How do we protect ourselves against City Insurance bankruptcy?
In the context of the withdrawal of CITY INSURANCE insurance company’s operating license and the promotion of the application for the opening of bankruptcy proceedings against the leader of the MTPL market by the ASF – Financial Supervisory Authority, customers of this company, who have taken out insurance policies with this company, as well as the injured parties, can resort to the procedures available depending on their situation. Thus, the FGA – Insurance Guarantee Fund, taking note of the ASF’s decision, will proceed with the processing of claims for the reimbursement of insurance premiums, the opening of damaged files, and the processing of claims for the payment of compensation, by awarding the sums due to insured persons, beneficiaries of insurance policies and persons who have suffered loss as a result of a covered risk.
What happens if you have an insurance policy issued by City Insurance?
Suppose you have an insurance policy issued by CITY INSURANCE. In that case, it will remain valid and effective for 90 days after the final decision to open bankruptcy proceedings. Still, it may be canceled at any time to take out a new policy with another insurer.
Suppose you have a comprehensive insurance policy issued by CITY INSURANCE, which you must hold to drive on public roads, as it is still valid. In that case, you can drive on public roads, and you will not be penalized in the event of traffic checks by the authorities. Of course, you must bear in mind the validity mentioned above period.
In addition, if you are involved in a traffic accident, and you are at fault for causing it, for property damage and/or damage caused by bodily injury, the injured third party will be compensated under the RCA policy issued by CITY INSURANCE, up to a maximum of 450,000 lei and by filing for bankruptcy.
Please note that on 22.09.2021, the Government adopted an Emergency Ordinance amending Law 213/2015 on the FGA, and the ceiling of 450,000 paid by the FGA will be increased to 500,000 lei and will apply to each claim due under an insurance contract.
How can you recover the difference in the premium paid if you cancel your CITY INSURANCE policy?
Suppose you terminate the policy without any damage during the validity period before termination for the unexpired period. In that case, the premium difference can be recovered from the FGA by submitting a reasoned request for payment of the premium refund, according to the model provided by the FGA here: https://bit.ly/2Zu4t6A, accompanied by supporting documents, from the date of publication of the ASF’s decision to withdraw the insurer’s authorization and up to a maximum of 90 days after the final decision to open bankruptcy proceedings.
The following documents must be enclosed with the application:
- proof of cancellation of the insurance contract, registered/transferred to CITY INSURANCE;
- copy of insurance policy;
- copy of proof of payment of insurance premiums;
- copies of the identification documents of the petitioners – a copy of the CI/certificate issued by the ONRC, if applicable;
- power of attorney, if applicable.
What happens if you are the victim of a road accident caused by a driver who holds a policy issued by CITY INSURANCE?
For the granting of compensation or indemnities, if you are the victim of a road accident caused by a driver holding a policy issued by CITY INSURANCE, if the damage has not yet been endorsed, the endorsement can be made by applying directly to the FGA, at the latest by the time the insured cancels the TPL policy, but no later than 90 days from the date of the opening of bankruptcy proceedings.
To collect the compensation, a reasoned request for payment shall be submitted, together with supporting documents, starting from the date of publication in the Official Gazette of Romania of the ASF decision to withdraw CITY INSURANCE’s operating license and no later than 90 days from the final decision to open bankruptcy proceedings or from the date of the claim, if later.
Another important amendment adopted by the Government on 22.09.2021 concerns the fact that the FGA will make the compensation payments within 60 days from the date of publication in the Official Gazette of Romania of the ASF’s decision to withdraw CITY INSURANCE’s operating license and not from the final decision to open bankruptcy proceedings, as it was before the amendment.
The compensation claim shall be made following the model in Annex 10 of Rule 24/2019, available here: https://bit.ly/2XUVtXI.
The following supporting documents must be enclosed with the application:
- copy of insurance policy;
- copy of the registration certificate/ownership certificate of the damaged property;
- the amicable statement/minutes drawn up by the authorized bodies;
- repair estimate and invoice;
- copy of identity card / updated certificate issued by ONRC, if applicable;
- power of attorney/power of attorney/assignment of claim, if applicable.
Both the claim for recovery of the premium difference and the claim for compensation shall be addressed to the FGA and shall be submitted to its head office directly or by post, by registered letter with acknowledgment of receipt, by e-mail, or by any other means which ensures both transmission and receipt and may also be submitted to the agents appointed by the FGA for this purpose.
Applications and documents shall be submitted in Romanian; in case of applications and documents in a foreign language of international circulation, they shall be accompanied by a certified translation.