Romania’s Financial Supervisory Authority (ASF) has decided to revoke local insurer Carpatica Asig’s operating license and ask for the company’s bankruptcy due to financial problems.

Carpatica Asig was the seventh biggest insurer in Romania, in 2015, with gross premiums underwritten of over ERU 130 million and a market share of 6.7%. Moreover, the company was one of the leaders on the mandatory car insurance (RCA) segment. However, the company also had some of the highest losses in the local insurance sector last year, of close to EUR 46 million.

The company’s bankruptcy was anticipated as a recent report by Deloitte showed that its liquidation would be less costly than the scenario in which the company continued to operate.

Carpatica Asig is the second big local insurer that shares this fate after Astra Asigurari, which went bankrupt following ASF’s decision in August 2015. Both insurers are owned by Romanian investors who have had troubles with the law in recent years.

Carpatica Asig is controlled by local businessman Ilie Carabulea, who was arrested in March this year for embezzlement and money laundering, after he tried to hide his company’s financial problems.

Dan Adamescu, Astra Asigurari’s majority shareholder, was sentenced to 4 years and 4 months in jail, in May this year, for bribing judges. He is also investigated for leading Astra Asigurari to bankruptcy and causing a EUR 190 million damage to the company.

ASF placed Carpatica Asig under its resolution mechanism earlier this year, and the Policyholders Guarantee Fund took over the company’s management from its board of directors. However, the insurer’s financial situation continued to deteriorate.

Moreover, ASF rejected the only bid from an international investor who showed interest in the company, IIC Group, arguing that the investor hadn’t proven the capacity to finance Carpatica Asig. The Dutch investor said that Carpatica’s special administrator hadn’t allowed it to see all the documents that showed the company’s financial situation.

editor@romania-insider.com