Insolvent Romanian insurer Euroins sues Bulgarian parent group

Insolvent Romanian insurer Euroins, under the external management of CITR insolvency experts, has sued the Bulgarian reinsurance company EIG Re in order to recover some RON 800 million (EUR 160 million) transferred by the Romanian subsidiary a couple of weeks before losing its operating license.

CITR sued EIG Re, a reinsurance firm in the Eurohold group, both in Romania and Bulgaria, Economica.net reported.

The money was transferred to EIG Re under a contract with unusual clauses that block Euroins’ access to the funds in case it loses the operating license. Furthermore, under the clauses of the reinsurance contract, EIG Re is no longer bound to meet its obligations if Euroins loses its license.

Insurance company Euroins, part of the Bulgarian group Eurohold, had a 27% market share in the segment of the third-party liability market segment (RCA) before the Financial Supervisory Authority (ASF) withdrew its operating authorization in March last year.

ASF found that the company had a solvency capital deficit of over EUR 400 million, that is, it could not guarantee the payment of obligations. Shortly before, allegedly anticipating the decision of the ASF, Euroins transferred almost all the reserves to EIG Re, a reinsurer from the group with almost negligible activity compared to Euroins Romania.

(Photo source: Inquam Photos/Octav Ganea)