Current bill on RCA market could create negative long-term effects in Romania

The current emergency ordinance which aims to regulate the mandatory car insurance market RCA will bring medium and long-term effects that are hard to control and repair. The current bill focuses on effects and fails to resolve the main cause, namely the fulminant growth in the damage claims ratio, according to the National Association of Insurance and Reinsurance Companies in Romania (UNSAR), reports local Economica.net. Prime Minister Dacian Ciolos announced last week that the RCA reference tariff would be frozen for the next six months via an emergency ordinance approved by the Government. The measure was introduced following the road carriers’ protests, but it didn’t mention the level at which the RCA premiums would be frozen. The transporters’ representatives and the Financial Supervisory Authority (ASF) then reached an agreement to freeze RCA premiums for heavy trucks at RON 7,500 (EUR 1,685) per year, compared to a level of about RON 20,000 that the insurers were charging in recent months. “After the end of the six months in which the rate is capped, we will most probable see a rebound in sustainable prices for insurers; the situation will create again the perception of uncontrolled growth and an unbalanced market,” reads the UNSAR press release. editor@romania-insider.com