Approximately 2.8 million Romanians who have RCA car insurance valid at Euroins, as well as the injured parties of the RCA leader whom ASF decided to file for bankruptcy in court, will be able to immediately request the refund of premiums and the payment of damages from the Guarantee Fund of To the Insured (FGA), after the publication of the ASF decision in the Official Gazette. However, payments can be made within the limit of 500,000 lei per insurance contract.
Accident in BucharestPhoto: Inquam Photos / Eduard Vînatoru
At the end of January 2023, Euroins Romania had 2.76 million active RCA policies, according to HotNews.ro information.
What to do if you are a Euroins customer or victim
The first legal step after the announcement made by ASF on Friday, is that the supervisory authority’s decision be published in the Official Gazette.
Immediately after this moment, all Euroins customers and injured parties will have a period of 60 days in which the Insured Guarantee Fund (FGA) can make payments to customers (who want to be refunded the rest of the RCA premium already paid) or RCA damages of this company, within the limit of 500,000 lei per insurance contract.
All Romanians who have valid policies at Euroins have two options:
- 1. they can keep their insurance until the expiry date or
- 2. they can denounce them and conclude contracts with an insurer without problems.
However, the most affected will be the injured parties, those hit in traffic by a car insured with Euroins, because many services will no longer make repairs on these policies and all compensation from this insurer will be paid only after the court declares its bankruptcy definitively .
The RCA policies of Euroins will remain in force until the court decides to open the bankruptcy procedure of Euroins. After this decision is given in court, the immediate effect is that within 90 days, all Euroins policies will cease to exist.
Guide for Euroins policyholders and claimants:
In the bankruptcy of City Insurance, the FGA made a guide with everything you need to know if you are a customer or a damaged party, which is also valid in the Euroins situation as follows:
- a) If you have an insurance policy issued by CITY Insurance
Your insurance policy remains valid, producing its effects.
However, you can cancel the policy at any time and conclude a new one with another authorized insurer. If you cancel the policy and you had no claims during the period of validity until the cancellation, for the unexpired period you have the right to recover the difference in the premium from the FGA – Insured Guarantee Fund following the procedure mentioned in letter b) point (ii) From lower.
CAREFUL! Your insurance policy remains valid, according to the legal provisions, until 90 days at the latest after the final decision to open the bankruptcy procedure. This means that, if the validity of the policy entered in the insurance document exceeds the previously mentioned term, you will no longer be insured.
The above specifications are also valid for the situation in which you have an RCA insurance policy issued by Euroins. Therefore, you can drive on public roads, and in case of traffic checks by the authorized bodies, you will not be sanctioned, your RCA policy being valid. In short, you are still insured, of course taking into account the warning above.
Also, if you are guilty of causing a road accident resulting in material damage and/or bodily injury, the damaged third party will be compensated under this policy within the limits established by Law 213/2015 on the Insured’s Guarantee Fund, respectively 450,000 lei and by registering with the credit table in the bankruptcy procedure that will be resolved in the first instance by the Bucharest Court, and in the appeal phase by the Bucharest Court of Appeal.
- b) If you are the victim of a road accident caused by a driver using a vehicle insured through an RCA policy issued by Euroins:
(i) If you have not yet approved the claim at Euroins, you have the right to do so by addressing the Insureds’ Guarantee Fund at the latest until the date of termination of the RCA policy by the insured, but no more than 90 days from the date of the pronouncement of the decision to open the bankruptcy procedure;
(ii) In order to collect the allowances/compensations, you will be able to submit a motivated payment request accompanied by supporting documents, starting with the publication date of the ASF decision to withdraw the authorization for Euroins in the Official Gazette and up to a maximum of 90 days from the definitive stay of the decision to open the bankruptcy procedure or from the date of birth of the right to claim, when it was born later.
FGA has the right to start paying the amounts due to insurance creditors (insureds, beneficiaries, third party victims) from the date of finalization of the decision to open bankruptcy proceedings against Euroins.
These proposed provisions aim at the additional protection of damages in case of insolvency of an insurer.
(iii) Regardless of whether or not you have addressed the FGA in order to collect the compensation, you have the right to file a request for the admission of the claim (alleged compensation) within the bankruptcy procedure within the deadlines and following the instructions of the judicial liquidator who will be appointed by the Bucharest Court. You should know that, to the extent that you have collected amounts from the FGA, they will be deducted in the bankruptcy procedure from the amounts that you may still be entitled to receive.
Context information
Romania is one of the countries in the European Union that benefits from a safety net for policyholders in the event of the bankruptcy of an insurance company: FGA – Insurance Guarantee Fund.
The fund, as a guarantee solution in the field of insurance, aims to protect insurance creditors from the consequences of the insolvency of an insurer entered into bankruptcy proceedings.
The main destination of the amounts available to the FGA is the payment to insurance creditors of the indemnities/compensations resulting from the optional and mandatory insurance contracts concluded under the terms of the law and the premiums owed by the insurer for the period in which the risk was not covered by it, as a result of the termination of insurance contracts, in compliance with the guarantee ceiling provided by law.”