The bankruptcy had been expected on the insurance market for some time, considering the situation of City Insurance.
ASF found during an inspection in Romania and abroad this spring that certain bank statements submitted by City Insurance were forged and the money did not exist.
ASF notified the relevant authorities of the forgery, it said.
City Insurance owners were Dan Odobescu, brother-in-law to former prime minister Adrian Nastase, and Italian investors.
City Insurance surged after the bankruptcy of Astra Asigurari, another auto liability insurance vendor.
City Insurance grew so much that it came to account for almost half of the auto liability insurance market in Romania because it sold such policies at the lowest price.
Euroins, the second leading insurer on the auto liability insurance market, got a capital inflow and continues operations.
(English version by Loredana Fratila-Cristescu)