In an earlier article, we presented the Romanian Financial Supervisory Authority’s (the “FSA”) decision to initiate an independent third party assessment of the insurance sector in Romania.
In a press release on 18 February 2015 (the “Press Release”), the FSA announced that the process of selecting the auditors to carry out the assessment has been completed. The Press Release lists the six audit companies selected to carry out the assessment.
The assessment is intended to be representative of the Romanian market and will evaluate insurers, who in the aggregate, represent at least 80% of the market. The envisaged evaluation of the selected insurers’ balance sheets and analysis of their compliance with prudential requirements will be based on currently applicable legal provisions and stem from a Solvency II perspective. The assessment process will also include: an evaluation of the insurance portfolios of the selected insurers and a bottom-up stress test to determine the readiness of the insurance sector in Romania to implement Solvency II criteria and the insurers resilience to specific markets’ shocks. The reference date for the financial data to be used for this assessment is 30 June 2014. The FSA approved the criteria and the conditions based on which, upon the finalisation of the assessment, it will require the selected insurers to implement specific supervisory measures, including capital adequacy. The FSA has also approved the timeframe to implement the supervisory measures and the procedures for monitoring the implementation by insurers of the required measures.
We will provide a more detailed analysis once more information regarding the assessment of the insurance market in Romania is available.
If you are interested in finding out more details about the above and/or would like to discuss how the upcoming assessment may affect your business, please contact our insurance team in Bucharest.
The full text of the Press Release is available in Romanian here.