The European Bank for Reconstruction and Development (EBRD) and Euroins Insurance Group (EIG) have put forward a proposal to Romania’s financial regulator Financial Supervisory Authority (ASF) intending to resolve the market disruption caused by the withdrawal of Euroins Romania’s operating licence.
The aim of this proposal is to find a solution that will not incur any extra expenses for policy holders or taxpayers with the intention to assist in resolving the issue, EBRD noted.
The EBRD, EIG, and ASF are currently engaged in constructive talks regarding the resolution proposal. The EBRD is in direct communication with all relevant parties to find a resolution to the market disturbance that resulted from the cancellation of Euroins Romania’s license, the bank noted.
The EBRD acknowledges the statement made by ASF on March 17, stating that Euroins Romania’s operating license was revoked due to deficiencies in corporate governance. This action was taken following the publication of a Permanent Capital Report (PCR) by ASF on February 2, which identified a capital deficit of more than €400 million.
In October 2021, the EBRD made a minority equity investment in EIG, which is the parent company of Euroins Romania. As a shareholder, the EBRD has been working with the board of EIG to enhance operations and performance, specifically in Romania.
After the release of the PCR, the EIG board, with the backing of the EBRD, hired a leading global actuarial expert to conduct an independent analysis of Euroins Romania. The analysis did not provide any justification for the EBRD to revise its belief that Euroins Romania was financially stable when its license was revoked, the bank said.
The EBRD has invested more than €10 billion in Romania as a long-term investor, and currently has a portfolio worth €2.5 billion, with investments of approximately €710 million in 2022. The EBRD is governed by over 70 countries, including Romania and the EU, and has a significant presence as an investor in Romania.
