The Financial Supervision Authority withdrew the authorization of the Euroins insurance company, the institution announced in a press release.
Initially, in the ASF Council, it was proposed to suspend the management of Euroins and take over the management by the Insured Fund (FGA), as reported last night by Profit.ro, but after 2 days of debates, the ASF management decided on Thursday evening, at 18:30 to withdraw the company’s authorization and ask for bankruptcy.
According to a ASF press release. on 30.06.2022, the company does not have eligible funds for SCR coverage, a situation that is maintained as of 30.09.2022. To restore the solvency capital requirement (SCR), funds in the amount of 2.19 billion lei are needed, and to cover the MCR, funds in the amount of 1.75 billion lei. The decision to withdraw the authorization was taken under the conditions in which the situation of Euroins Romania does not make it reliable to apply a resolution procedure.
“The decision of the ASF Council is based on an extensive analysis of the Euroins Romania situation. In this sense, we mention the fact that, starting in 2020, Euroins was the subject of intense control actions that resulted in highlighting the real situation of the company. Between February 2020 and January 2023, the Authority applied 26 sanctions to Euroins, resulting in total fines of over 16 million lei, resulting from 17 control actions. All the sanctions applied by the ASF to the Euroins Romania company were confirmed, on the merits or definitively, by the courts to which the company addressed in contesting the measures,” says the press release.
Daniel Apostol, the ASF spokesperson told Digi24 on Friday, after the Authority’s decision to withdraw the operating authorization of Euroins as a result of insolvency, that the Insured Guarantee Fund will pay all the rights of the insurance policies from this Company.
On Friday, the government announced in a press release, after the ASF announcement regarding the withdrawal of Euroins’ operating authorization, that “it will support all the necessary measures to protect the interests of the insured affected by developments on the RCA market”.
“The Romanian government will support all the necessary measures to protect the interests of the insured affected by developments on the Auto Civil Liability market. Following the analysis carried out by the Financial Supervision Authority, as the responsible institution, it will forward the solution proposals to the Ministry of Finance, for submission to the Government,” the Executive’s press release states.
The information that the ASF will directly withdraw its authorization and demand the insolvency of Euroins was premiered on Thursday evening by Libertatea.
The Insured Guarantee Fund (FGA) does not have enough resources to manage the situation at Euroins, given that it is already paying for the bankruptcies of Astra, Carpatica and City Insurance.
If the court decides the insolvency of Euroins, the RCA policies will automatically terminate in 3 months, but in the meantime they could produce damages.
HotNews.ro sources said that in order to solve the situation, the Government would lend FGA and cap RCA prices, a measure already taken into account by the ASF, which is being worked on seriously, according to some government sources. The problem is that capping RCA prices would mean that many drivers would pay more than they currently do, and such a measure could attract infringement proceedings from the European Commission, as has happened before.
Approximately 2.8 million Romanians who have RCA car insurance valid at Euroins, according to data registered at the end of January 2023.
Euroins CEO: We are surprised by ASF’s decision. We identify all legal means to challenge it
The CEO of Euroins, Tanja Blatnik, said on Friday that he is surprised by the decision of the Financial Supervisory Authority to lift the operating authorization of the insurer. According to her, ASF ignores two ongoing independent audits by the EBRD and the European Regulatory Authority EIOPA, which is why “we are identifying all legal means in Romania and in other jurisdictions to challenge this decision”.
“Euroins Romania is surprised by the decision of the Financial Supervisory Authority, which affects millions of Romanians. The surprise comes from the fact that the ASF ignores two ongoing independent audits by the EBRD and the European Regulatory Authority EIOPA. These audits will end at the end of March, but the ASF decided to ignore them, even though it was informed in detail. At this moment, we are identifying all the legal means in Romania and in other jurisdictions, to challenge this decision and, implicitly, to defend the financial interests of our clients and ensure the financial stability of the market”, says Tanja Blatnik, CEO of Euroins.
According to the cited source, the Financial Supervision Authority “did not even respond officially to our report, in which we reported all the violations of Romanian and European legislation, which its audit team committed, in the report issued on February 2”.