Romanian authorities to prevent high car insurance fees by “recommended” car repair prices

Romania's Competition Council proposed a "reference" per-hour fee charged by car repair shops as a means to prevent the expected rise in the mandatory car insurance (RCA) fees after the so-called "direct compensation" clause becomes mandatory in all RCA contracts.

The financial markets regulator ASF will update this "recommended" fee every year, according to ASF vice-president Cristian Rosu, Profit.ro reported.

He explained that the data would be collected by an independent state institution, such as the Romanian Auto Registry (RAR), from independent car repair shops. The same institution will compile the data and calculate the "recommended" fee.

Furthermore, the recommended fee will not be mandatory but will rather play a similar role as the official exchange rate for the national currency (that is not mandatory for the banks in relation to their clients).

As of mid-2021, Romanian insurers will introduce the direct compensation clause in the mandatory car insurance contracts, which is expected to increase the insurance prices.

Separately, the insurers and the car repair shops have constantly accused each other of unfair commercial practices.

The mandatory car insurance market is dominated by two insurers, City Insurance (43.5% market share last year) and Euroins (31.4%).

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