Today the Bucharest Court will judge a new term in the process of opening the bankruptcy procedure of the EUROINS insurance company.
At the time of the ASF decision to withdraw the EUROINS operating authorization, on March 17, 2023, the company had approximately 2.5 million customers in Romania.
The first term in the EUROINS bankruptcy process took place at the Bucharest Court on April 28, ASF being among the creditors. Then, the court decided to postpone the decision until May 26.
According to law 85/2014, all policies issued by the company cease by law 90 days from the date of the pronouncement of the decision to open the bankruptcy procedure.
Creditors of Euroins can submit payment requests to the Fund for the Guarantee of the Insured starting from the date of lifting the operating authorization of the insurer, but no later than 90 days from the date of the definitive stay of the decision to open the bankruptcy procedure or from the date of birth of the right to claim, when it arose later, under the penalty of forfeiture.
If the court decides to open the bankruptcy today, the decision can still be appealed and the deadline until which creditors can submit payment requests is extended.
How many people have requested money from FGA so far
With the publication of the decision in the Official Gazette, on March 22, policyholders could turn to the Policyholder Guarantee Fund (FGA) for payments or recovery of insurance premiums.
FGA received, starting from March 17, 2023 and until May 21, 2023, 15,583 requests to open damage files, from potential insurance creditors of the mentioned company. Of these, the Fund registered 11,508.
Also, in the same period, the FGA received 75,498 requests for the Payment requests category. Of these, 29,089 payment requests were registered for the granting of compensations/indemnities as well as 13,539 payment requests for the granting of premium refunds. A total of 42,628 requests were registered.
On March 17, 2023, when the authorization was withdrawn by the ASF, Euroins had approximately 2.5 million customers in Romania.
Euroins’ policies are currently still valid, but today’s court decision may see them expire in a maximum of 90 days or extend their validity by postponing the company’s bankruptcy decision.
What happened after the bankruptcies of Astra, Carpatica and City Insurance
The other three bankruptcies that occurred on the insurance market in Romania in the last 8 years meant huge compensations paid by the Insured Guarantee Fund, the payments have not yet ended.
In the case of Astra, the first major bankruptcy on the insurance market in Romania, the supreme court acquitted all the defendants in the case in 2021, even if there were convictions ordered in 2019 by the trial court.
The only case in which final convictions were given was that of the bankruptcy of Carpatica ASIG. The court ordered five convictions in 2017, with sentences ranging from 10 months to 5 years and 6 months in prison. Five directors of the insurance company were convicted, while all ASF members sent to court were acquitted.
The most recent investigation is related to the bankruptcy of the insurance company City Insurance. Prosecutors have received complaints from ASF since 2 years ago. At the moment, two criminal files are opened at DIICOT, but so far no suspect has been found.
In the case of the Euroins bankruptcy, prosecutors from the General Prosecutor’s Office say they have received a complaint related to Euroins since last year, but so far they have not been able to gather enough evidence to indict anyone.
The cost of Astra Asigurări’s bankruptcy amounts to over 550 million lei, money paid by the Insured Guarantee Fund. Carpatica ASIG meant another 498 million paid by FGA, and the City bankruptcy is shaping up to be a disaster. On top of all that, payments follow in the event of the Euroins bankruptcy.
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