The silence from the European Commission and regulators over the revoking of the license of Romania’s biggest car insurer is concerning, and a full investigation should take place, MEP Lars Patrick Berg (Germany, ECR) told EURACTIV in an interview.
Berg recently posted a parliamentary question to the EU executive regarding the decision of the Romanian regulator ASF in March to revoke the license of Euroins, a Bulgarian company, the largest car insurer on the Romanian market.
The company called the move a ‘hostile takeover’ as while ASF says the company is bankrupt, the company maintains it has sufficient capitalisation.
Bulgarian holding claims ‘hostile takeover’ by Romanian regulator
The Romanian regulator announced on Friday (17 March) the insolvency of the country’s largest car insurer, Euroins, a Bulgarian-owned company part of the Eurohold holding, a move that the latter decried as “hostile takeover”.
Berg believes that this decision was in breach of normal procedures, in particular, the EU framework and “highlights how vulnerable Solvency II is”.
Solvency II is the prudential regime for insurance and reinsurance undertakings in the EU that entered into force in January 2016.
“The actions of the Romanian regulator turn that view on its head”, said Berg, adding that “ASF ignored the guidance of its Bulgarian counterpart” (the Bulgarian Financial Supervision Commission, KFN).
“The actions of ASF make a joke of the Solvency II arrangements for consultation and information between member state supervisory authorities”, the MEP said.
In his words, when ASF revoked the license of Euroins, it was aware that a series of independent examinations of the insurer were underway including an examination by EIOPA (the European insurance regulator) – and it “simply refused to wait until those studies were published”.
“It is important that the truth be known, that is why I am calling for an investigation”, Berg said.
In his parliamentary question, Berg says the revoking of the license “was the culmination of a campaign by ASF against Euroins”. Asked to elaborate, he said that there were numerous examples how ASF has breached confidentiality requirements of Solvency II by selectively leaking material relating to Euroins Romania.
Indeed, Romanian website, Libertatea, has become famous for publishing information undermining Euroins, including leaking material from an alleged report by EIOPA, which remained unconfirmed.
Asked about the role of the European regulator EIOPA, Berg said that both EIOPA and the EU Commission “seem to have turned a blind eye to this case”.
“I am particularly disappointed at the manner in which EIOPA has acted – or failed to act”, he said.
The MEP said he wanted to see the EIOPA report on the solvency of Euroins Romania.
“We have not seen the full report. The full report should be published. The Parliament which is supposed to be reviewing Solvency II has a right to know what it contains. The ECON Committee which is leading the review should in my view, demand a full account from the Commission as to what has happened in this case”, he said.
Asked about the problems for the clients, he said that “millions of unfortunate law-abiding Romanian citizens” had to find another insurer and undoubtedly face higher costs for third-party motor insurance.
“Inevitably, the reduction in competition will drive costs up in the Romanian insurance market. Road users from other member states could also find themselves in difficulties if they are involved in a crash with a driver who has lost cover because of the actions of ASF”, Berg said.
Moreover, he said that since the compensation available in a case involving an uninsured car in Romania is very limited (a figure as low as €100,000 has been mentioned), such low compensation cap could leave an injured party facing real hardship.
Asked if he expected the Commission to give a proper answer and commit to carrying out a comprehensive investigation into this matter, he said:
“Sadly, the Commission all too often demonstrates a contempt for the European Parliament by trotting out ‘non-answers’ to the questions submitted by MEPs”.
He said that if the Commission evades the issue, he intends to call on the European Parliament Internal Market and Consumer Protection (IMCO) committee to debate this issue and that he would request the relevant Commissioner, Mairead Mc Guinness, to come before it “to give a full account as to the Commission’s position on the case, and to outline the steps it and EIOPA intends taking in the matter”.
[Edited by Alice Taylor]
Source: euractiv.com
