With reference to the decision of the Romanian financial regulator ASF to seize the Euroins Romania (part of Eurohold Bulgaria’s insurance Euroins Insurance Group) by revoking the operating license and the opening of bankruptcy proceedings and the appointment of the Insured Guarantee Fund (FGA) as interim administrator of the company, we consider this as a hostile takeover of the assets of the Romanian subsidiary, therefore the management of the holding informs the following:
In a new proof of irresponsibility, ASF, the institution that was not able to stop three bankruptcies in the insurance industry, failed this time to understand a reinsurance contract, throwing the RCA insurance market into a real disaster: Romanians will pay RCA at indecent prices to finance the incompetence of the authorities and the systematic robbery practiced by COTAR.
This decision confirms the intention to manipulate the insurance market and the premeditated nature of the supervisory institution’s actions, after approving in the last two months the participation of a prestigious bank such as the EBRD as a shareholder of Euroins and at the same time approving the capital subscription that demonstrates the solvency and stability financial position of Euroins, actions not found in the synthesis that is the basis of the ASF decision, which came before the Report requested by the EBRD and before the results of the EIOPA analysis.
The management of Eurohold will start the procedure to challenge the decision for the bankruptcy proceedings.
Eurohold’s and EIG Re’s management considers this measure abusive, absolutely irresponsible, especially in the current situation of the Romanian insurance market, and in contradiction with the good European practices.
The decision of the ASF board ignores the reinsurance contract of Euroins Romania with EIG Re, the group’s reinsurance unit, and does not consider the financial statement of the reinsurer talks itself. Furthermore, ASF’s board has adopted a decision that does not take into account the position of the Bulgarian financial regulator (FSC) that is the leading supervisory body in the case of EIG Re. This directly breaches the European legislation and could drive heavy consequences and measures on international level. In addition to this, the decision of ASF’s board does not consider the ongoing audit of EIOPA and the EBRD in Euroins Romania, after the Romanian unit signaled both institutions about the abusive actions of employees of ASF’s insurance department done previously.
The abusive decision of ASF board has provoked the activation of the Art. 26 in the reinsurance agreement signed by Euroins Romania and EIG Re, which provisions that in case of abusive actions and threats against the company from third parties, including abusive suspension or revocation of its license by the regulator, EIG Re has the right to withdraw from the contract with Euroins Romania and keep all written volume premium of the Romanian unit without any obligation towards the claims and risk related to the Romanian unit. Thus, ASF has provoked the termination of the reinsurance contract of Euroins Romania with EIG Re.
As a result of potential abusive measures, the ASF board bears the full responsibility for all the negative consequences, including paying damages.
Eurohold’s management has already warned several times that there had been an organized attack against Euroins Romania and attempts for a hostile takeover of its assets backed by employees of the insurance supervisory authority in the local financial regulator. Unfortunately, the unfolding events proved this scenario and confirmed the bad intentions of this organized group. Even more unfortunately, their actions seemed to have mislead ASF board, no matter how negatively it would impact the whole Romanian insurance market and the losses that would be assigned to the Romanian citizens and consumers.
Eurohold’s management finds all these steps of the regulator totally irresponsible taking into account the exploding prices of the MTPL insurance policies, triggered by the actions of the same people in the insurance department of ASF that had attacked Euroins Romania, and considering the risk for destabilization of the whole Romanian insurance market.
Moreover, capping RCA premiums’ value will place Romania in the position of infringement from the European Union and will inevitable lead to huge increases in RCA prices, to the detriment of all the population.