In a press release dated 14 October 2015, the Romanian Financial Supervisory Authority (“FSA”) indicated that the FSA Board has decided to open the plan-based financial recovery proceedings against EUROINS Romania Asigurare-Reasigurare SA (“EUROINS SA”). The main goal of the proceedings is to restore EUROINS SA’s financial situation within one year.
FSA’s decision is based on the: (i) findings of the FSA controlling report which revealed several regulatory non-compliances regarding solvency and capital requirements; and (ii) additional minimum capital requirements under the Solvency II rules. As such, the analysis of EUROINS SA’s financial statements, as of 30 June 2015, indicated that the contribution of an additional RON 200 million to the share capital - as assumed by the shareholders - was insufficient.
Within 20 days from receipt of the FSA decision, EUROINS SA board of directors has the obligation to file its recovery plan with the FSA. The plan must address aspects such as: (i) the estimate of the financial resources to be used to increase the solvency margin; (ii) reinsurance; and (iii) a debts settlement schedule. As part of the recovery proceedings, EUROINS SA must also file monthly with the FSA the status of the progress of implementing the assumed recovery plan.
EUROINS SA will continue to pursue its activity, including underwriting new risks and claims settlement. All policies issued before the decision of the FSA remain valid and produce full effects.
It is expected that further details will be available in the near future/coming weeks.