May 24. 2024. 5:58

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Romanian politicians spar over purported increase of car insurance prices

After the Romanian press alerted on Thursday (9 March) of a price increase of 41% in compulsory third-party liability car insurance compared to 2022, politicians clashed, while the biggest insurer on the market, a Bulgarian company that feels targeted, said the crisis was artificial.

As Romanians reacted with shock at the reported news of the price increase, Prime Minister Nicolae Ciucă said he was waiting for the country’s financial regulator ASF to provide an explanation, including regarding the situation of Euroins, the largest insurer on the Romanian market, which is part of the Bulgarian financial group Eurohold.

Around 2.5 million Romanian car owners are insured with Euroins. According to press reports, it is unclear how the purported 41% will affect the different categories of drivers or to what extent the purported increase is linked to the Bulgarian insurer.

“There are two options: either it goes into insolvency, or it is recapitalised”, government sources were quoted as saying on Thursday, referring to Euroins.

The day before, the president of the Chamber of Deputies, Marcel Ciolacu, alluded to “announced bankruptcy” in the insurance sector, adding that he was convinced that the government would intervene, as it once did with the case of the bankruptcy of City Insurance.

Ciolacu, leader of the Romania social-democrat PSD, is expected to be Romania’s next prime minister, under an agreement reported by the Romanian press that will see Ciucă leave him his seat in May. Ciucă, leader of the National Liberal Party (PNL), took office in November 2021 under a power-sharing agreement with PSD.

Former Prime Minister Florin Cîţu reacted on Thursday to the statements, claiming that PSD leader Marcel Ciolacu must resign immediately and that “he has the duty to urgently tell the Romanians which company he was referring to when he said that an ‘announced bankruptcy’ is coming on the insurance market in Romania”.

Cîţu is a former leader of PNL at crosshairs with Ciucă, who took his job as party leader.

“If he has such information, he cannot let Romanians buy insurance policies from a company he knows will be bankrupt. Such statements from an official with access to confidential information are immediately followed by a resignation in any civilised country”, said Cîţu, now a PNL senator.

The Bulgarian company reacts

Eurohold, the mother company of Euroins, reacted on Friday with a communiqué widely quoted in the Romanian press, in which it refutes allegations of financial instability and says that they feel targeted “by a few people”.

Kiril Boshov, Chairman of the Management Board of Eurohold, is quoted as saying that it would be a “wise decision” for insurers in Romania to refrain from increasing prices without a valid reason and warns against “the attitude of some people and media, who trigger artificial debates on the market, which may lead to an economic crisis without real grounds”.