March 4. 2024. 7:24

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Bulgarian insurer decries Romanian ‘attack’ as destabilising for region

Eurohold Bulgaria, a leading energy and financial group in Southeast Europe, said it had been the victim of an organised attack against its subsidiary in Romania, which has the potential to destabilise the entire region.

The Chairman of the Supervisory Board of Eurohold Bulgaria AD, Asen Hristov, said at the end of last week in an interview published in several Bulgarian media that he was the victim of extortion from the Romanian regulator of the insurance market.

Hristov said that Euroins, Eurohod’s subsidiary in Romania and the largest insurer in the neighbouring country, at the end of 2019 received an offer from Cristian Rosu, the head of the financial regulator ASF, to buy Citi Insurance, a Romanian insurance company. The offer was repeated several times.

Hristov said that City Insurance was bankrupt and therefore not worth a single lei, but after he rejected the offer, Euroins’ problems started.

“At first, I didn’t take it seriously, but after several meetings and pressure from Rosu, a meeting was arranged with one of the shareholders of City Insurance. At this meeting, I received an official proposal for Euroins to acquire City with the addition that we better agree because otherwise, we have no choice,” Hristov said.

According to Hristov, after he refused, a series of inspections and attacks began against Euroins, and the company was even placed under the temporary administration of the Insurance Guarantee Fund. The main reason was that the board members were not vetted as to whether they had the necessary qualities.

Hristov rejected this claim as absurd because the board members had been vetted before being re-elected eight months before but were told they had to do it again.

“We were told we have enough capacity to buy the City wallet for one lei. When I said that the company is not worth that much, I was told that we should think carefully and it is in the interest of both parties because otherwise, Euroins will be in trouble,” Hristov said.

He further explained that after his refusal, in February 2021, accusations started again, such as that Euroins had refused 6,000 insurance claims when he said it had paid 360,000 of them for the last three years.

“Inspection teams were at the Euroins office for 10 hours a day”, says Hristov, accusing the Romanian regulator of harassment.

EURACTIV approached ASF, the office of Cristian Rosu, on Monday (13 February), seeking their reply to the accusations levelled by Eurohold. Despite repeated attempts on Monday to reach Rosu on his mobile phone, through emails and SMS, no reaction came from the Romanian regulator.

Hristov also said that in 2022, the pressure on Euroins Romania continued for a variety of things. For example, he said the company was advised to pay several million lei extra for damages to the head of a national transport association, which in his words, was unjustified.

According to Hristov, the pressure has continued.

“This time, the scenario is as follows: to propose an assignee administration to the company, which is in an extremely good financial situation at the moment, to present the narrative that the society in Romania is being saved from a future problem, to attract a new shareholder in the company, close to City Insurance, as well as to cover up Rosu’s links to City,” he says.

Eurohold issued a statement, stating that the attacks against Euroins Romania, in which employees at the top and middle management level from the Romanian financial regulator ASF are involved, constitute actions “which threaten the financial stability of the company, of the entire insurance sector, and the economic stability of the state”.

The Bulgarian group also said that this attempt at destabilisation might threaten both countries’ accession to the EU’s passport-free Schengen area and Bulgaria’s accession to the eurozone.

The bids by Bulgaria and Romania to join Schengen were blocked by some of the EU countries in December, primarily because of rule-of-law concerns, but also, in Austria’s words, Bulgaria’s inability to properly protect the EU’s external borders.

“The campaign might consist of a quick seizure of the assets of the insurer, causing a liquidity crisis in the sector of major impact,” Eurohold wrote.

“This financial destabilisation could be transferred to Bulgaria and could have a negative impact on the membership of both countries in the Schengen area as well as the entry of Bulgaria into the eurozone despite the excellent bilateral relations between the two countries.”