March 17 (SeeNews) - Romania's financial regulator said on Friday that it has withdrawn the operating licence of Euroins Romania, part of Bulgaria’s Euroins Insurance Group, and decided to file a court request for the launch of bankruptcy proceedings.
The Romanian supervision authority, ASF, has appointed the Policyholders Guarantee Fund (FGA) as an interim administrator of Euroins, the regulator said in a statement.
The FGA will manage the insurer's activity until the appointment of a liquidator, the financial regulator added.
Between February 2020 and January 2023, ASF fined Euroins Romania a total 16 million lei ($3.46 million/3.25 million euro) for violating various regulations related to its activity, the regulator also said.
Last month, Euroins Romania's parent Eurohold Bulgaria [BUL:EUBG] said that it took further steps to guarantee the solvency of its indirect subsidiary so as to shield it from what it describes as "regulatory overpressure".
Euroins Romania signed a quota share reinsurance agreement with EIG Re, the reinsurance arm of Euroins Insurance Group (EIG), thus addressing all remarks made by the Romanian insurance supervision authority, Eurohold Bulgaria said at the time. EIG is a Eurohold subsidiary and the owner of Euroins Romania.
The deal provides a higher coverage of Euroins Romania's minimum capital requirement and solvency capital requirement - the two key indicators of an insurer's stability and solvency, Eurohold said at the time. It covers the full amount of insurance claims of the Romanian company and resolves all outstanding issues constituting the dispute with the insurance supervisory authority in Romania, the group added.
The move came after a week earlier Eurohold said that Euroins Romania was the target of a hostile takeover attempt.
Eurohold Bulgaria is a leading energy and financial services group active in Central, Eastern and Southeastern Europe. It is listed on the Bulgarian and Warsaw Stock Exchange. EIG provides a full range of insurance products, serves over 4 million customers in 11 countries and has over 3,000 employees.
In early February, ASF approved the acquisition of a minority stake in Euroins Romania parent EIG by the European Bank for Reconstruction and Development (EBRD). The deal was already given the green light by Bulgaria's Financial Supervision Commission at the end of 2022,
(1 euro=4.91972 lei)