​On Thursday, the government will discuss the first reading of a draft decision that proposes to extend the RCA price cap until December 31, 2023. The measure, proposed by the Financial Conduct Authority (ASF), led by Nick Mark, aims to address the potential negative impact of rising prices.

The move is motivated by fears of higher RCA prices

The reasons for such a proposal are also indicated in the accompanying note of the draft government decision:

• “The normative act proposes to extend until December 31, 2023 the validity period of the provisions established by Government Resolution No. 2017. 298/2023 regarding the establishment of maximum rates of insurance premiums and other applicable measures by insurance companies that practice compulsory civil liability insurance of vehicle owners for damages caused to third parties as a result of traffic accidents of vehicles and trams.
• The regulatory act ensures the possibility of compliance with legal obligations arising from the conclusion of RCA contracts, on the basis of which compensations are provided to third parties as a result of such accidents.
• The application of this measure eliminates the potential negative impact of rising prices, a crisis situation caused by a large imbalance between supply and demand, and obvious market dysfunction, as provided for in Article 4. (3) from the Law on Competition No. 21/1996, reissued.”, it is shown in the document.

ASF initially considered capping RCA prices until January 10, 2024

The ASF initially wanted to propose to the government to extend the RCA price cap for another 3 months, until January 10, 2024, citing the reason that all policies of RCA Euroins, the bankrupt insurer, are expiring, as they announced last month in a premiere for HotNews.ro several sources both from the government and from the insurance industry.

We remind you that in the context of the bankruptcy of Euroins, the Ciucă government decided to limit RCA prices to the level of basic prices (B0) practiced by insurers on February 28, 2023, to which the reduction or increase in price related to the bonus-malus class is applied according to the location of each insured.

Prices have been frozen from April 11, 2023 for 6 months ending on October 10, 2023.

The government also extended the term of RCA Euroins policies

At the end of last month, the government decided to extend the validity period of RCA insurances issued by Euroins for another 3 months, until December 8 (inclusive), given that almost 1.7 million drivers still had RCA cars insured with this insurer, which became bankrupt.

How hard is it for drivers who condemn Euroins RCA policy to get their money

​One of the reasons drivers have been slow to report RCA policies to Euroins is that it takes a long time to pay back the difference in premiums for the period not covered, and figures from the Insurance Fund (FGA) bear this out. So far, the FGA has paid out less than 15% of Euroins policyholder claims.

In addition, before canceling the policy, Euroins would have had to take out new RCA insurance with another insurer, and the price would certainly have been higher, given the low and financially unsustainable rates charged by Euroins prior to bankruptcy.

In addition, tens of thousands of drivers who insured their RCA cars with City Insurance, an insurance company that went bankrupt last year, have been waiting more than a year for the Fund for Policyholders’ Guarantee (FGA) to pay them the difference in money, according to official data obtained by HotNews.ro , the period left uncovered after they canceled their RCA insurance before it expired.

• Read more: Why Romanians do not cancel RCA insurance from Euroins? City Insurance bankruptcy indicates that you have been waiting for money for more than 1 year