“Should Astra and Carpatica Asig go insolvent, the market will see a 5-10% drop in subscriptions and insurers will have to pay higher quotas to the guarantee fund, along with higher insurance premium quotes,” said Constantinescu.
He said the evolution of the local insurance market depends on the actions the financial regulator ASF will take.
“If Astra and Carpatica Asig remain on the market, things will worsen because other insurers will no longer observe the law because why should they?” said Constantinescu.
He added Astra’s solvency margin has been below the minimum level required by law for more than 18 months.
“When Astra goes bust, we will all suffer. No serious investor would buy, not even take over for free, a black hole. KPMG, Astra’s special administrator, won’t find a buyer. I’d like to think ASF will make a decision regarding Astra by the end of this month,” said Constantinescu.
ASF placed Astra under the special administration of KPMG in February 2014 and ordered it to raise its share capital to adequate solvency margins.
ASF president Misu Negritoiu said in November three or four investors were looking into Astra Asigurari’s capital raise, which could be completed by the end of the first quarter this year.