Romanian Government instructs state bank CEC to set up insurance arm
The prime minister of Romania, Nicolae Ciuca, said on March 22, before the Government meeting, that he supports the state bank CEC entering the insurance market, either by setting up a new company or taking over a company from the market.
He said that CEC should have an insurance division within three months at the earliest, News.ro reported.
Finance minister Adrian Caciu previously stated, in the context of the scandal related to the insolvency of Euroins and the increase of third-party liability insurance (RCA) fees, that he has asked the CEC bank to submit its authorization documents to the market authority ASF and has one month to get the functioning permit.
Euroins is the second of the two major insurers that goes bankrupt within not much more than a year. Both companies previously had a combined market share of 80% in the RCA insurance segment – the largest of the Romanian insurance market.
The prices increased after the fall of City Insurance (the first of the two) last year, but the Government now seeks to cap the fees charged by the insurers that remained in the market for six months.
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