Press release

Press release regarding the rejection of the short-term financing plan and the recovery plan, the withdrawal of the operating license, establishment of the insolvency and promotion of the application for bankruptcy proceedings against the Insurance-Reinsurance Company City Insurance S.A.

 

Bucharest, 17 September 2021 - The Romanian Financial Supervisory Authority (A.S.F.) hereby informs that, given that no documentary evidence has been made of the way in which the Insurance-Reinsurance Company City Insurance S.A. will permanently hold eligible own funds to cover the Solvency Capital Requirement (SCR) and the Minimum Capital Requirement (MCR), as well as the lack of eligible basic own funds to cover the absolute MCR threshold, the calculated SCR value and the calculated MCR value, in accordance with the provisions of art. 21 para. (1) letter d) and letter e), art. 67 para. (1) letter a), art. 72 para. (1) and art. 95 para. (1) of Law no. 237/2015, with as subsequently amended and supplemented, given the non-existence of the payment to the share capital, following the analysis of the manner of fulfilling the measures ordered by the A.S.F. Decision no. 714/2021, respectively A.S.F. Decision no. 724/2021, it resulted that the Short-Term Financing Plan and the Recovery Plan are clearly inadequate and do not ensure the restoration of the company's financial situation and, on the one hand, the company's solvency is constantly deteriorating and, on the other hand, the company is clearly insolvent.

            Therefore, for the protection of policyholders, the Board of Directors of A.S.F. decided as follows:

- withdrawal of the operating license of the Insurance-Reinsurance Company City Insurance S.A., in accordance with the provisions of art. 110 of Law no. 237/2015, establishment of the insolvency of the Insurance-Reinsurance Company City Insurance S.A., as defined by art. 5 para. (1) point 31 letter a) and letter b) of Law no. 85/2014 on insolvency and insolvency prevention procedures, as subsequently amended and supplemented and the promotion by the Financial Supervisory Authority of the application on the opening of the bankruptcy procedure against the company, according to the provisions of art. 249 of the mentioned law.

 

We remind you that, based on Decision no. 714 / 03.06.2021, the following obligations were established in charge of the Insurance-Reinsurance Company City Insurance S.A. the:

  • submission for approval to the Financial Supervisory Authority of a short-term financing plan, within one month as of the date of receipt of Decision no. 714 / 03.06.2021, so as to restore the level of eligible basic own funds covering MCR or to change the risk profile, so that within 3 months, the MCR will be again complied with;
  • submission of a restored Recovery Plan, within 2 months as of the date of receipt of Decision no. 714 / 03.06.2021, containing measures to restore the level of eligible own funds covering the solvency capital requirement for the modification of the risk profile, so that the SCR level is restores within the legal deadline, from the date of finding the non-compliance with the SCR by Decision no. 325 / 10.03.2021. By Decision no. 724 / 04.06.2021, the Financial Supervisory Authority appointed the Insured Guarantee Fund (F.G.A.) as temporary administrator in order to replace the management of the Insurance-Reinsurance Company City Insurance S.A., in order to restore the financial status of the insurer and to ensure a healthy and prudent management of the insurer's activity, in accordance with art. 30 paragraph (2) in conjunction with art. 33 in relation to art. 2 point 3 of Law 246/2015 on the recovery and resolution of insurers. The deadline established in Decision no. 714 / 03.06.2021 for the restoration of MCR was 04.09.2021 (respectively the first working day, 06.09.2021).

                 At the same time, starting 05.04.2021, the Financial Supervisory Authority notified the Public Ministry, but also other state authorities regarding the facts found in the Insurance-Reinsurance Company City Insurance S.A.

                 For a complete documentation regarding the results of the supervision and control process, we provide below a summary of the sanctions imposed by the Authority on the Insurance-Reinsurance Company S.A.R. City Insurance S.A.

 

A SUMMARY OF THE SANCTIONS IMPOSED BY THE FINANCIAL SUPERVISORY AUTHORITY TO CITY INSURANCE

During 2014-2021, the Financial Supervisory Authority imposed to the Insurance-Reinsurance Company City Insurance S.A. the following sanctions:

Decision no. 762/14.06.2021

410,900 lei

fine according to Law no. 132/2017;

Decision no. 714/03.06.2021

2,930,766 lei

fine and setting some measures (MCR financing plan and SCR recovery plan);

Decision no. 716/03.06.2021

1,000,000 lei

fine and withdrawal of the authorization of Mr Renato Szilagyi, Chairman of the Management Board;

Decision no. 717/03.06.2021 

1,000,000 lei

fine and withdrawal of the authorization of Mr. Buzerea Barbu Mircea, Vice-Chairman of the Management Board;

Decision no. 718/03.06.2021

1,000,000 lei

fine and withdrawal of the authorization of Mr. Spyridon Stavros Mavrogalos Fotis, member of the Management Board;

Decision no. 723/03.06.2021

1,000,000 lei 

fine and withdrawal of the authorization of Mr. Browne Woodthorpe Robert, Chairman of the Supervisory Board;

Decision no. 719/03.06.2021

1,000,000 lei 

fine and withdrawal of the authorization of Mr. Rossler Max Walter, Vice-Chairman of the Supervisory Board;

Decision no. 722/03.06.2021

1,000,000 lei

fine and withdrawal of the authorization of Mr. Pascale Cristian, member of the Supervisory Board;

Decision no. 721/03.06.2021

1,000,000 lei 

fine and withdrawal of the authorization of Mrs. Arampova Aelita, member of the Supervisory Board;

Decision no. 720/03.06.2021

1,000,000 lei 

fine and withdrawal of the authorization of Mr. Papanikolaou Epameinondas, member of the Supervisory Board;

Decision no. 325/10.03.2021

2,600,000 lei

fine and recovery plan (SCR);

Decision no. 83/25.01.2021

530,000 lei

fine given to Mr. Renato Szilagyi, Chairman of the Management Board;

Decision no. 84/25.01.2021

   500,000 lei

fine given to Mr. Buzera Barbu Mircea, Vice-Chairman of the Management Board;

Decision no. 85/25.01.2021

500,000 lei

fine given to Mr. Spyridon Stavros Mavrogalos Fotis, member of the Management Board;

Decision no. 86/25.01.2021

450,000 lei

fine given to Mr. Browne Woodthorpe Robert, Chairman of the Supervisory Board;

Decision no. 87/25.01.2021

450,000 lei

fine given to Mr. Rossler Max Walter, Vice-Chairman of the Supervisory Board;

Decision no. 88/25.01.2021

450,000 lei

fine given to Mr. Pascale Cristian, member of the Supervisory Board;

Decision no. 89/25.01.2021

450,000 lei

fine given to Mrs. Arampova Aelita, member of the Supervisory Board;

Decision no. 90/25.01.2021

   450,000 lei

fine given to Mr. Papanikolaou Epameinondas, member of the Supervisory Board,

Decision no. 3/13.01.2021

   500,000 lei

fine applied to the company based on Law no. 132/2017;

Decision no. 458/06.04.2020

100,000 lei

fine applied to the company;

Decision no. 1040/13.08.2019

                         -

written warning applied to the company;

Decision no. 1180/26.09.2019

50,000 lei

fine applied to the company,

Decision no. 123/25.01.2018

-

written warning applied to the company;

Decision no. 494/10.04.2017

30,000 lei

fine given to Mr. Cristian Pascale, member of the Board of Directors;

Decision no. 492/10.04.2017

30,000 lei

fine given to Mr. Dan Odobescu and withdrawal of the authorization of the membru, președinte CA;

Decision no. 493/10.04.2017

20,000 lei

fine given to Mr. Dan Odobescu and withdrawal of the authorization of the General Manager;

Decision no. 2315/21.12.2016

10,000 lei

fine given to Mr. Dan Odobescu, General Manager;

Decision no. 2314/21.12.2016

30,000 lei

fine and measures established against the company;

Decision no. 912/19.04.2016

40,000 lei

fine given to Mr. Papanikolaou Epameinondas,

Deputy General Manager;

Decision no. 911/19.04.2016

10,000 lei

fine given to Mr. Claudiu Mândrilă, Claims Manager;

Decision no. 910/19.04.2016

50,000 lei

fine given to Mr. Dan Odobescu, General Manager;

Decision no. 902/18.04.2016

100,000 lei

fine applied to the company and action plan;

Decision no. 2307/29.12.2014

20,000 lei

fine given to Mr. Mușat Nicolae, General Manager;

Decision no. 2309/29.12.2014

20,000 lei

fine given to Mrs. Măzăreanu Ioana, Deputy General Manager;

Decision no. 198/23.05.2014

-

written warning issued to Mr. Mușat Nicolae, General Manager;

Decision no. 199/23.05.2014

5,000 lei

fine given to Mr. Claudiu Mândrilă, Claims Manager;

Decision no. 158/30.04.2014

-

written warning issued to Mr. Claudiu Mândrilă, Claims Manager.

 


The Financial Supervisory Authority also imposed to the
Insurance-Reinsurance Company City Insurance S.A. the following measures:

Decision no. 455/06.04.2020

-

remedial action for the deficiencies found pursuant to Law 237/2015;

Decision no. 457/06.04.2020

16,500,000 euro

solvency capital increase applied to the company.

 


17/09/2021
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