In full control of the ASF over the company’s solvency, the leader of RCA, Euroins, announced on Friday evening that it has concluded a new contract with the group’s reinsurer – EIG Re, to which it has transferred a significant part of the risks. Euroins says that this would solve the problems raised by the ASF, but that it will continue to defend the validity of previous reinsurance contracts that are contested by the authority.
Kiril Boshov is Tanja Blatnik, EuroinsPhoto: AGERPRES
The Eurohold Group says it signed this contract to protect itself from arbitrary measures by the ASF
The Bulgarian group Eurohold claimed on Friday that it does not agree with the actions of ASF officials, but that it has decided to provide additional guarantees for the financial stability of the Euroins company in Romania.
We reproduce below the main information from the Eurohold press release:
- Euroins Romania signed a quota share reinsurance contract with EIG Re EAD, the reinsurer of Euroins Insurance Group AD (EIG).
- This is due to ongoing disputes with officials from the Romanian insurance market regulator regarding the existing reinsurance contracts of the local unit Euroins.
- The new reinsurance contract was consulted with international experts and lawyers. Eurohold and EIG Re have duly informed the competent state authorities and the Financial Supervisory Commission of Bulgaria regarding this new measure, and Euroins Romania – the relevant Romanian Authority.
- The agreement with EIG Re was concluded in accordance with all European requirements and covers the entire value of Euroins Romania’s damages.
- The new reinsurance contract also ensures the transfer of a significant part of the risk assumed by Euroins Romania outside the company.
- This decision is associated with higher costs for the company, but is widely established and supported in world practice.
- This measure solves all the problems raised by the Romanian insurance market regulator, which continues to be the subject of discussions and controversies.
- The hiring of the group’s reinsurer is another guarantee of the management’s confidence in the good financial condition of Euroins Romania and in the correctness of the company’s theses presented to the competent regulatory authorities.
- An additional guarantee for Euroins Romania and EIG Re is the fact that a significant part of the risks assumed by the new reinsurer are retroceded to top European reinsurers. Thus, the interests of the insured persons are protected to an even greater degree, and this guarantees an even greater level of stability.
- The newly adopted measures ensure an even greater coverage of the Minimum Capital Requirement (MCR) and the Solvency Capital Requirement (SCR) of Euroins Romania, the two key indicators that determine whether an insurer is sound and solvent.
- The managements of Eurohold and EIG, as well as the team of international experts consulted by the two companies, are convinced of the correctness of the previous actions of the management of Euroins Romania and have no doubt that the existing reinsurance contracts fully cover the risks assumed by the company.
- For this reason and regardless of the new quota share reinsurance contract, the efforts to defend the validity of previous reinsurance contracts contested by employees of the regulatory authority of the insurance market in Romania will continue.
- Also, the request for an independent international audit on the situation of the Euroins Romania company before and following these additional measures remains.
The management of Eurohold also expresses in the press release its “gratitude for the support provided by all the state authorities and by the Bulgarian Financial Supervisory Commission.”
Criminal complaint and ASF control, ongoing once morest the leader of RCA / Euroins, fined over 16 million lei in the period 2020-2023
The measures now announced by Euroins come under conditions in which the company is under the full control of the Financial Supervisory Authority (ASF) on solvency and liquidity indicators, information first announced by HotNews.ro, on February 6, 2023.
There is also a criminal complaint at the Prosecutor’s Office once morest the insurance company, as first reported Libertatea newspaper.
ASF sent to HotNews.ro the list of all fines applied to Euroins in the period 2020-2023, which exceed the value of 16 million lei, but also the detailed reasons for these sanctions.
If the most recent fine of over 300,000 lei applied last month concerned the late payment of compensations, the fines from November and September 2022 concern both the improper establishment of technical reserves, but also reports that would have been incomplete between February and June 2022 regarding the situation disputes pending before the courts.
With regard to the complaint made in February 2022 at the General Prosecutor’s Office, the ASF officials stated that they understand not to comment on aspects that are the subject of criminal investigations or pending cases of institutions/authorities or specialized state bodies.
The General Prosecutor’s Office confirmed for HotNews.ro that there is a criminal file opened following the ASF complaint following the control at Euroins, without giving any other details regarding its status.
Eurohold claims a coordinated attack on Euroins Romania in which ASF employees might be involved / Purpose: Seizure of the insurer’s assets
Later, on February 8, 2023the Bulgarian group Eurohold announced that it has alerted all state authorities and international institutions “regarding a coordinated attack once morest Euroins Romania, in which several high- and middle-level employees from the management of the Financial Supervisory Authority (ASF) might be involved, as well as people involved in the City Insurance crisis.
What the Eurhold group stands for:
- “The attack once morest Euroins Romania might involve several high- and medium-level employees from the management of the insurance department of the financial supervisory and regulatory authority in Romania – the Financial Supervisory Authority (ASF), as well as people involved in the City Insurance crisis.
- They carry out these actions endangering the financial stability of the company, the insurance sector as a whole and the economic stability of Romania. Moreover, the action of some officials of the ASF insurance department endangers the company’s good relations with ASF, as an institution and with its top management.
- Eurohold has already informed a number of competent state and international bodies and institutions regarding these actions, and the institutions are taking the necessary measures.
- In the information sent by the company to the competent state and international institutions, it describes all the intended actions, the actions of the group once morest Euroins Romania and the potential purpose of the campaign which might consist in the rapid seizure of the insurer’s assets, causing a liquidity crisis in the sector, with impact major.
- This financial destabilization might also affect the activity in Bulgaria and might have a negative impact on the membership of the two countries in the Schengen area, as well as on Bulgaria’s entry into the Eurozone, despite the excellent bilateral relations between the two countries.
- The attack on Euroins Romania escalated in the last two weeks, when a massive negative campaign was organized through the media, some politicians and some officials of the ASF insurance department.
- This includes actions and measures that flagrantly violate not only Bulgarian but also European law. The shareholders of the holding believe that there is an intentional campaign aimed at destabilizing the financial and insurance market in Romania, as well as the company itself as a leader in this market. Eurohold has also alerted the European Insurance and Occupational Pensions Authority (EIOPA) regarding these actions, as well as other European authorities.”, it is stated in the statement of the Bulgarian group.
The group also asks the representatives of the competent state authorities, “to ensure a transparent, impartial and internationally recognized audit of the process carried out by some members of the insurance department team of the ASF, which otherwise might lead to a liquidity crisis and financial instability and general politics.”
SEE THE EUROHOLD COMMUNICATION HERE.
