City Insurance is the biggest car insurance operator in Romania. Close to 3 million drivers are insured by this operator. For all these, the situation is as bad as it gets. For all the traffic incidents happening from now on, they have to go to the Romanian Guarantee Fund, not to their regular insurer as they did so far.
Precisely, 45% of the Romanian drivers are insured at City Insurance. From Friday, the insurer has no license, as it failed to show it has the necessary capital to survive on the market. This lead to insolvency, and the Romanian insurance regulator is preparing to ask for the bankruptcy of City Insurance.
According to sources, the insolvency came as the operator has paid so far EUR 18 million in interest for fake loans supposedly offered by its main shareholder, a Swiss company.
Asked about the situation, Romania’s PM Florin Citu declared:
We have to get used for the companies to go bankrupt in capitalism. It’s a natural thing.Florin Citu on the insolvency of City Insurance
This controversial statement of Romanias’ PM doesn’t solve the problem, though, nor does it help the 3 million Romanians insured at City. Yes, companies go bankrupt, but Romanians got used to it for the last 30 years or so, since the Romanian Revolution.
Where was the regulator so far? How come it didn’t see the problems at City Insurance until now when it is already too late? These are the questions to be answered by a country’s PM, but, as it happens in Romania, no answers will come, no problems will be solved.
The best thing to do now for all the people insured at City is to change their insurer. At least until the second one goes bankrupt. That’s a fact. Until then, insurance specialists talk about the imminent growth of the cost for insurances in Romania. It’s brilliant, especially with all the prices skyrocketing.
Meanwhile, for a complete understanding of the mess in the country, in this context, Romania’s President Klaus Iohannis urges Romanians to go play golf. He says it’s a sport for the masses, not at all expensive or exclusivist.
Somebody stop Romania. For sure some people want to get off!