The Government has decided to intervene in the RCA issue with an emergency ordinance that would stipulate, among others, the freezing of the tariffs of insurance bonuses for a period of six months, Premier Dacian Ciolos announced on Wednesday morning. He added that the ordinance will also stipulate the possibility of contracting the RCA for one month, but also that the RCA would be suspended in case the vehicle’s owner has his license suspended or the vehicle is impounded.
The leadership of the Financial Supervisory Authority (ASF) was heard on Wednesday within Parliament’s joint Budget-Finance Commissions, following the dissatisfactions with the current level of RCA tariffs. During the hearings, several members of the commissions asked the ASF leadership to resign. MPs Andreea Paul (PNL), Catalin Radulescu (PSD), Alexandru Nazare (PNL) and Adrian Gurzau were among them.
Previously, transport sector employers’ associations – UNTRR, COTAR, APTE 2002, FORT, ARTRI, APULUM – asked Parliament to immediately sack ASF President Misu Negritoiu for the poor management of the Romanian insurance market. Freighters’ representatives state that the ASF President ignored the road freight industry – which represents 5 percent of GDP and on which 500,000 Romanians depend –, bringing it on the verge of bankruptcy after he took not decision to solve the situation following dozens of meetings with the transport sector employers’ associations.
Freighters met Government and Competition Council representatives on Wednesday morning, their most important request concerning the reference price of the mandatory civil insurance.
“In the talks at the Government, we agreed that the Emergency Ordinance will include the stipulation concerning the freezing of the reference tariff of RCA bonuses over a period of six months, with the possibility of extending that period by another three months. If this appears in the Ordinance, we will discuss and inform you about what we will do next. We are talking about freezing the value of the RCA damages claims. We cannot give an answer regarding the protest, but, in principle, we can postpone tomorrow’s (Thursday’s – editor’s note) protest. Overall, we have won a good thing both for citizens and freighters. I repeat, we will take a final decision after 10 a.m., in order to see the changes brought by the Emergency Ordinance,” said Vasile Stefanescu, President of the Confederation of Authorised Romanian Freighters (COTAR).
On the other hand, he is asking for the resignation of the Financial Supervisory Authority (ASF), stating that it is to blame for the current situation.
In his turn, Augustin Hagiu, President of the Federation of Romanian Freighters (FORT), pointed out that a decision on postponing the September 15 protest will be taken after a discussion with the Federation’s local members.
The RCA insurance could feature a minimum damages cap of EUR 5 M for bodily harm and death, including for non-patrimonial damage incurred in one and the same accident, regardless of the number of persons to be paid damages, according to a draft emergency ordinance on the mandatory civil responsibility insurance for damage caused to third parties through car accidents, an ordinance published on the Finance Ministry’s (MFP) website at the end of last week.
“The current normative act regulates the minimum limits covered by the RCA insurance, in line with European Union regulations. For material damage caused in the same accident, regardless of the number of persons to be paid damages, the cap is established at EUR 1,000,000 for accidents. For bodily harm and deaths, including non-patrimonial damage caused in the same accident, regardless of the number of persons paid damages, the cap is established at EUR 5,000,000 for accidents,” the document reads.
The caps are revised every 5 years, in relation to the evolution of the European Consumer Price Index (ECPI) established in line with Regulation (EC) no.2,494/95 on the harmonized indexes of consumer prices, and are stipulated in the Financial Supervisory Authority’s regulations.
According to the document, the transposition of European regulations within national legislation expands the insurers’ room for action and intervention in what concerns insurance bonuses, given the introduction of a national price control system. There is no situation in which interventions can be made on the bonuses in the absence of this provision.
Negritoiu: ASF lacks prerogatives to control insurance sector prices
The Financial Supervisory Authority (ASF) lack the prerogatives to introduce a price control system in the insurance sector, the institution being the first to propose the introduction of the reference tariff, ASF President Misu Negritoiu stated on Wednesday at the end of the hearings within Parliament’s Budget-Finance commissions.
“Someone will succeed me, but I don’t know when. I was not the topic of these hearings, and you’ve heard the conclusions from the chairman of the budget commission, presented as such. I am very pleased with my activity. Had ASF had the levers with which to intervene on the market, then there would no longer have been a need for the Emergency Ordinance proposed by the Government. Otherwise it’s not our prerogative to introduce a national price control system. European legislation stipulates this, but ASF is not the one that has to do it in Romania. I had talks with Government members on the reference price. We proposed this reference tariff from the start, we were the first. We sent the draft bill containing this proposal as early as March and we asked for an emergency procedure over this topic. We are all to blame for this situation. We could have done better, but this doesn’t mean we didn’t do what had to be done,” Negritoiu said.
According to the ASF President, the institution “supervises an insurance marked that is on an upward trend, which has become financially balanced, which is healthier,” and “what is happening now on the market is the effect of liberalising the RCA tariffs, as a result of Romania’s accession to the European Union.”
RCA law, adopted in Senate
On Tuesday, the Senate adopted – with 73 votes in favour, 8 against and 13 abstentions – the draft bill on the mandatory civil responsibility insurance for damage caused to third parties through car accidents. The plenum thus adopted the Budget Commission’s favourable report, which included amendments to the bill.
Budget Commission Chairman Viorel Arcas stated that so far no legislative framework regulates the RCA contract and the main modifications consist of the introduction of the reference tariff and the setting up of a state-owned company that would ensure a competitive market. The task to set the reference tariff for the RCA belongs to the ASF, and all insurance companies have to respect it.
“The main modification is that reference tariff, several modifications ensue from there, the way the tariff is established, the tasking of the ASF with establishing a reference tariff that will put a cap on RCA tariff hikes. The second [modification] is the task given to the Government to set up, within a certain deadline, a company or to create an activity within state-owned companies – such as Eximbank – that would conclude such insurances. When it enters the market, the competition will be different. Of course, while making sure a profit is earned or without earning a profit but covering the costs, because the purpose of state-owned companies is not making a profit, they have to ensure the well-being of the population. At any rate, the result will be a far healthier competitive environment. At this moment we only have private operators and almost all of them are foreign, the state doesn’t have,” Arcas stated.