Romania’s biggest insurer City allegedly reported inexistent reserves
Romania’s biggest insurer City reported inexistent resources as part of its capital requirements, the financial markets regulator ASF states in the decision by which it put under external management the insurer. “Hundreds of millions of RON” were missing, according to Ziarul Financiar daily.
As a result, the coverage ratios were negative.
Thus, after the adjustments made by ASF to the financial records of the insurer, taking into account the lack of cash in the records of the banking company, with which the insurer would not have contractual relations, the value of own funds available and eligible for solvency capital requirement (SCR) and minimum capital requirement (MCR) turned negative.
From an SCR coverage of 1.25 and MCR of 3.25, ASF corrected the figures to an SCR coverage of -0.27979 and -3.1752 for MCR, respectively.
The decision, published in the Official Journal on June 7 (and by Hotnews.ro), details the grounds that led to the massive (RON 10.9 mln, or over EUR 2 mln) fines levied against the insurer’s management and the company itself.
The insurer’s shareholders were asked to come up with a financial recovery plan.
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