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BSR exercise in the Romanian insurance market

București, March 13, 2020 – The Board of the Financial Supervisory Authority (ASF) has approved, in its meeting on March 11, 2020, the performance of an assessment of the assets and liabilities - BSR (Balance Sheet Review) of the entire Romanian insurance sector. The exercise will be implemented in the second half of this year by the ASF and the European Insurance and Occupational Pensions Authority (EIOPA).

The ASF Board has also approved the conditions and the criteria based on which the results of the BSR will lead to the adoption of follow-up measures applicable to the insurance companies, after the completion of the exercise.

The cut-off date for the balance sheet data used in this exercise will be March 31, 2020.

In addition to the assessment of the assets and liabilities of insurance companies, the BSR exercise includes the assessment of the technical reserves` level, of the aspects regarding governance and of the prudential parameters.

The assessment will provide an additional degree of clarity on the financial situation and the solvency of the participating insurance companies and on their risks.

A Steering Committee, composed of ASF and EIOPA representatives, will be responsible for overseeing the exercise. ASF will select, in consultation with the Steering Committee, following a public procurement procedure, a consultancy firm with a high professional reputation and international experience, which will ensure a harmonized application of the methodology by the independent external evaluators (auditors). The designated consultant shall not be one of the auditors of the companies participating in the BSR exercise.

ASF will approve a list of eligible auditors, after consulting the Steering Committee. Each insurance company will select an auditor from this list that will carry out the assessment in accordance with the methodology approved by ASF, following the consultation with the Steering Committee.

After the completion of the BSR exercise, based on the results of the assessment and the calculation / analysis of the prudential indicators, which include the reconsideration of an adequate level of technical reserves and assets, the participating companies will be classified and will be subject to differentiated remedial measures. The remedial measures requested by ASF to the participating insurance companies depend on the magnitude of the capital deficit resulting from the evaluation exercise, without prejudice to the adjustments made following the measures taken after the reference date.

The follow-up measures can be consulted on the ASF website HERE.