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The Status of petitions filed with ASF in 2014


Bucharest, 2 March 2015
– Last year, the Financial Supervisory Authority (ASF) received a total of 21,349 petitions, of which 92.88% were filed in the insurance-reinsurance sector (19,828), 4.41% in the private pensions sector (941) and 2.72% in the financial investment and instruments sector (580).

Petitions filed in the insurance-reinsurance sector

Last year, ASF received a total of 19,828 petitions, of which 12,696 petitions submitted by policyholders/prejudiced parties were uniquely registered by petitioner, analysed and settled. The aggregate number of the petitions also includes: requests sent by car repair service units, reiterations/supplementations to petitions already reviewed, requests which do not fall within the competence of ASF, requests relating to the object of activity of other specialized directorates within ASF and which were delivered to them, etc.

The analysis of the data reported to ASF by insurance undertakings revealed that the 12,696 petitions analysed and resolved uniquely by petitioner in 2014 represent 1.5% of the total number of outstanding claims reported by the insurers (847,296) and 0.08% of the total number of insurance contracts in force at the end of 2014 (15,264,827).

The analysis of the petitions settled between 2011 and 2014 reveals that they increased steadily between 2011 and 2013, dropping last year by 5.78%

What petitioners reported

The most frequent aspects reported by petitioners in 2014 were the failure to pay/partial payment of compensation/surrender values requested by policyholders/prejudiced parties (12,073 cases), representing 95% of the total. Other issues notified included requests for recalculation of the compensation and non-compliance with contractual conditions/RCA rules.

Of 12,073 petitions reporting the failure to pay the compensation, 8,995 cases were resolved favourably to petitioners, representing 75% of the total, as follows: by full payment (64% of the total) or partial payment (11% of total) of the compensation requested.

Petitions by insurance classes

In 2014, the largest share was held by the petitions filed in the non-life insurance class, i.e. 12,512, representing 98.55% of the total. They recorded a fall of 5.89% as compared to 2013.

Within the category of non-life insurance, a major share was held by petitions filed in the RCA compulsory insurance against civil liability in respect of the use of vehicles and Green Card class, i.e. 8,990, representing 70.81% of the total of 2014, down by 2.78% as compared to 2013.

In the RCA compulsory insurance and Green Card segment, the 8,990 petitions filed and settled in 2014 represent approximately 0.13% of the number of RCA contracts concluded (7,141,909) and 3.30% of the number of RCA loss files reported (271,892), according to the data reported to ASF by insurers.

How petitions were settled

Of 12,696 petitions uniquely registered by petitioner, 9,316 petitions representing 73.38% of the total of 2014 were settled in favor of petitioners, up by 3.77% as compared to the previous year.

Most reported insurance undertakings

The analysis of the petitions received for the top ten insurance undertakings for which most petitions were filed with ASF reveals that, except for City Insurance SA and Allianz-Țiriac SA, that recorded increases in the number of petitions with 36.58% and 22.37%, the other insurance undertakings recorded decreases of the number of petitions in 2014. Over the period under review, Euroins SA (33.62%) and Astra SA (24.64%) recorded together 58.26% of the total number of petitions filed with ASF.

Top ten insurance undertakings in respect of which most petitions were filed in 2014 as compared to 2013

No.

Insurance undertaking/broker

Petitions filed in 2013

% of TOTAL year 2013

Petitions filed in 2014

% of TOTAL year 2014

Increase/ decrease % in 2014 as compared to 2013

1

Euroins SA

4,280

31.76

4,269

33.62

-0.26

2

Astra SA

3,358

24.92

3,128

24.64

-6.85

3

Uniqa Asigurări SA

991

7.35

974

7.67

-1.72

4

City Insurance SA

626

4.65

855

6.73

36.58

5

Omniasig VIG SA

1,372

10.18

815

6.42

-40.60

6

Asirom VIG SA

835

6.20

738

5.81

-11.62

7

Carpatica Asig SA

666

4.94

637

5.02

-4.35

8

Allianz -Țiriac SA

371

2.75

454

3.58

22.37

9

Groupama SA

335

2.49

239

1.88

-28.66

10

Generali Romania SA

202

1.50

166

1.31

-17.82

 

Other insurance undertakings/brokers

439

3.26

421

3.32

-4.10

 

TOTAL

13,475

100.00

12,696

100.00

-5.78

Petitions sent in the private pensions sector

In 2014, ASF received a total of 941 notifications. The analysis of the number of petitions filed and settled between 2012 and 2014 reveals that they have fallen consistently over 20% per year.

The analysis of the data recorded at ASF reveals that in 2014, 97.56% petitions for Pillar II were filed in the private pensions system, while the petitions submitted by the participants who joined a voluntary pension fund (Pillar III) represents 2.44% of the total number of petitions filed.

With regard to the petitions sent by the participants in Pillar II, those requiring information on the membership of privately managed pension funds and those relating to the random distribution represented a significant share, i.e. 49.62%.

With regard to the petitions sent by the participants in Pillar III, most of them referred to requests for information relating to the deductibility of contributions to voluntary pensions, i.e. 43.48% of the total.

Petitions filed in the financial investment and instruments sector

In 2014, ASF received 580 petitions , statements and requests for information for settlement purposes, structured by type of entities and by type of operations.

The analysis of the petitions made by reference to reported entities reveals that most of the petitions were filed for issuers – 37.41%, and then for intermediaries (investment firms – SSIFs – or investment firms of Member States – 32.24%).

Of the total of 87 letters relating to the theft of shares, a number of 85 letters (notifications and information, requests for hearing) were filed by former clients of SSIF Harinvest SA. Also, 79 requests referring to holdings of shares or sales without consent were filed.

Unfair practices relating to the three supervised sectors

The centralisation and analysis of the filed petitions identified for each of the three sectors a number of deficiencies or unfair, abusive or deceptive practices used by the entities operating or interacting (but are not supervised by ASF) with them in some situations in relation to consumers.

Insurance-reinsurance sector

Insurers

  • failure to pay within the legal/contractual time limits the compensation due to prejudiced parties/policyholders;
  • deficiencies in the application of the legal provisions in establishing the maximum amount of compensation in the case of total damages (RCA);
  • failure to timely inform the prejudiced party that the damage suffered by the vehicle in question falls within a major damage case;
  • failure to send the offer for compensation to the prejudiced party within the legal time limit;
  • failure to mention in the initial minutes establishing the damages all parts damaged at the same event;
  • failure to fully inform, when concluding the contract, of the existence of certain contractual clauses in the case of voluntary insurance which could result in the decrease of the compensation or classification of the event in the category of insurance exclusions.

Car repair service units

  • issuance of repair estimates, which include hourly labour rates up to 5 times higher than those charged by the repair units of the car trademark in question;
  • installation of after-market or second-hand parts on the repaired vehicles and the request, through the repair estimates, of the costs associated with new original parts;
  • introduction of additional operations in the repair estimate by reference to the note establishing the damages;
  • issuance of several repair estimates by the same repair service unit in the same loss file, the amount of the repair getting increased for the same operations;
  • intervention in the program in which the estimate was made, unjustifiably increasing the damage;
  • interposition between the consumer and the entity/ASF in filing petitions, artificially increasing the amount of the compensation, causing delays and partial payments to the detriment of the consumer.

Private pensions sector

Marketing agents

  • false accession of certain persons to the private pensions sector (eligible or non-eligible persons for Pillar II);
  • false use of certain personal data of certain eligible or non-eligible persons in the system;
  • conclusion of individual acts of accession to a private pension fund, offering inadequate, incomplete and incorrect information about the private pension system to the potential participant in the system.

Financial investment and instruments sector

Issuers

  • breach of minority shareholders’ rights by failing to comply with the transparency obligations, by failing to apply the cumulative voting method when electing the members of the board of administration, by failing to grant the right of withdrawal from the undertaking;
  • breach of the legal provisions concerning the call of the General Meeting of Shareholders, by failing to convene GSM at the request of certain shareholders with a specific holding in the share capital of the undertaking, in violation of the legal provisions relating to filling in the call

Intermediaries

  • fraudulent sale of the equity portfolio held and the impossibility of recovery by the clients of the amounts which belonged to them;
  • breach of the obligation laid down in the subscription form for payment;
  • making unauthorised transactions;
  • carrying out transactions and operations on online platforms (Forex type transactions) by entities that are not authorised by ASF

Petitions entirely managed and proactive measures as of 1 January 2015

Further to the institutional reconstruction process, the Consumer Protection Directorate was established at the level of ASF as of 1 January 2015. Its main objective is, at an integrated level, the protection of the rights and interests of consumers of non-banking financial products on the three supervised markets. Petitions shall be settled by the Petitions Department within such directorate. In addition to the reactive activity of managing petitions, the new directorate has a component for monitoring unfair, abusive or deceptive practices affecting consumers. Also, the Directorate forwards proposals for measures to the supervisory, control and regulatory directorates, and shall draw up information, alerts and educational materials for consumers of financial services

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About ASF

The Financial Supervisory Authority (ASF) is the institution that authorises, regulates, supervises and controls the entities operating on the non-banking financial market in Romania.

Established in 2013 through assuming and reorganising all powers and prerogatives of the National Securities Commission (CNVM), Insurance Supervisory Commission (CSA) and Private Pension System Supervisory Commission (CSSPP), ASF contributes to strengthening an integrated operational and supervisory frame on three markets amounting to more than 10 million participants.