Romanian Govt. Calls for Investigations in Case of EUR 0.5 bln City Insurance Bankruptcy

Based on similar cases in the past, Ziarul Financiar daily estimates that the damages left by bankrupt insurer City Insurance will reach RON 2.5bn (EUR 500 mln), Romania-Insider.com reported. Based on existing regulations, the mutual guarantee funds for the insurance industry (FGA) are supposed to cover the bankrupt insurer's liabilities, using its reserves set aside for such situations. The government on September 22 passed an emergency ordinance to allow FGA to disburse money faster, before the final bankruptcy of the insurer (as stipulated under existing regulations). However, Prime Minister Florin Citu called for thorough investigations in this case and pointed to the insurer's audit firms, to the market regulator ASF and to the tax collection agency ANAF as starting points. Separately, Acting Finance Minister Dan Vilceanu is the first government official to use the term "fraud" in connection to the case. Read more.

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