Competition Council fines insurance companies
The Competition Council has applied fines for civil liability insurance companies.
Daniela Budu, 05.12.2018, 13:47
Nine insurance companies in Romania were handed a total of 53 million Euros in fines by the Competition Council for steering the market together so as to increase the prices of the mandatory civil liability insurance for car owners. In addition, the National Union of Insurance and Reinsurance Companies in Romania was given a 35-thousand Euro fine. Competition Council President, Bogdan Chiritoiu, told Radio Romania that the fines were applied for the companies’ activity in the 2012-2016 period.
Bogdan Chiritoiu: “Given the crisis on the civil liability insurance market, companies worked together to have prices increased. This is illegal and unfair. At present, things are back to normal and under control, prices have stabilized. We have even seen some drops in civil liability insurances for certain categories of vehicles. Apart from our investigation, the Regulatory Authority also got involved and took action more firmly than before, given that the legislation was changed in 2016 and the system improved”.
Part of the companies that were handed fines said they would appeal the Council’s decision in court. The Financial Supervisory Authority has taken the fines under advisement and has given assurances it will continue to check the need to modify the current legislative framework, to make sure it responds to the needs of the insurance sector. We recall that this summer the Authority carried out unannounced checks and handed warnings in writing to two insurance companies regarding their management of prices for civil liability insurances, forcing them to correct all the irregularities they identified at the time.
Moreover, the Financial Supervisory Authority also says that the share of revenues from the sale of civil liability insurances continues to rank first at market level and has grown to 1.6 billion Euros in the first nine months of the year, slightly higher than the same period last year. Car insurances account for approximately 73% of the total gross insurance premiums for general insurances and nearly half of the total gross insurance premiums that companies have contracted in the aforementioned period. Additionally, the total value of gross civil liability insurance premiums last year stood at over 897 million Euros, by 29% more than the previous year, against the backdrop of an increase in the average premium.
