Thousands of public contracts have guarantee insurance issued by bankrupt insurer Euroins that expires automatically on February 5, 2024, and to avoid the risk of these contracts being blocked, the Government on Thursday passed an emergency regulation allowing companies to set up new good performance guarantees. CITR, the judicial liquidator of Euroins, told HotNews.ro that more than 2,100 public contracts are at stake.

On Thursday, the government adopted an emergency decree establishing the necessary measures to allow business entities to obtain new guarantee instruments useful for the continuation of public procurement contracts to which they are parties.

• SEE PROJECT OUG AND KEY NOTE

The urgency is motivated by the consequences of the expiration of the warranty insurance issued by Euroins

• “In conditions where guarantee insurance contracts concluded with an insolvent company are terminated by law in a very short period of time, namely on February 5, 2024, it is necessary to urgently adopt a normative act with the force of law to regulate exclusively for works/services/contracts for delivery performed on the current date, the establishment of new guarantees of due performance by any of the methods provided for by law, including by successive deductions from the amounts payable on partial accounts, without the need for verification, provided that such a possibility was provided for on levels of award documentation, as well as by combining two or more methods of establishing a guarantee of good performance provided by law,” the explanatory note says.

The government warns that slow adoption of this extraordinary resolution will have negative consequences for a significant number of beneficiaries of European funds.

• “Also, the risk of non-use of European funds may be aggravated by exceptional circumstances appearing on the insurance market, caused by the inevitable bankruptcy of some insurers with a high market share in the insurance segment, which have insurance policies in their portfolio. /guarantees related to public procurement contracts and industry contracts. (…)
• This situation can become even more serious in conditions when other insurers will not be determined to take over the specified portfolio, there is a risk of blocking all existing contracts,” the explanatory note reads.

Alina Popa, CITR: 2,188 government contracts are currently guaranteed by guarantee insurance from Euroins

Representatives of CITR, the judicial liquidator of Euroins, informed HotNews.ro at the request of the situation with the public contracts guaranteed by the insurance issued by this bankrupt insurer.

• “Today, 01/25/2024, there are still 2,432 guarantee insurance policies in force, of which 244 are insurance policies for participation in the auction, the remaining 2,188 are guarantees of due performance, service and early return.
• 2188 public contracts are currently covered by guarantee insurance issued by Euroins. The value of these contracts is not available in the database,” Alina Popa, coordinator of the CITR group managing the bankruptcy of Euroins, told HotNews.ro.

The Policyholders’ Guarantee Fund (FGA) warned on Tuesday those with guarantee policies issued by bankrupt insurer Euroins that there are 3,145 such contracts which will end under the law on 5 February. Such policies are usually required by central and local government authorities (ministries, city halls, etc.) of companies participating in tenders as a guarantee that they will perform the contracted work, otherwise the insurer will pay compensation.

• Read more: Attention to government contracts guaranteed by Euroins insurance: more than 3,100 such policies will expire on February 5, 2024.