Bucharest, 2 May, 2022 - The Financial Supervisory Authority (A.S.F.) draws attention to the fact that the RCA policies issued by City Insurance cease by right on 11 May, 2022, even if their validity period exceeds the mentioned date.
The Bucharest Court admitted the application for the opening of bankruptcy proceedings filed by A.S.F. on behalf of SAR City Insurance S.A. on 9 February 2022, and according to Law no. 85/2014 on insolvency prevention and insolvency proceedings, Article 262 "within 90 days from the date of the pronouncement of the decision to open bankruptcy proceedings, the insurance policies concluded by the insurance/reinsurance company shall terminate by operation of law; under the same conditions, reinsurance contracts shall also be terminated".
In view of the above, holders of RCA policies issued by City Insurance must take out new insurance with another insurer by 11 May 2022. Failure to do so will render them liable to penalties in accordance with the laws in force. The fine for not having a RCA insurance is between 1,000 and 2,000 lei. Under the Road Traffic Code, the police may decide, as additional measures, to withhold the car registration certificate or the number plates.
City Insurance customers whose insurance contracts are automatically terminated on 11 May 2022 may request a refund of the part of the insurance premium proportionate to the remaining period of validity. For example, if the policy was taken out for a period of one year and expires on 11 September 2022, the customer is entitled to claim back one third of the premium paid (in proportion to the 4 months out of 12 remaining in force). City Insurance customers can also request the return of part of the premium before the 11 May deadline if they decide to cancel the policy of their own accord. Full details of this procedure and the necessary documents can be found HERE.
Persons involved as injured parties in accidents caused by City Insurance RCA policyholders who have not purchased a new policy after 11 May 2022 will not be able to be compensated under the City Insurance policy, even if the data on the policy shows that it is still valid. Injured third parties can apply to the Romanian Motor Insurers' Bureau (BAAR) for compensation from the Street Victims Protection Fund (FPVS) only if the accident also involved personal injury or death. Full details of the BAAR compensation procedure are available HERE. Otherwise, injured third parties have no recourse to any body or insurer and will have to claim against the at-fault driver for recovery of damages.
According to the Policyholder Guarantee Fund (FGA), 498,255 RCA policies issued by City Insurance will still be in force on 11 May 2022, when the automatic cancellation of insurance contracts occurs.