Insurance companies, threatened with suspension

Insurance Supervisory Commission announces investigations at the insurance companies required by customers for various irregularities, deficiencies in finding damages, delays in payment of compensation or refusal to pay damages.

The Commission President has warned the insurers that their activity may even be suspended if they put the commercial interest before the insured interest.

Companies that have registered increases in the number of complaints in the first five months of the year have already been sanctioned with fines of 80,000 lei.

The Chairman of the Insurance Supervisory Commission, Constantin Buzoianu, has warned companies to have primarily regard the protection of the insured interests, not only gaining revenue and market share at any price.

He added that in the first five months of this year the number of petitions submitted to the CSA has skyrocketed from some companies, customer complaints relating to delays in the damages payment, finding them defective and non-payment.

The President noted that CSA has already been fined five heads of insurance companies and that the institution he runs also triggered a series of control actions at other companies in connection with the most complaints.

Depending on the result of these checks, if irregularities are found, the penalties can reach, in very serious cases, to the temporary suspension of activity of the companies concerned.

Constantin Buzoianu has also stated that increasing in the number of petitions submitted by customers comes in the context of reviews in the first three months of this year, volume of purchasing and administration expenses, plus claims paid and reserves held in exceed the level of the premiums charged by insurance companies.

Insurance-"too expensive for customers, too cheap for insurers'

According to the data presented in the Conference, the insurance market in Romania registered a slight increase, 0.35 per cent in the first quarter of 2012, but insurers are facing a series of important issues, as stated the President of the National Union of Insurance and Reinsurance Companies in our country, Rangam Bir.

Among them, the fact that non-life insurance are currently too expensive for customers and too cheap for insurers, that reservations for damage insurance have more than doubled in the past five years while revenues stagnated and that the depreciation of the national currency(Leu) has a negative impact on the insurance business.

Rangam Bir says that an element that could have a positive impact on the insurance market would be the introduction of the deductibility tax for life insurance and health.

Incidentally, the latter is a separate segment, in the field of health trying for more time to find a system that can provide cost recovery.

Vasile Cepoi, Minister of Health, present at the event today, noted that the financial health of the settlement cannot be achieved only through income growth, which would mean increasing the contribution to health and social security, which is unlikely, or by reducing expenditures by resizing the package of basic medical services that may be offered by the State.

In his opinion, the main problems to be solved by the new law, to be completed by the end of this month, are bound by the monopoly exercised by the agency, the Finance Ministry monopoly on the collection and allocation of funds for the health system, mandatory public insurer to conclude contracts with all health providers and locking of the voluntary insurance system because the package of basic medical services and fiscal constraints in the deductibility field of health insurance.

Translated by Denisse-Meda Bucura
MTTLC, Bucharest University