Romanian FSA extends insurance market assessment

16/07/2015

To evaluate the financial soundness and solvability of the insurers, the assessment will look at each insurer’s: (i) insurance portfolio; (ii) efficiency of risk transfer through reinsurance; (iii) adequacy of its recognition and valuation methods regarding liabilities and assets; (iv) coverage of technical reserves with approved assets; (v) adequacy of funds. Assets and liabilities will be valued in accordance with applicable accounting provisions and with Solvency II standards.

Insurers will bear the cost of their assessments. Additionally, each insurer participating in the BRSE program will select its own auditor (a change from the prior assessment where the FSA selected directly auditors), based on the following principles:

(i) Auditors must have at least 7 years of international experience regarding the audit of insurers;

(ii) At least 5 experts for each audit team must have knowledge and practical experience in the financial sector;

(iii) The audit team must include at least 1 actuary and 3 experts possessing practical skills in auditing or assessing life and non-life insurers;

(iv) The auditor must not be the statutory auditor of the insurer;

(v) The auditor must not have carried out a statutory audit for that insurer within a period of 5 years before this assessment; and

(vi) The auditor must not be the special administrator of the insurer.

The full text of the 8 July 2015 press release announcing the BSRE project and listing the involved insurers can be accessed here.

If you are interested in finding out more details about the above and/or would like to discuss how the upcoming assessment may affect your business, please contact our insurance team in Bucharest.