August 26, 2015 / 1:47 PM / 4 years ago

Romania's second-largest insurer to be declared insolvent

BUCHAREST, Aug 26 (Reuters) - Romania’s financial regulator ASF withdrew the operating licence of the country’s second-largest insurer Astra Asigurari on Wednesday and said it will start the process of declaring it insolvent.

ASF chief Misu Negritoiu said Astra Asigurari, which has a market share of just over 10 percent, had a liquidity coverage ratio of 0.03 at the end of June and additional capital needs of 968 million lei ($248.19 million).

The company has been under special administration since early 2014.

A KPMG report on the insurer showed Astra Asigurari, which is unlisted, was unable to pay its debt with existing funds and that its capital requirement ratio had fallen to less than half the legal minimum requirement, Negritoiu said.

“Structural problems could not be corrected,” Negritoiu told reporters. “All three conditions that define insolvency have been met.”

He added the ASF’s underwriting fund for the insured would cover compensation claims from Astra’s roughly 2.5 million insurance policies, which he estimated at some 700 million lei. ($1 = 3.9003 lei) (Reporting by Luiza Ilie, editing by David Evans)

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