Insurance market regulator CSA decided Wednesday homes may be insured against natural disasters either through mandatory home insurance policies issued by the Pool of Insurance against Disasters (PAID) or through voluntary home insurance policies, the institution said in a press release.
An order issued by CSA stated that as from September 1, homeowners who insured their homes through voluntary policies had to buy mandatory home insurance once voluntary home insurance contracts expired. Moreover, insurers were allowed to issue voluntary home insurance policies only for sums higher than those covered by mandatory home insurance policies, which range between EUR10,000 and EUR20,000 depending on the type of building.
The decision was appealed in court by insurer Astra Asigurari. On September 18, the court decided to suspend the CSA order.
Set up in September 2009, PAID is a joint stock insurance-reinsurance company that manages the risk fund meant for paying damages in case of natural disasters. Its major shareholders are Astra – 15%, Groupama Asigurari – 15%, Platinum – 15% and Generali Romania – 11%. In addition, ABC Asigurari, Carpatica Asig, Certasig, City Insurance, Credit Europe Asigurari, Euroins and Grawe Romania each own 5.5%.
Homeowners are required to take out insurance against earthquakes, landslides and floods. The yearly premium for the policy sold by PAID is EUR10-20, depending on the type of building, and covers damages between EUR10,000 and EUR20,000.
According to data available at the end of August, PAID administered 202,774 policies, down from 574,229 at the end of December 2011.
In 2011, PAID’s underwritten premiums climbed 19.5% to 35.3 million lei (EUR7.7 million). (EUR1=RON4.5747)