Astra's Adamescu: We shall sue over ASF's shocking and irresponsible decision

 •  English
83 views

The Financial Supervisory Authority (ASF) broke its own rule when deciding that Astra Asigurari insurance company should be placed under special administration, Astra owner Dan Adamescu said.

He announced he would sue ASF over its shocking and irresponsible decision.

"According to the Romanian legislation, there are specific steps that should be taken in such situations. Following the talks we held with ASF, they should have requested us to increase our capital, according to the ASF rules. But ASF skipped its own rules. We are shocked by ASF's decision, it's unbelievable, nowhere in the world such a situation occurred, a regulator to make a decision without following the steps stipulated by the law. I cannot predict the consequences of this act, but it's shocking and irresponsible. The regulator should take action in a decent and confidential manner, because this is the specificity of the market, but they dropped a bombshell. They don't realize the real impact of this decision. No one knows how serious the damage is," Dan Adamescu said.

He pointed out that Astra has 2.6 million insured, and if the clients and partners lose confidence in the company, Astra will die out.

Adamescu claimed that "all this terror" started in the autumn of 2013, when Astra purchased Axa Romania, the branch of the world's largest insurance company. "Axa invited us, the Vienna Insurance Group and Aegon, the biggest insurance company in the Netherlands, to make an offer, and we won. It was a major achievement for Astra and for Romania," Adamescu said.

He pointed out that if the taking over of Axa had been given the green light, Astra's capital would have surged by 35 million euros.

"ASF has not yet approved the contract on taking over Axa. This take-over would have solved all issues of Astra, but there was no intention in this regard," said the Astra owner.

As for the protection of the insured, he said the company's clients run no risks.

"ASF has an insurance fund, if it's not enough, all players have to cover these amounts, and in the end the state has to pay. The insured run no risk," Adamescu underscored.

He also announced that Astra submitted a plan of measures in December 2013 stipulating the hike of capital by 140 million lei, but no talks were held on this topic, not even with ASF.

ASF decided to launch the procedure of financial recovery through special administration at company Astra Asigurari, the largest company in the insurance industry on the Romanian market, ASF president Dan Radu Rusanu told a press conference.

ASF made the decision after having conducted an analysis of the control report at Astra and of a note drawn up by the Financial Stability and Supervision Direction within ASF.

The Authority appointed the financial consultancy company KPMG Advisory as Astra's special administrator. According to the calculations of ASF, which will be put at the special administrator's disposal, Astra will need a significant capital hike, with the amount to be decided by KPMG Advisory.

Dan Radu Rusanu said that all insurance policies issued by Astra would remain valid until the expiration date.

The special administrator will be obliged to make sure all obligations with regard to insurance coverage are met, but in case of a serious disaster, such as a very strong earthquake, Astra would not be able to pay for all losses, according to Rusanu.

Astra's portfolio numbers about 3 million clients, with 800,000 being RCA (the mandatory driving civil liability insurance ) insured, and 2.15 million clients sealed property insurance policies.

The ASF president said that Astra underwent no control from the former Insurance Supervisory Commission (CSA) and that the former head of this institution, Daniel Tudor, has acted protectively. According to Rusanu, the measure of the special administration should have been taken as early as 2013 by CSA.

"Most likely Daniel Tudor will have to provide many explanations for having protected Astra," he stressed.

Over the last three years, Astra granted intra-group loans worth 110 million lei, out of which 102 million lei (over 90 percent) went to Media Holding Company, the owner of the Romania libera daily.

"We shall try to find out who the beneficiaries of these loans are and why they have not been returned," Rusanu pointed out.

Astra Asigurari has been operating on the Romanian market for over two decades. A spin-off in 1991 of the former State Insurance Administration (ADAS), the giant of the insurance industry held by the Romanian State before 1990, Astra underwent deep transformation. The company opened two branches outside Romania, one in Hungary at end-2010 and the other in Slovakia in December 2012.AGERPRES

Keywords:

Leave a comment


Recommended news