Only one insurance company in Romania able to cover earthquake damages and only four able to cover damages arising from major flooding

According to the Financial Supervision Authority (FSA), a recent stress test (balance sheet review — BSR) has shown that a number of Romanian insurance companies need to act quickly in order to consolidate their finances and remain solvent.

Evaluation of assets and liabilities has revealed an aggregate capital shortfall of RON 1.6 billion (approximately EUR 356 million), within the Solvency I prudential framework, concentrated in four companies with negative equity: Astra, Carpatica, Euroins and Exim, which fail to meet minimum guarantee fund requirements, while a further two companies, Groupama and Asirom, do not have adequate solvency margins. Under this year’s agreed supervisory guidelines published on the FSA website on 18 February 2015, two of the four undercapitalised companies have been called on submit an action plan to the FSA, by 4 August 2015.

What view does the Commission take of the fact that only one insurance company in Romania is able to cover earthquake damages, while only four are able to cover damages arising from major flooding?