The National Union of Insurance and Reinsurance Companies in Romania (UNSAR) considers that the capping of the compulsory insurance policies (RCA) tariffs violates the principle of free market competition, provided by the Constitution, but also a number of European regulations, so it has notified the European Commission on these issues.
The government approved on Wednesday the decision on capping the compulsory insurance policies (RCA) rates for a six-month period. The lowest RCA policy will be RON 541 per year and the largest – RON 3,087, the maximum tariffs grid reveals.
“Following the approval by the Government of the capped tariffs for RCA, UNSAR reaffirms its intention to act in every way possible that the regulations specific to this area to observe the legal framework in force, both at national and European level. Firstly, the RCA tariffs capping violates a basic principle laid down by the Constitution, that of a free market, competition, and the UNSAR members currently analyze the best options to act against this provision. UNSAR has already notified the European Commission on the breaching of Directive 2009/138 / EC and of the European Union Treaty, with premises that Romania is penalized for infringements of Community law,” a UNSAR press release issued on Thursday reads.
According to UNSAR, the European regulations prohibit both the capping of tariffs in the absence of a general price control and the possibility to charge tariffs as support or protection for a particular industry.
Moreover, UNSAR claims that insurance companies face financial problems, given that in the past nine months, insurers in Romania have received capital infusions from foreign shareholders amounting to EUR 90 million, the businesses generating losses of RON 2.8 billion in nine years.
“Following the measures approved by the Government, the insurance companies’ losses will grow and will not be limited only to the six months envisaged for capping by the Emergency Ordinance 54/2016, but its effects will be felt over a much longer period, hard to estimate, given the specificity of the RCA,” the document reads.
Moreover, after the end of the six months in which the tariff is capped, most likely we will notice a return to sustainable rates for insurers, a situation that will create the perception of imbalances on the market, UNSAR representatives say.
UNSAR warned in September that the RCA tariffs freezing violate both European norms and the Romanian Constitution and it will adversely affect consumers.
“The insurance companies comply with the laws in force, and therefore the maximum tariffs imposed by the Emergency Ordinance will certainly be respected. We emphasize, however, that UNSAR pointed out several times on the illegality of that provision. The freezing of RCA levels for premiums violate both the European norms and Romania’s Constitution. Moreover, we believe that any intervention in capping the tariffs without taking into account the realities of the insurance market will impact in a negative way the consumers, because it will lead to a levelling: price increases for the client groups with a better attitude in traffic and lower prices for categories with high risk,” UNSAR said.
Transporters want a new law on RCA
The road transport employers welcome the Government Decision on capping the premium rates for RCA applicable to insurance companies and request the urgent publication in the Official Gazette, but also the developing a new Law on RCA insurance, to straighten “all the shortcomings of the current legislation”.
“Road transport employers – UNTRR, FORT, APTE 2002, APULUM, ARTRI – welcome the government decision on RCA for insurance companies and request its sending to the Official Gazette for publication,” a UNTRR release informs.
The transporters ask the parliament a new law on RCA to be drawn up and completed in 3 to 6 months after the expiry of the capping term, a law to consider the problems revealed during the period Emergency Ordinance 54/2016 is in force and to straighten the shortcomings of the current legislation.