The Romanian Office for Auto Insurance (BAAR) on Wednesday decided to expel insurance companies Grup As (Ace Group) and Metropol from the issuers of Carte Verde (Green Card) insurance.
"As they had significant debts to the corresponding offices abroad, the two companies lost the right to issue Green Cards," Maria Bugeanu, BAAR secretary general, told Ziarul Financiar.
The Green Card insurance is a civil liability auto insurance against damage incurred by third parties, compulsory for those travelling abroad by car.
According to the convention, Green Card offices abroad calculate and cover damages caused by the owners of such policies and then announce the Romanian bureau. The insurance company having issued the policy then makes the payment to the respective office abroad.
Due to tighter competition, the Romanian Green Card market has "sunk very low" over the past few years, meaning that bonus quotations shrank so much that they were unable to cover potential damages.
Following successive damages, the two companies had debts worth several hundred thousand dollars, which they tried to reschedule.
"When they pay all their debts, they can file an application showing that they fulfill all conditions and they will be able to resume this activity," Bugeanu said, without disclosing the exact debts of the two companies.
Metropol had already experienced such problems in 1997, but regained the right to issue Green Card insurance at the end of 1998.
"Due to a very high volume of fraud committed by persons involved in traffic accidents, Grup As posted a series of payment delays, mainly towards the Hungarian "Green Card" Office. In order to solve these problems, a joint strategy to fight his phenomenon has been set, by carefully researching files and rescheduling due payments," said Ionel Calota, marketing manager with Grup As.
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