Market regulator says troubled Romanian insurer City can survive if nobody panics
For the troubled Romanian insurer to survive, it is important that intermediaries do not give up selling City Insurance policies and that the Dutch investment vehicle I3CP, financed mainly with Greek money, does not scrap plans to fully purchase Vivendi International company, the majority shareholder of City Insurance. The same message had been expressed to brokers by the former City Insurance management.
With its entire management suspended and its shareholders deprived of their rights, City Insurance, the largest insurance company in Romania, still has a chance to recover, despite the capital deficit of over EUR 170 mln identified in a report of the Financial Supervisory Authority (ASF), according to Economica.net.
ASF placed Romania’s biggest insurer City Insurance (20% market share by revenues in 2020), under external management and set unprecedented fines for the company’s management this month. The firm is currently in the process of being sold by its Romanian owner Dan Odobescu to a Dutch-registered entity (I3CP).
The capital deficit in the case of City Insurance, the leader of the insurance market, recently fined and placed under external management by the market regulator ASF, is close to RON 845 mln (over EUR 170 mln), according to official documents. Even worse, ASF reportedly found that the insurance company presented account statements not confirmed by the issuing bank in its attempt to demonstrate that it has the necessary liquidity to meet its capital requirements.
Furthermore, ASF says that the majority shareholder of the insurer, Vivendi International - controlled by Dan Odobescu, the brother-in-law of former Prime Minister Adrian Nastase - lent City Insurance substantial amounts of money, totalling EUR 75 mln at the end of 2020. In the end, these amounts were not found in the account indicated by the company because that account did not exist, according to the documents sent by the bank.
Major frauds found by market regulator at Romania’s biggest insurer City
iulian@romania-insider.com
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