Another Romanian insurance company faces financial troubles
The Romanian Financial Supervision Authority (ASF) decided at the end of last week (May 16) to open the financial recovery procedure for Romanian insurance company Carpatica Asig, according to an announcement from the financial regulator.
This procedure is usually decided when an insurance company has financial problems which may later affect the clients which hold insurance policies. Carpatica Asig management needs to come up with a financial recovery plan in 20 days after it received the decision of the ASF. All the insurance policies which have been issued by the company to this moment remain valid until the expiration date. The company can also sign new policies, according to ASF.
Carpatica Asig was the tenth largest general insurer in Romania at the end of 2012, with a market share of 3.83 percent. Most of the company’s business came from the auto vehicle mandatory insurance (RCA) segment, where it had an 11 percent market share in 2012. The company had losses of EUR 1.6 million in 2012. Results for 2013 haven’t been released yet.
Carpatica Asig came into public attention in January 2014 when a member of the ASF board, Marian Mirzac, and Romanian businessman Ilie Carabulea, who owns the Carpatica financial group (Banca Carpatica, Carpatica Asig and Carpatica Invest brokerage firm) were arrested in a corruption case.
According to the prosecutors from the National Anticorruption Department (DNA) Carabulea allegedly bribed Mirzac, who had previously been CEO of Carpatica Asig, to ignore the conclusions of a report following a probe conducted by ASF at Carpatica Asig. The report showed financial deficiencies at the insurer which would have required the company to raise its share capital. Later on, Dan Radu Rusanu, president of the ASF, was also arrested in this case. Corneliu Moldoveanu, vice president of the ASF in charge with the insurance sector is also indicted in this case.
Carpatica Asig is not the only Romanian insurer facing with financial problems. At the beginning of this year, Astra Asigurari, Romania’s largest insurance company in the last two years, was put under special administration by the ASF, due to financial issues. ASF decided to suspend the shareholders and the management of Astra, in order to help the firm recover financially, with KPMG taking over as special administrator. Recently, Astra’s shareholders approved a EUR 109 million share capital increase as part of the recovery plan. Astra is controlled by Romanian businessman Dan Adamescu.
Another large insurance company, Omniasig, which is part of Austrian group Vienna Insurance, is now involved in a scandal regarding false insurance policies. Omniasig employees and management are now under investigation for allegedly selling illegal insurance policies for houses.
However, the new ASF president Misu Negritoiu, said last week that all the policies Omniasig signed are valid and that the company has a solid financial situation. Omniasig was the fourth largest insurer in Romania in 2012, with a market share of 9.63 percent.
In 2013, the insurance market stagnated at EUR 1.87 billion gross premiums, which is 1.31 percent of GDP, according to ASF data.
Andrei Chirileasa, [email protected]