The reason is that there is no one in Romania at the moment who has an integrated vision of the three markets – insurance, private pensions and capital market, so as to make the institution efficient.
“I for one would dissolve the ASF and return to separate supervision for each industry. When each of these authorities become established authorities, after no less than five or six years, then we might be talking about integrated supervision again,” Constantinescu said.
A reinsurance expert even before 1989, he set up the company that is now Allianz-Tiriac, with $3 million from businessman Ion Tiriac in 1994, which he took to EUR300 million revenue and 2,000 employees 15 years later. He retired in 2010 and remained a member of the board.
The establishment of ASF happened before the biggest scandal on the insurance market so far, with the chairman and another ASF board member currently in custody on charges of having favored insurer Carpatica.
“The only thing that happened, to my surprise, is that a supervisory authority started bringing problems out in the open. There is no difference from before, the market is the same. The problems had been there for many many years swept under the rug by the Supervisory Authority (the former Insurance Supervisory Authority or CSA i.e.).”
Besides the Carpatica affair, Astra, a company held by businessman Dan Adamescu and also the largest insurer in Romania, was placed by ASF under special administration by KPMG, which is to decide how high a capital increase the company needs in order to meet solvency and liquidity requirements. Owner Dan Adamescu challenged the decision, with the lawsuit pending.
On top of that, it has come to light that salaries paid to those at the helm of ASF are higher than what similar supervisory authorities in the US pay, as well as that tens of relatives of high-ranking politicians are employees of the institution.
“There are extremely few people who have effectively worked on a market and got a position with the ASF. 60% to 80% of the ASF employees assigned to the insurance [supervision] have no business being there,” Constantinescu said.
This is the biggest failure of an attempt to create an institution in Romania so far, established only as a source of gravy train for politicians. As a paradox, the idea to create such an institution, official sources say, came from Romania’s central bank (BNR) itself, so the three markets would have been under integrated supervision by the central bank and the person in charge of that should have been BNR first deputy governor Florin Georgescu. The plan was dropped once Florin Georgescu could not take the position. Hungary, Poland and Czech Republic for instance, have integrated financial supervision of banks, insurance, capital market and private pensions.
(English version by Loredana Fratila-Cristescu)