Insurers reject plan to cap car insurance fees in Romania

Romania's Financial Supervisory Authority (ASF) withdrew the draft bill on temporarily capping the car insurance fees (third-party liability) after the insurance companies and brokers argued that the document "breaches European legislation, lacks economic grounds and is ambiguous on certain aspects, risking further destabilisation of the market."

Even the association of consumers of financial services, while agreeing with the principle of temporarily capping the car insurance fees, objected to the poorly designed plan drafted by ASF – which is under increasing pressure to replace the management and the way of operating, after witnessing two major bankruptcies without intervening.

"As a result of the observations pronounced on the initial draft put into public debate, the project was withdrawn precisely to make an analysis of these observations," said ASF spokesperson Daniel Apostol, quoted by Agerpres.

After the car insurance market saw the second major collapse in roughly a year, the supervisory authority ASF came up with a proposal to cap the fees to either current fees or the fees charged last march (whichever is smaller) in an attempt to prevent further price hikes. But the market authority had to put it on hold before being discussed by the Government.

The bill will hopefully be re-designed by the new ASF management.

(Photo source: Dreamstime.com)