January 6, 2022 – The Financial Supervisory Authority of Romania (ASF), together with the European Insurance and Occupational Pensions Authority (EIOPA), announce the results of the Balance Sheet Review of the Romanian insurance sector. The review assessed the appropriateness of the system of governance and of the financial and solvency position of the Romanian insurers.
The Balance Sheet Review covered 24 Romanian insurance undertakings, with the reference date of 30 June 2020 and resulted in a significant decrease of the aggregated prudential solvency requirements compared with the ratios reported at the reference date. The aggregated Solvency Capital Requirement (SCR) ratio after the Balance Sheet Review is 99% (decreased from 179%) and the aggregated Minimum Capital Requirement (MCR) ratio is 259% (decreased from 436%).
These results include City Insurance S.A. (City), which was still operating in the Romanian insurance market at the reference date. City had its authorization to pursue insurance activities withdrawn on 16 September 2021. Without City, the review would result in an aggregated SCR of 141% and aggregated MCR of 351%, representing a decrease of the SCR and MCR of respectively 37,6pp and 80pp compared with the ratios reported at the reference date.
The Balance Sheet Review was carried out by independent external reviewers based on a detailed methodology developed for the purposes of the exercise. The exercise was overseen by a Steering Committee composed by representatives of the ASF and EIOPA with the support of a consultant team comprising representatives of both authorities.
The exercise provided insight into the risks and vulnerabilities of the Romanian insurance sector as of June 30, 2020. The insurance undertakings will be expected to take actions to address the findings of this exercise including submitting plans aimed at correcting governance deficiencies and strengthening the system of governance. The remedial actions required by ASF shall consider the subsequent events after the reference date.
The report is available here