Eurohold launched legal action against the Romanian regulator ASF for insurer Euroins Romania

Eurohold confirms the stability of all its other businesses and subsidiaries outside Euroins Romania

The group launched legal proceedings against the decision of the Romanian Financial Supervisory Authority and the illegal actions of the Romanian regulator.

With reference to decision of the Romanian financial regulator ASF for Euroins Romania, part of Euroins Insurance Group AD – revocation of the licence for insurance activity, opening of bankruptcy proceedings and appointment of the Insurance Guarantee Fund (FGA) as temporary administrator of the company, the management of Eurohold makes the following statement:

Outside of Euroins Romania, all other subsidiaries and businesses of Eurohold in all the other 11 markets in which they operate, including insurance and energy, are operating and will continue to operate as usual and without any problems, serving their customers and obligations and carrying out their business plans for the year.

In relation to the decision of the financial regulator in Romania against Euroins Romania, the holding has started a procedure to challenge this decision in all competent courts in Europe and around the world.

Eurohold and Euroins Provided Additional Guarantees for the Stability of Group’s Romanian Unit to Protect the Company from Further Regulatory Overpressure

The management of Eurohold Bulgaria informs the public that despite its disagreement with the actions of some officials of the insurance supervisory authority in Romania against the local unit of Euroins and the ongoing disputes with them, the company has provided additional guarantees for the financial stability of the Romanian insurance company in order to protect the insurer from further regulatory overpressure.

Euroins Romania signed a quota share reinsurance agreement with EIG Re EAD, the reinsurer of Euroins Insurance Group AD (EIG), Eurohold’s subsidiary subholding and owner of the Romanian company.

This is due to ongoing disputes with officials of the insurance regulator in Romania over the existing reinsurance contracts of the local unit of Euroins. The new reinsurance agreement is consulted with a team of experienced international experts and lawyers.

Eurohold and EIG Re have duly informed the competent state authorities and the financial supervision in Bulgaria about this new measure, and Euroins Romania – the relevant financial regulator in Romania.

The agreement with EIG Re complies with all European requirements and covers the full amount of insurance claims of the Romanian company.

The new reinsurance contract ensures that a significant part of the risk undertaken by Euroins Romania will be transferred outside the company.

This decision is associated with higher costs for the company, but it is well established and widely adopted in world practice. It is an additional guarantee for stability and responds to the requirements of regulatory authorities.

Furthermore, this measure resolves all the issues raised by the insurance supervisory body in Romania, which continue to be a subject of discussions and disputes.

The engagement of the group’s reinsurer is another guarantee of the management’s confidence in the good financial state of Euroins Romania and in the correctness of the company’s theses presented to the relevant regulatory authorities.

An additional security for Euroins Romania and EIG Re is that a significant part of the risks taken by the new reinsurer are retroceded to leading European reinsurers.

In this way, the interests of the policyholders are protected to an even higher degree and this guarantees an even higher level of stability. The newly adopted measures ensure a higher coverage of the Minimum Capital Requirement (MCR) and the Solvency Capital Requirement (SCR) of Euroins Romania – the two key indicators that determine whether an insurer is stable and solvent.

The management of Eurohold and EIG, as well as the team of international experts consulted by the two companies, are convinced of the correctness of the previous actions of Euroins Romania’s management and have no doubt that the existing reinsurance contracts fully cover the risks assumed by the company.

This is why and despite the signed new quota share reinsurance contract, the efforts defending the validity of the previous reinsurance contracts, contested by officials of the insurance supervision in Romania, will continue.

The request for an independent international audit of the state of Euroins Romania before and after these additional measures remains as well.

The management of Eurohold and EIG assure once again that Euroins Romania is in excellent financial state and servicing its obligations to clients regularly and on time. The expectations are that the company will continue to be one of the leading insurers on the market.

The management of both companies hopes that in future the Romanian company will not be again subject to attacks or actions that directly breach European legislation. In conclusion, the management of Eurohold expresses gratitude for the support provided by all state authorities, including the Ministry of Finance and the financial regulator in Bulgaria.

Joanna Logvin by Joanna Logvin