rules are not compatible with the relevant European framework, there is a risk of launching an infringement procedure.” warns the Ministry of Justice.

On the other hand, the Ministry of Foreign Affairs, led by Bohdan Aurescu (PNL), “has not approved the project on the grounds that approval is not necessary,” government sources told HotNews.ro on Friday.

In fact, during the CES meeting on Friday, Alin Chitou, Secretary of State for the Ministry of Finance, said: “We received the findings from the Competition Council and the Ministry of Justice, who asked us to consult with the Ministry of Economy, the Ministry of Enterprise, respectively the IEA. In the meantime, I have received from the Ministry of Economy and MACE (presumably for entrepreneurship no), I understand that points of view have been sent, according to which they do not consider this to be within their sphere of competence.

It is unclear whether the MAE’s conclusion.

The judicial authorities are questioning the reduction of the tariffs of the RKA

Point 7 of the comments contained in the conclusion of the Ministry of Justice is very important, in which the legality of the GD’s adoption of some measures aimed not at restrictions, but at the reduction of RCA tariffs to the level of March 2022 is questioned.

• “7. In accordance with Article 4 paragraph (3) of Law No. 21/1996, the provisions that are the basis for the adoption of this decision of the Government “For certain economic sectors and under exceptional circumstances, such as: crisis situations, a large imbalance between demand and supply and the apparent dysfunction of the market, the Government can order temporary measures to combat excessive price increases or even block them.
• Or, taking into account that this project orders the cost of policies to be reduced to the level of March 2022, in the absence of additional logical and economic arguments, it can be assumed that the regulation does not fall under the specified basis, violating the principle of the hierarchy of regulatory acts, enshrined in the content of Article 4 of Law No. 24/ 2000.”, the Ministry of Justice mentions.

Neither the 8% ceiling of the distribution commission, nor the cost limit for replacing a damaged car, is fulfilled by the State Department

The Justice Department also warns of legal risks associated with two other major changes proposed by the GD draft: capping the distribution fee at 8% and capping the cost of temporarily replacing a damaged vehicle by referring to the average rental rate published by the Office Auto Insurers ( consisting of RCA insurers).

• “11. We consider it necessary to carry out a new analysis of art. 1 paragraph (6) given that the level of distribution commissions provided by RCA insurers represents an aspect related to the commercial policy of the economic operator without a direct impact on the cost of the policies.
• Thus, apart from the fact that the regulation goes beyond the specified basis, it could only be adopted through a normative act at the level of law.
• In this sense, we note that in accordance with the provisions of Art. 45 of the Constitution “A person’s free access to economic activity, free initiative and their implementation under the terms of the law are guaranteed.”
• The caveat is also valid for Art. 3, it is necessary to eliminate the norm.
• If the rules are followed, there is a risk that they will be declared illegal during a possible control by a competent court, which will lead to the establishment of payment obligations for the state budget and affect the relevant areas of activity.” – says the message of the Ministry of Justice.

Denial of compensation if you have not made the repairs within 30 days will affect your constitutional right to property

Another major issue reported by the Justice Department concerns a provision that allows insurers to deny coverage if repairs are not completed within 30 days:

• “13. The provisions of Article 3 paragraph (3) lack of clarity and predictability. In addition to the fact that from the use of the phrase “depending on the circumstances”, the specific situations in which each hypothesis applies, we also cannot clearly distinguish the purpose of the rule .
• To the extent that, by applying the rule, compensation would be denied after the expiration of 30 days, if within that period the repairs had not been completed and no document had been issued by the service to prove this, the measure would be of a nature affecting ownership beneficiary of services.
• Thus, there may be objective situations (for example, a high load of service activities) when repairs cannot be carried out within a certain period, especially when the beneficiary chooses a certain service.
• The clause regarding damage to the beneficiary’s property right is also valid for the decision from Art. 3 paragraph (5), which practically imposes a mandatory deductible of 75% of the market value of the damaged car (minus the weight of the wreckage). it is stated in the conclusion of the Ministry of Justice.

The Ministry of Justice refers to problematic provisions of the DG

Below are the problematic provisions of the PD project:

Article 1, par. (6): Distribution commissions related to RCA contracts are limited to a maximum of 8% of the gross premium collected within 6 months from the effective date of this decision.

Article 3.

• (1) When applying the provisions of this decision to compensations provided by RCA insurers, based on contracts provided for in Art. 1 paragraph (5), to cover the costs of temporarily replacing the damaged vehicle with a vehicle of the same class or a lower class, the calculation of compensation takes into account a rate that cannot exceed the average rental rate published by the Bureau of Vehicle Insurance in Romania.
• (2) Compensation provided for in para. (1) is provided only in a situation where the damaged vehicle can no longer be used from a technical point of view.
• (3) The maximum period during which the compensation provided for in para. (1) and (2) is 30 days from the date of issue of the Repair Permit by the Police or the Entry into Repair Document issued by the RCA Insurer, as the case may be.
• (4) As an exception to the provisions of par. (3), the maximum period may be extended only with the prior consent of the RCA insurer.
• (5) In the case of vehicles that are no longer repairable and subject to total economic damage, the compensation provided for in par. (1) and (2) cover the period between the date of discovery of the loss and the date of submission of the offer of compensation; at the same time, the amount of compensation cannot exceed 25% of the market value of the damaged vehicle.

HERE IS HG’S DRAFT ON RCA MAXIMUM BETTING