“Under the law, PAID must create all types of technical reserves – premium reserves, damage and disaster reserves – whose total value currently stands at over RON30 million. PAID’s liquidity quotient is 124 and its solvency ratio is 1.65 – both indices are above the minimum limit set by insurance regulator CSA,” PAID general manager Marius Bulugea said in a press release Thursday.
The press release is a response to the recent statements made by Cristian Constantinescu, whom the Parliament’s budget and finance committees did not endorse for the position of CSA president.
According to Constantinescu, the insurance pool, which issues mandatory home insurance policies, faces a technical reserve disaster.
“PAID can pay claims anytime for each of the three categories of risk it covers, for the policies included in its own portfolio,” said Bulugea.
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.
The first mandatory home insurance policies were issued in July 2010. Official data reveal there are 8.39 million homes in Romania.
PAID has signed a reinsurance contract for the 2011-2012 insurance year, which took effect on July 15, 2011.
PAID has so far approved 73 claim files, and compensation was paid for 31 of them. The remaining files are currently being analyzed. The company paid damage claims of over RON260,000.
Early-August, it paid the first total damage claim for a building insured through a mandatory policy, worth EUR20,000, for a house in Avrig, Sibiu county, which was destroyed in a flood.
The insurer administers over 800,000 mandatory home insurance policies.
PAID is a joint stock insurance-reinsurance company that manages the risk fund meant for paying damages in case of natural disasters. Its 13 shareholders are: ABC Asigurari, Astra Asigurari, ARDAF, Carpatica Asig, Certasig, City Insurance, Credit Europe Asigurari, Euroins Romania, Generali, Grawe Romania, Groupama Romania, Platinum Asigurari and Uniqa Asigurari.
(EUR1=RON4.3081)