BUCHAREST (Romania), July 28 (SeeNews) – Romania's financial regulator, ASF, said on Thursday it has withdrawn the operating licence of Romanian general insurer Carpatica Asig, saying it believes the company is insolvent.
Also, ASF requested the opening of bankruptcy proceedings for Carpatica, it said in a statement.
The move comes nearly two months after Dutch-based International Insurance Consortium (IIC) said it would not proceed with the completion of the purchase of Carpatica, citing a "communicative blockade" and a further deterioration of the insurer's financial situation.
Carpatica was undergoing a financial recovery procedure and was placed under special management by the country's insurance guarantee fund, FGA, which made it hard for IIC to access certain information, IIC said at the beginning of June.
In March, IIC signed an agreement for the acquisition of 100% of Carpatica and projected to finalise the transaction before the summer, depending on regulatory approval.
Carpatica has been looking to attract a strategic investor since last September. At the time it also disclosed plans to secure a loan of at least 30 million lei as part of its efforts to improve its financial status. Back then, the company also raised its share capital by 2.5 million lei ($615,248/559,446 euro) to 24.3 million lei, via a cash injection.
In September 2014, ASF approved a financial recovery plan for Carpatica aimed at helping the company achieve operating profit by balancing its portfolio and cutting costs.
Carpatica is the eighth biggest insurer in Romania according to ASF data. Romanian transport company Atlassib Sibiu owns 93.97% of Carpatica.
In January, the company opened its seventh subsidiary in Bucharest, hoping to boost business in the capital and to increase its corporate and retail client portfolio. It now operates a total of 63 subsidiaries and agencies across the country.
Carpatica is the second biggest Romanian insurer to go bankrupt after Astra Asigurari, at the end of April.
(1 euro=4.4687 lei)