Romanian insurance brokers claim capping their fees would drive them out of market

The operation of the insurance brokers, over 40,000 country-wide, will be seriously endangered by the provision that caps their fees at a level of 5% of the third-party liability (RCA) car insurance fees, as proposed by the Financial Supervisory Authority (ASF), the Romanian Employers' Association of Insurance - Reinsurance Brokers (PRBAR) claimed.

The financial markets regulator ASF included the provision in a decision, already greenlighted by the Ministry of Finance, for temporarily capping the RCA insurance fees.

Capping the brokerage fees at no more than 5% of the gross premium will lead to the elimination of many distributors from the market who, in this context, will not be able to cover their operating costs. Therefore, there will be a massive reduction in the independent distribution of insurance, which is an essential component of the insurance market, the PRBAR argued, according to Agerpres.

PRBAR also claimed that procedures used by ASF to promote the bill capping the RCA fees breach the national regulations and the bill itself breaches the European competition regulations.

To protect the consumers against the "speculative attempts", the Romanian financial markets regulator ASF proposed and the Ministry of Finance reportedly approved to cap the third-party liability (RCA) car insurance fees for a period of six months. The fees will be capped at a level some 30% lower than those charged in August 2021 - after the collapse of the City Insurance insurer.

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