The Council of the Financial Supervisory Authority (ASF) decided to withdraw the operating authorization of the Euroins Romania company, noting the signs of the company’s state of insolvency, the ASF announced on Friday. The Council also decided to promote by ASF a request for the opening of the bankruptcy procedure and the appointment of the Insurance Guarantee Fund (FGA) as interim administrator of the company. Between February 2020 and January 2023, ASF fined Euroins over 16 million lei in total, sanctions resulting from 17 control actions.
“The Council of the Financial Supervisory Authority (ASF) decided to withdraw the operating authorization of Euroins Romania, noting the signs of the company’s state of insolvency. The Council also decided to promote by the ASF a request for the opening of the bankruptcy procedure and the appointment of the Insurance Guarantee Fund (FGA) as interim administrator of the company, with the task of ensuring the administration and management of the insurer’s activity and the adoption of the necessary measures for the preservation of the patrimony. The duties of the company’s management are suspended by law. The mandate of the FGA ends upon the appointment of the judicial liquidator”, says the ASF.
As of 06/30/2022, the company does not have eligible funds for SCR coverage, a situation that is maintained as of 09/30/2022. 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”, states ASF.
The decision of the ASF Council is based on an extensive analysis of the Euroins Romania situation, say ASF representatives.
“In this sense, we mention the fact that, starting in 2020, Euroins was the object 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 ASF.
For complete documentation regarding the results of the supervision and control process, ASF provides a Summary of the decisions taken by the Financial Supervisory Authority Council in relation to Euroins Romania.
The history of control actions, as well as the details of the irregularities identified at Euroins Romania can also be consulted on the ASF website. The reasons why ASF decided not to approve the transfer of assets to the company EIG Re, registered in Bulgaria, are mentioned in the same place.
Eurohold Bulgaria AD, the parent company of Euroins Romania, specifies that it will start the process of contesting the decision regarding the bankruptcy procedure and considers the ASF’s measure to be abusive and absolutely irresponsible. Eurohold accuses an organized attack against Euroins and specifies that ASF, “the institution that failed to stop three bankruptcies in the insurance industry, this time failed to understand a reinsurance contract”.