City Insurance accuses ASF management of ignoring legal provisions

City Insurance has responded Thursday to the Financial Supervisory Authority (ASF) decisions on applying the dispositions of Law no. 246/2015 on the redressing and resolution of company’s insurers.

City Insurance accuses ASF management of ignoring the laws after when on March 15, 2017, the company notified on the fulfilment of the measures set and approved by the Authority, including in terms of the implementation of a EUR 30 million funding mechanism imposed by the decisions of ASF Council as a financing requirement (this measure has already been reported as complied with during the month of December 2016).

“We mention that the notification, as well as the type of funding to which the company resorted, have been validated by an external auditor. Nevertheless, ASF management expressed reserves with respect to this solution, ignoring the legal provisions, the practice arguments and experts’ opinions in this field,” City Insurance points out in a press release.

City Insurance argues that has also informed ASF that intends to supplement the capitalization operations by two other distinct financial operations, namely: replacing the funding mechanism previously specified with a subordinate loan amounting to EUR 50 million, amount which is already deposited in the accounts of the company; increasing the share capital by attracting a new investor, already publicly agreed by the management of ASF, by a contribution in cash up to EUR 50 million.

“ASF decisions that refer to the penalization of some representatives of City Insurance- by applying fines and suspending the permit to occupy certain positions – refer to natural persons, have no direct causal link with the company business and may be contested by those concerned. We cannot help noticing the somewhat ostentatiously way of mentioning the attribute of <<brother-in-law>> of one of the persons concerned, which makes us think that they are trying to square some accounts and sacrifice the interests of an insurance company for some personal wars. How justified such a conduct is remains to be judged by the public opinion,” the insurance company states.

For non-compliance with the financial recovery plan, the Board of ASF has decided the withdrawal of the authorization of President of the Management Board and that of General Director of Dan Odobescu and his sanctioning with fine.

Just a few weeks ago, Swiss private investor Max Roessler visited Romania to complete negotiations for taking over the Insurance-Reinsurance Company City Insurance.

ASF stated that moment that will grant all its support to facilitate the transaction and will cooperate with both City Insurance and the investor, to restore, in a short time, the financial indicators of capitalization, solvency and liquidity of the insurance company.