Bulgarian holding claims ‘hostile takeover’ by Romanian regulator
The Romanian Financial Supervisory Authority (ASF) 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 a “hostile takeover”.
In its announcement, the ASF said had decided “to withdraw the operating authorisation of Euroins Romania, noting the signs of the company’s state of insolvency”.
The ASF Council made the decision based on a solvency analysis which reportedly shows a solvency capital requirement deficit of over €400 million and a capital requirement minimum deficit of over €250 million.
The company caused a spat with politicians the previous week over the news of price increases for mandatory third-party liability, the most popular kind of car insurance. This led to fears over its financial health, and the company denied facing any difficulties.
Romanian politicians spar over purported increase of car insurance prices
After the Romanian press on Thursday (9 March) reported a big price increase of the compulsory third-party liability car insurance, politicians clashed, while the biggest insurer on the market, a Bulgarian company, said the crisis was artificial.
Libertatea quotes a government source saying that ASF had found that almost all the assets in Romania of Euroins had been moved to Bulgaria.
On Friday, Eurohold published a communiqué calling the ASF’s move “irresponsible” and a“hostile takeover” by an “organised group”, adding they would challenge the insolvency procedures as they breach EU law.
The Bulgarian holding added that ASF did not wait for conclusions of ongoing audits by the European regulatory authority EIOPA and of EBRD, a stakeholder in Eurohold.
Previously, Eurohold had complained of attacks and even mafia-type pressure on behalf of some actors on the Romanian scene.
Bulgarian insurer complains of car repair extortion scheme in Romania
Eurohold Bulgaria, a leading energy and financial group in Southeast Europe, has sent a complaint to the Bulgarian prosecution regarding what it said is “extortion and corruption of extraordinary proportions” harming its Romanian subsidiary, EURACTIV Bulgaria has learned.
Euroins also claims that capping RCA premiums would mean Romania infringes EU law and would lead to “huge increases” in car insurance prices. They also say the situation could threaten both countries expected accession to the Schengen Area and Bulgaria’s accession to the eurozone.
Asked by EURACTIV to comment, the Bulgarian financial control commission KFN said the decision of the Romanian supervisory authority did not affect the Bulgarian insurance companies part of the Euroins Insurance Group AD and that as a result of the supervision carried out by the KFN, no problems with their solvency was found.
EURACTIV asked EIOPA and the European Commission to comment and will update this article with reactions.
[Edited by Alice Taylor]