Dark clouds have gathered over the insurance company Euroins, operating on several European markets, including Poland. On Friday morning (March 17), the Romanian financial supervision authority, the Autoritatea de Supraveghere Financiară, announced that it had withdrawn Euroins Romania’s operating license. The ASF Board also supported the motion to open insolvency proceedings and the appointment of the local Insured Guarantee Fund (FGA) as the company’s interim administrator.
Why was this decision made? The message from the Romanian overseer states that the insurance company is insolvent and the capital gap exceeds EUR 400 million. Starting from February 2020, the company, which serves approx. 2.5 million customers on the Romanian market, has been repeatedly inspected by the supervisor and fined for lack of capital.
Euroins has problems only in Romania
Euroins Romania was part of the Euroins Insurance Group (EIG), which serves a total of over 4 million customers in 12 countries and employs over 3,000 people. employees. It is owned by the energy and financial holding company Eurohold, listed on the stock exchange – both in Sofia and Warsaw. According to the company’s statement, the holding company initiated the procedure to challenge the decision of the Romanian regulator in all relevant courts in Europe and in the world.
In turn, according to a communiqué of Euroins Romania, ASF ignored two independent audits currently carried out by the EBRD and the European Regulatory Authority EIOPA. These inspections will end at the end of March, of which the Romanian supervisor – according to the insurer – has been informed in detail.
Euroins has been operating on the Polish market for 5 years on the basis of a Bulgarian license, taking advantage of the EU freedom of business activity. It sells motor insurance policies plus various assistance add-ons. In 2022, it collected a total of approx. PLN 190 million in premiums from 325,000 customers. Are there reasons for concern? The company says no.
The decision of the Romanian Financial Supervisory Authority applies only to Euroins Romania. It has no impact on Euroins’ operations on the Polish market and on insurance products held by Polish customers and liabilities towards injured parties in Poland.
Further in the announcement, the insurer assures that Euroins Bulgaria has no direct capital links with Euroins Romania. Moreover, he emphasizes that Euroins Bulgaria exceeds all legal capital requirements and the insurer’s operations are fully stable and profitable.
In order to guarantee the highest level of security and transparency, insurance premiums and funds for compensation, ensuring coverage of liabilities towards Polish customers, are located in Poland.
Euroins operates in Poland, but is supervised by Bulgaria
We asked the Polish Financial Supervision Authority (KNF) in Poland for a comment on this matter.
“Euroins Romania is not a notified entity in Poland and does not conduct insurance activities in Poland. In Poland, insurance contracts under the freedom to provide services are concluded by INSURANCE COMPANY “EUROINS” AD, which is an insurance company supervised by the Bulgarian supervisory authority” – we read in the reply of the KNF press office.
The Bulgarian KNF posted a statement on its website.
“The decision of the Romanian supervisory authority does not affect persons insured in the Bulgarian insurance companies of the Euroins Insurance Group. As a result of the inspection, no problems with the solvency of individual companies from the Euroins Insurance Group or the entire group were identified.
Let us remind you that the safety of Polish customers is guaranteed by the Act on Compulsory Insurance, the Insurance Guarantee Fund and the Polish Motor Insurers’ Bureau. According to Art. 98 points 2 in the event of bankruptcy of an insurance company, the Fund’s tasks also include satisfying the claims of persons entitled under compulsory insurance contracts (OC of motor vehicle owners) for damages arising on the territory of the Republic of Poland.
In June last year, the Polish Insurance Association warned that if the prices of mandatory motor insurance policies remained at the current level, within two years, the loss for the entire market will amount to PLN 3.4 billion. The previous price war “resulted” in 2016 in a billion-dollar loss of the entire sector in the communication segment.
Karolina Wysota, money.pl journalist
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