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).
The Council of Romania’s Financial Supervisory Authority (ASF) on Sept. 17 withdrew the operating license of City Insurance, the country’s biggest insurer that owes its position to the massive portfolio of mandatory car insurances, bne Intellinews reported. The ASF will now initiate bankruptcy procedures against City. The Romanian insurer, set up and controlled until June by Romanian businessman Dan Odobescu, the brother-in-law of former prime minister Adrian Nastase, failed to observe the recovery strategies required by the ASF in June.
The Dambovita county court has launched bankruptcy proceedings against Romanian special steel mill Cos Targoviste, formerly known as Mechel Targoviste, SeeNews reported. The court rejected the reorganisation plan submitted by Alpha Financial, one of the steel mill's creditors, a statement filed on Wednesday by Cos Targovishte with the Bucharest Stock Exchange, BVB, showed. Cos Targoviste said that it will appeal the court decision. As a result of the start of bankruptcy proceedings, the company's shares were suspended from trading on the main segment of the BVB on Thursday.