The European Insurance and Occupational Pensions Authority’s (EIOPA) review of Euroins Romania estimates that the insurer had a shortfall of €550 million to €581 million in its motor third-party liability (MTPL) reserves as of September 2022, but the report itself shows limits in how that figure was reached.
At the centre of the issue is how the assessment was carried out. EIOPA relied on “data reported by Euroins Romania to the ASF,” noting that it “had no access to the ASF’s permanent control report and adjustments, in order to ensure full objectivity and impartiality.” Euroins was not included in the process and was not asked to submit its own data.
That limitation becomes clearer in how the report treats claims handling. In Romania, insurers face penalties of 0.02% per day for delayed claims - roughly 73% annually - making settlement speed a key factor in liabilities. Euroins had reduced its average settlement time from 35 days in 2021 to about seven days by early 2023, significantly lowering the number of outstanding claims. However, the data used in the assessment did not reflect this shift, meaning the reduction in penalty exposure was not included.
The report acknowledges that this could translate to “potential savings of tens of millions of euros” that were left out of the calculation.
A similar issue appears in the treatment of reinsurance. Euroins had long relied on quota share contracts, a common risk-sharing arrangement that had been reviewed and accepted by both ASF and EIOPA in 2021. Shortly before regulatory action was taken in 2023, ASF changed its position and determined that these contracts no longer met its requirements.
Euroins moved quickly to adjust, placing a new reinsurance contract within its group and planning to transfer the risk to international reinsurers within a month. These steps, however, do not appear to have been reflected in the data used for EIOPA’s assessment. The report notes that the regulatory shift was carried into the analysis without discussion of its impact, which in turn affected how assets were valued. It adds that this may have led to an undervaluation of between €250 and €300 million.
The estimated shortfall also differs from earlier findings by ASF, including its own previous reviews and a control report issued in February 2023. Since Euroins Romania’s licence was revoked, claims have been paid through Romania’s Insurance Guarantee Fund, with payouts tracking closer to the company’s own projections than to EIOPA’s estimates.
These differences stem from a dispute that goes back to 2019, when ASF pushed Euroins to acquire City Insurance, then the country’s largest MTPL provider. Euroins declined, and tensions between the company and the regulator followed. The case is now the subject of arbitration, with Euroins seeking more than €500 million in damages.
