Euroins Insurance Group (EIG), part of the Bulgarian Eurohold group, has filed a formal appeal with the Court of Justice of the European Union (CJEU) in connection with the report of the European insurance body EIOPA regarding the financial problems of former RCA leader, Euroins Romania. Bulgarians claim damage caused by the way this report was written, published and presented.
Kirill Boshov and Tanya Blatnik, EuroinsPhoto: AGERPRES
- “The EIOPA report on the technical reserves of Euroins Romania (as of September 30, 2022) was published on March 28, 11 days after the FSA revoked the EIRO license. At the same time, EIOPA has not published any official documents referring to this report, and no official documents in this regard have actually been submitted to the EIG.
- This meant being unable to obtain information about the findings, defend oneself and respond to the allegations in the public space, given that in the following days, fragmentary parts of this EIOPA report were leaked to the press by several Romanian publications, which constitutes another violation of the rules in this area.
- In addition, the same report was submitted by the ASF Bucharest Court of Appeal, further limiting EIG’s ability to provide the best possible legal protection for the interests of its insured clients and shareholders.
- The insurance group subsequently challenged this report in the Board of Appeal (BoA) of the European Supervisory Authority (ESA), arguing that it significantly infringes on the company’s right to protection, fails to comply with EU rule of law principles, and ignores the original request of the EIRO’s Impartial and Independent Reserve Valuation Panel.
- On June 8, the ESA Board of Directors decided not to consider the EIG appeal on the merits.” This is stated in the press release of the group Eurohold distributed on Thursday.
ASF told the government that the EIOPA report confirms Euroins’ financial problems.
We remind you that the Financial Supervisory Authority (ASF) has made decision no. By Decision No. 262/17.03.2023, revoke the permit for the activity of Euroins Romania, at the same time noting the state of insolvency of the company, in the presence of a solvency capital deficit (SCR) in the amount of 2.2 billion lei and a minimum capital deficit (MCR) in the amount of 1.75 billion lei .
On April 5, 2023, ASF management was called to the government to explain RCA’s price cap in the context of a major new bankruptcy in the RCA market at Euroins, at the time, Valentin Ionescu, CEO of the insurance company. ASF said that EIOPA had conducted its own analysis and confirmed the decision taken in the case of Euroins.
- “EIOPA validated the ASF analysis and ASF solution at Euroins. We and the Bulgarian authorities also received this report, but we cannot make it public because we do not have the consent of the European authorities. I can confirm what has appeared in the press. EIOPA’s adjustments for technical provisions and reinsurance are major adjustments, just like ours.
- The main adjustments relate to best estimates, gross technical reserves and reinsurance cessions. The need for SCR is public, it is about 2.2 billion lei, that is, 440 million euros. EIOPA comes and confirms our amount, there is actually more to the EIOPA adjustment.”, declared the ASF director at the time.
Euroholding accused of possible illegal information leakage / Such EIOPA conclusions could only concern very old financial periods
With regard to information relating to the EIOPA report, the Bulgarian group Eurohold reacted on Wednesday, blaming the leaking of such information from the report, which Euroins did not receive, would violate the law.
- “Neither Eurohold nor Euroins Insurance Group nor its shareholders and representatives have received any official control reports or any other valid documents relating to the capital or solvency of Euroins Romania. Leakage of such information may mean that the official institution has violated the law.
- Since we did not receive such an audit report, we do not know what the conclusions of such a report are. Such conclusions can only apply to old financial periods, for example, from September 30, 2022. As I mentioned earlier, the reinsurance contract with EIG Re covers all risk associated with the Euroins Romania portfolio, including claims, as well as a possible increase in the reserve and a possible decrease in the coverage of previous reinsurance contracts that were in force before signing the contract with EIG Re.
- Let us once again emphasize the fact that the reinsurance agreement between Euroins Romania and EIG Re was valid from January 1 to March 17, 2023. this reinsurance contract and left all insured customers without insurance protection and coverage.
- Finally, EIG shareholders, including the EBRD, presented ASF with a concrete proposal that would save all FGA costs and prevent chaos in the Romanian insurance market. We are ready to present this proposal publicly when appropriate. We have also submitted this proposal to the Bulgarian Regulatory Authority (FSC) and EIOPA.” presented by Eurohold Group.
On April 5, the Chuca government approved a 6-month RCA price cap at the end of February 2023 with one condition: during this period, the ASF and the Competition Council will prepare the necessary amendments to the RCA law in order to avoid future crises and bankruptcies.