site.btaUPDATED Eurohold to Appeal Court Decision Declaring Its Romanian Subsidiary Bankrupt
Euroins will appeal a June 9 bankruptcy decision of the Bucharest Court against Euroins Romania, pleading exception for unconstitutionality, the Euroins Insurance Group (EIG) said on its website on Friday. Under Romanian law, the granting of an exception for unconstitutionality should lead to the annulment of the decision to open bankruptcy proceedings.
EIG argues that opening insolvency proceedings against an insurance company after the Romanian regulator has withdawn its operating licence and without a final judgment on the legality of the regulator's decision unconstitutionally denies the company concerned the right to a fair trial and effective remedy.
The press release notes that the Bucharest Court admitted the plea of unconstitutionality raised by Euroins Romania and EIG as well founded and will refer the motion of unconstitutionality to the Romanian Constitutional Court, but the Bucharest Court nevertheless applied the existing Romanian law in opening the procedure for insolvency. The court itself found it necessary to address the Romanian Constitutional Court with several questions on the possible unconstitutionality of key provisions of the Romanian insolvency laws in the light of several provisions of Romania's Constitution, the European Convention on Human Rights, Protocol No. 1 to that Convention, and the Charter of Fundamental Rights of the European Union.
The website says that "Euroins Insurance Group maintains its financial and capital stability and will continue to protect both the interests of its shareholders and the rights of its customers - over 2 million policyholders in Romania." "Additionally, EIG has already reached settlement with all non-insurance related creditors who have requested insolvency thus covering additional losses to the Romanian economy."
Following the decision of Romania's Financial Supervisory Authority (ASF)to delicense Euroins Romania Asigurare-Reasigurare S.A., EIG and its shareholders have made several attempts to address the crisis situation on the Romanian insurance market, the Group said. EIG is ready to deploy additional capital by offering a full cover of all of the remaining Euroins Romania's insurance liabilities, which would have resulted in saving more than EUR 500 million in potential future costs for the Romanian Guarantee Fund (and taxpayers) and relief of any tension on the market due to insurance lacking motor third party liability insurance capacity.
The parent company argues that the interim administrators of Euroins Romania have not made the necessary efforts to ensure the conservation of its assets and by their own actions have practically led Euroins Romania to its current state of de facto insolvency.
At the same time, EIG and its key subsidiaries remain fully capitalized and viable and continue their normal operations, as evident from a solvency capital requirement level of 132% for EIG as of the audited year 2022 and of an average 130% for Euroins Bulgaria as of the first quarter of 2023, and all EU and non-EU subsisidiaries remaining in full compliance with their local prudential requirements.