February 9 (SeeNews) - The Bucharest Court admitted a request by the country's financial regulator ASF to open bankruptcy proceedings against Romania's leading insurer City Insurance, the court said on Wednesday.
The court ordered the dissolution of City Insurance and stripped its administrators of the right to manage the company's assets, according to the decision posted on the Bucharest Court's website.
City Insurance can appeal the decision within seven days.
ASF said that the court decision confirms the appropriateness of its decision to withdraw the operating license of City Insurance in September.
On September 17, ASF revoked City Insurance's licence and asked for the start of bankruptcy procedures, saying its short-term financing plan and its recovery plan are "obviously inadequate" and do not ensure the restoration of the company's financial situation.
On September 8, ASF said that Netherlands-based I3CP Holdings has failed to cover a capital increase of City Insurance within the legally prescribed period.
On August 25, I3CP said that it has subscribed all of the new shares issued to increase the company's capital by 150 million euro ($177 million).
City Insurance approved in July the issuance of 738 million new shares of 1 leu ($0.24/ 0.2 euro) in par value each in order to comply with the obligation to restore its own funds required by law to cover both the solvency capital requirement (SCR) and the minimum capital requirement (MCR).
In April, local investment firm Vivendi International reached an agreement with I3CP Holdings to sell its entire majority stake in City Insurance. The deal was expected to be completed in the third quarter of 2021, subject to approval by Romania's relevant authorities, City Insurance said at the time.
Vivendi owns 85.23% of City Insurance, while the remainder is held by individuals and legal entities, according to data published on the insurer's website.
City Insurance provides general insurance solutions. Founded in 1998 by Romanian and foreign investors and headquartered in Bucharest, the company operates 42 offices and branches across the country, employing 400 people. With total assets of 700 million euro and gross written premiums of over 500 million euro, the company is serving more than 4 million customers.
City Insurance led the Romanian general insurance market in terms of GWPs in the first nine months of 2021 with a market share of 18.9%, data by ASF showed.
I3CP is an ECEEMEA investor focused on insurance, reinsurance, asset management and fintech sectors. I3CP manages over 15 billion euro and has offices in Amsterdam and Athens.