Romanian Insurers That Sell Cheap RCA Policies And Fail To Pay Damages Risk Losing License

One of the solutions to reduce the number of complaints on the mandatory car insurance (RCA) segment is to eliminate insurance companies that apply low premiums but fail to pay damages when accidents occur, Albin Biro, representative of Romania”s Financial Supervisory Authority (ASF), said Thursday.

According to Biro, ASF may eliminate insurance companies that fail to pay damages, but must first analyze the consequences of such a decision and how it would affect the fund protecting policyholders.

In the first nine months of 2012, former insurance market regulator CSA received 8,520 complaints concerning services offered by insurers and insurance brokers, up 65% on the year.

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Of total complaints, 5,421 targeted RCA insurers and represent 0.11% of the total number of RCA contracts signed in January-September 2012. In most cases, policyholders complained insurers failed to pay damages, CSA said in December.

According to CSA, 60.15% of the total number of complaints in 2011 targeted Euroins, Carpatica Asig and Astra.

In 2012, underwritten premiums on the RCA segment accounted for a quarter of revenues on the life and general insurance market.

Insurers licensed to sell RCA policies are ABC Asigurari, Allianz-Tiriac Asigurari, Generali Romania, Asirom, Euroins Romania, Astra, Omniasig, Carpatica Asig, Groupama Asigurari, UNIQA Asigurari and City Insurance.