By Decision no. 901/18.04.2016 , The Financial Supervisory Authority has ordered the initiation of the financial recovery procedure, by plan, of Societatea de Asigurare-Reasigurare City Insurance S.A.
In order to adopt this measure, the Financial Supervisory Authority invokes the provisions of Art. 7, Par. a, of law no. 503.2004.
In order to correctly inform our partners, our clients and also the public, we consider that the following statements are necessary:
1. The Decision of the Financial Supervisory Authority by which the financial recovery procedure of Societatea de Asigurare-Reasigurare City Insurance S.A. was ordered is essentially illegal and profoundly unfounded. Without performing a background analisys, we inform you that all the arguments of this decision fail to prove the existence of any circumstance expressly specified by law, that would allow such a measure to be taken. The invoked text says that for such an action, the authority would have had to ascertain – based on objective proof – that, by infringement of specific obligations, fulfilling the obligations toward the insured persons was periled. Not only that such a situation was not observed, but the leadership of the Financial Supervisory Authority ignored in bad faith the results of the audit that we submitted on 18.04.2016, which shows that we meet and exceed all the indicators imposed by Solvency II – the law in force starting on 01.01.2016.
2. Although according to the legal provisions, the penalty of financial recovery is aimed at a single purpose – that is protecting the interests of the insured creditors – by the aforementioned Decision, measures that by themselves will impair the payment capacity of the company are imposed upon ourselves, to the detriment of the insured persons. We remind here that, by the recovery plan, we are prohibited to sell an entire class of insurance – surety bonds – and the overall volume of activity is limited to 75% of the 2015 figures.
3. We indicate on this occasion that such restrictive and repressive measures match a wider context of pursuits by the Financial Supervisory Authority to diminish up to cancellation the activity of the insurance/reinsurance companies with Romanian capital, favoring those with foreign capital.
In order to support our claim, we enumerate the many and diverse situations in which the leadership of the Financial Supervisory Authority expressly stated that the insurance companies with Romanian capital are not performant, that they do not follow the market rules and that only the large insurance companies should remain in the market, meaning the multinationals. Consistently following this purpose, the Financial Supervisory Authority uses a wide range of means such as:
– Repeated and long investigations, followed by unfounded and contradictory sanctions. We separately present a part of the investigations held against Societatea de Asigurare-Reasigurare City Insurance S.A., which show that for most of the time we have been ‘busy’ with preparing reports, showing documents, repeatedly reporting etc., please check www.cityinsurance.ro/centru-media/
– divulging to the media some fake ‘news’ about some so-called problems in the activity of the company with Romanian capital, as well as some confidential data, not for public usage, about some economic aspects uncovered during investigations.
– the refusal to provide support when the company was treated unfairly by decisions taken by other institutions or in litigations. All these abusive actions had as effects the denting of the public image of the company, scaring off potential clients and also great difficulties in attracting investments.
4. We inform all our clients that Societatea de Asigurare-Reasigurare City Insurance S.A. meets all the capital requirements, according to the calculus rules set by European Directive Solvency II and that we are able to pay all the justified claims. We will make all efforts needed to successfully surpass the hardships created by the recovery plan decided by the Financial Supervisory Authority, without prejudice to the interests of our clients.
5. Regarding the fact that the large number of complaints for failure to pay MTPL indemnities were invoked countless times, we inform you that during the last three months (January the 1st – March the 31st 2016) Societatea de Asigurare-Reasigurare City Insurance S.A. has paid up claims totaling EURO 23 million. Also, for a total number of MTPL policies sold of 1,124 million, the 1,557 complaints against the company represent a minute percentage, of only 0.13% of the total number of Societatea de Asigurare-Reasigurare City Insurance S.A. clients.
6. In the shortest possible amount of time we will undertake all the legal actions in order to defend our interests, to cancel the abusive actions and measures of the Financial Supervisory Authority and to lower to a minimum their negative consequences.