Sursa foto: assets.publishing.service.gov.uk
The Financial Supervisory Authority (ASF) decided last week to open bankruptcy proceedings for the car insurance market leader, City Insurance. In this context, the National Union of Insurance and Reinsurance Companies in Romania (UNSAR) and the Bureau of Motor Insurers in Romania (BAAR) have launched an information guide for policyholders, both for those who hold a City Insurance policy and for claimants who have to recover damages on a City Insurance policy.
Three million Romanians are customers of City Insurance, i.e. 45% of the Motor third party liability (MTPL) insurance market.
Here’s what City Insurance policyholders should know:
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a) If you have an insurance policy issued by CITY Insurance
Your insurance policy remains valid and effective. However, you can cancel your policy at any time and take out a new policy with another authorized insurer. If you cancel the policy and you have had no claims during the period of validity up to cancellation, for the unexpired period you are entitled to recover the difference in premium from the FGA – Fonds de Garantaire des Assurances (Insurance Guarantee Fund) by following the procedure referred to in point (b) of paragraph 1. (ii) below.
ATTENTION! Your insurance policy remains valid, as provided for by law, until 90 days after the final decision to open bankruptcy proceedings. This means that if the validity of the policy stated in the insurance document exceeds the above-mentioned period, you will no longer be insured.
The above also applies if you have a liability insurance policy issued by CITY Insurance. You can therefore drive on public roads and will not be penalized in the event of traffic checks by the authorities, as your MTPL policy is valid. In short, you are still insured, of course with the above warning in mind.
Also, if you are guilty of causing a road accident resulting in property damage and/or bodily injury, the injured third party will be compensated under this policy within the limits set by Law 213/2015 on the Insurance Guarantee Fund, i.e. 450,000 lei, and through registration as a creditor in the bankruptcy proceedings to be settled in the first instance by the Bucharest Court and in the appeal phase by the Bucharest Court of Appeal.
b) If you are the victim of a road accident caused by a driver of a motor vehicle insured by a MTPL policy issued by CITY Insurance:
(i) If you have not yet reported the damage to CITY Insurance, you have the right to do so by applying to the Insured’s Guarantee Fund no later than the date of the insured’s cancellation of the MTPL policy, but no later than 90 days from the date of the decision to open bankruptcy proceedings;
(ii) For the collection of the indemnities/compensations you will be able to submit a reasoned request for payment accompanied by supporting documents, starting from the date of publication of the ASF’s decision to withdraw the authorization for CITY Insurance in the Official Gazette and up to a maximum of 90 days from the final decision to open the bankruptcy procedure or from the date of the birth of the claim, when it arose later.
The FGA shall be entitled to start payment of amounts due to insurance creditors (policyholders, beneficiaries, injured third parties) from the date of the finality of the decision to open bankruptcy proceedings against CITY Insurance.
For more details please see: www.fgaromania.ro
IMPORTANT! At the same time, it should also be noted that there is currently a draft Emergency Ordinance under public debate that amends some of the provisions of the current law on the activity of the FGA (Law 213/2015 on the Insurance Guarantee Fund) for the benefit of insurance creditors. One of the most important changes envisaged concerns the shortening of the period in which the FGA can start making payments to the injured parties, i.e. to 60 days from the date of publication in the Official Gazette of the decision of the Financial Supervision Authority to withdraw the operating license and to find that there are indications of the insurer’s insolvency (and not from the date of the final ruling on the opening of bankruptcy proceedings against CITY Insurance, as is currently the case). The draft also provides for an increase in the guarantee ceiling from 450,000 lei to 500,000 lei and the granting of compensation for each insurance claim due under an insurance contract.
These proposed provisions aim to provide additional protection for policyholders in the event of an insurer’s insolvency.
(iii) Regardless of whether or not you have applied to the FGA for compensation, you also have the right to make a claim for admission of the claim (compensation claimed) in bankruptcy proceedings within the time limits and following the instructions of the judicial liquidator to be appointed by the Bucharest Court. You should be aware that, to the extent that you have received sums from the FGA, they will be deducted in the bankruptcy proceedings from any amounts you may still be entitled to receive.
Edited for English