Assen Christov, President of Eurohold: "People from ASF tried to steal our business"

Reporter: In a statement from July, Eurohold accused the Financial Supervisory Authority (ASF) of acting illegally to remove Euroins Romania from the market. Also, in the release it was mentioned that the company drew up a report in this sense (in which it proved that Euroins Romania was financially stable and solvent when the ASF withdrew its license). What is the stage of this approach? Have you received a response from the authorities?

Assen Christov: I haven't received the answer yet. In March, the ASF withdrew our operating license, through a procedure by which it violated a lot of laws, not only in Romania but also in Europe. Of course he later told a different story - that everything was in accordance with the law, etc. We are still challenging all their decisions in court. At the same time, we have certain proposals for ASF from the other companies of our holding, to avoid the situation in which Romanian citizens lose so much money. We also proposed to the Guarantee Fund that we take back the entire portfolio within the assets of Bulgarian companies and cover all existing and future claims. I was really surprised to see that no one responded to this proposal. Here I am referring to the ASF, the Parliament and your Government. It seems that no one is interested in saving about three to four hundred million euros for Romanian citizens. However, everyone says there is no money in the Guarantee Fund. After that, against all logic, at the beginning of September, the validity of the policies issued by Euroins Romania that should have expired on September 9, was extended by another three months. It goes against logic because it immediately creates additional losses for the Guarantee Fund, which it has to cover. It creates additional losses for all creditors of the insurance company Euroins Romania, etc.

Reporter: What do you think are the mistakes that Euroins made so that it reached the current situation?

Assen Christov: The only mistake is that we refused to participate in this corruption situation. Here we are talking about corruption at a very high level, corruption at the ASF level or even at a higher level. I can tell you that at the present moment, in the office of the general prosecutor in Bulgaria, actions are already opened against Mr. Roşu (n.a. Cristian Roşu, vice president of ASF), Mr. Ionescu (n.a. Valentin Ionescu, director general of the General Directorate of Insurance in ASF) and I think that, in the next month, a new Romanian citizen will appear. It's not just about investigations, it's already about abuse of office. Therefore, according to Romanian legislation, these two people cannot be part of the ASF board. I have already informed the structures and the Government in Romania about this and I am surprised that no one, even from the Parliament, says that, according to Romanian and European legislation, Mr. Roşu cannot be a member of the ASF board. There are even rumors that he might be re-elected. I think that all these people who form a real criminal group and whom I suspect have a certain political protection, believed that after what happened in Romania, the holding (n.r. Eurohold) would be destroyed. But it's not like that. We are still the largest holding in Bulgaria and operate in Europe. Our income has decreased by 10-15% but we are still operating and we are very well accepted everywhere. We also have other insurance companies, and one of them is Euroins Bulgaria. Euroins Bulgaria is allowed to work in Romania since 2007 under Freedom of Services member state, making it necessary to establish there). During this time we concluded certain policies - we are already prepared and a few days ago we started working actively with all types of insurances, except RCA. Because for RCA we need to connect to the Guarantee Fund and BAAR and get a new permission from the Bulgarian regulator which we expect in the next few days. We will see if we continue with RCA, but with all other types of insurance policies we are active in Romania through our Bulgarian company. I am very surprised that unofficially people from ASF are calling all the brokers trying to stop them from working with us. Also, they have already started speaking against two other Bulgarian companies operating in Romania. That's why I think certain politicians are involved. And I am surprised that the law is being broken, especially the competition law.

Reporter: What do you think are the mistakes that the Financial Supervisory Authority made so that it reached the current situation?

Assen Christov: In practice, they violated many Romanian laws and European directives. We're talking about trying to steal our business. I say this because, a few days ago, a new insurance company (N.R. Eazy Asigurări) was licensed in Romania. It is very strange that ASF has done this in a very short time. I tried to find out more about this company, I looked up their website. Nothing. I think it's a very interesting investigative case for journalists. On the other hand, at the same time they extended the validity of our policies. So, I will not be surprised if this new insurance company will try to get the portfolio (n.r. that belonged to Euroins Romania) from the Guarantee Fund, which contains around 1.3 - 1.4 million policies. Their average validity will be one and a half to two months, after which they will expire. I say average because after one year all policies expire. We are not far from March 17, but some policies will expire in October, November. So, I wouldn't be surprised if this insurance company will go to the ASF and try to get the portfolio for one euro, and then renew all the policies and take 10% or 15% of the market for nothing. If this happens, it will really be confirmed that they tried to steal the business from the company that has been working in your market for more than 17 years, that is Euroins Romania. That is why we believe that we are talking about corruption, about trying to steal the business from a big company, and it is strange that it is happening in a country that is part of the European Union.

Reporter: CITR requested the cancellation of the reinsurance contract between Euroins Romania and the reinsurer EIG Re, which is part of the Eurohold group. What are you going to do if the court cancels the reinsurance contract?

Assen Christov: It would be something very strange. CITR, which is the liquidator of the company (n.r. Euroins Romania), accepted that before Euroins Romania was put into bankruptcy, it had claims and debts in relation to another reinsurance contract. Contract that ASF says is not valid and practically does not exist. For this reason, we replaced that contract with another reinsurance contract. But now, very interestingly, CITR decides to accept all claims and liabilities from this reinsurance contract with a very strong European reinsurer. I wonder what is true? If CITR recognizes it (n.r. the contract) it means that it exists, so Euroins Romania is a perfect company. So ASF is wrong. If ASF is right, CITR is wrong. So, I don't understand who is right and who is wrong. At the same time, the reinsurance contract through which I replaced the other one, worked perfectly from January 1 to March 17, even ASF agreed with this. But suddenly they said that this contract is no longer valid. It is strange because when they made the decision to put the company into bankruptcy, they said that this contract does not exist and they do not accept it. But if the contract does not exist, how can you now break it. On the other hand, if the contract exists at this moment, then all reserves and liabilities of Euroins Romania should be covered. Which means that there is no right to declare the company bankrupt. But if there is not, why do they now want to start legal proceedings against him. It is new evidence of corruption. There is no lawsuit yet, but if there is, I'm sure we will defend perfectly that this contract exists and that everything is according to the law.

Reporter: Considering the principles of Freedom of Establishment and Freedom to Provide Services of the European Union, do you think you can still return to Romania and sell RCA policies?

Assen Christov: The Bulgarian regulator checked the company in Bulgaria and the first conclusion is that the conditions are really good. As you know, we work under Freedom of Services in Greece, in Poland, in Spain, etc. I am sure that we will receive the confirmation from the Bulgarian regulator and we will be ready to resume the activity (n.r. in Romania) for RCA. We'll see if we do that or not. We may not start again right away. I want to see how people perceive us - it seems they still believe in the other types of insurance (not Euroins). And after a while, maybe, we will start again with RCA. But we're not that impatient - for us it's more about the principle of fairness and proving that we have enough stability to operate in your market.

Reporter: Euroins operates in many countries in the region and, as far as I know, only in Romania have there been such problems. How do you explain this situation?

Assen Christov: I am surprised to see that only in Romania are Bulgarian businesses not welcome. There are other companies that have problems in this country and I am surprised that it has become like a national policy. It is very strange. We work in over 12 countries and never in our history have we had problems anywhere else - only in Romania. I attribute this more to the environment, to corruption. I hope that Romania's top politicians take measures against corruption. Last year I had three meetings with Mr. Marcel Ciolacu, in which I informed him about certain problems in the ASF and in your insurance environment. I hope he heard us. So far it appears that no action has been taken.

Reporter: From what I know, but I could be wrong, Euroins Romania did not bring the capital requested by ASF. Even if you did not agree with the Authority's analysis, why did you not bring the requested capital?

Assen Christov: I brought the required capital. In the last ten years, we have invested 273 million euros in your country. Every time ASF asked us for capital, we brought it. The last money was brought in last September or October, and at this point we have enough evidence to show that ASF told us everything was fine. But suddenly, in February (n.r. this year) ASF decided to go back in 2020 and find some things (...). If you check carefully you will see that at the time they decided to revoke our license there were no late payments or anything like that. There were just some rumors in two Romanian newspapers and even the ASF said, in the first two days, through Mr. Apostol who was the spokesperson and then through Mr. Roşu, they said that there were no economic reasons for this (n.r. license withdrawal) and that it penalizes the company for its behavior. I'm sorry, but I didn't understand what our behavior was. And it was the first time I've ever heard anyone say it's a punishment for behavior. First they said everything was fine, then in December they said there were 400 million euro shortfalls and suddenly, when I decided it wasn't true and I had a few meetings with them, after two months, in February , they decided that there are many more (n.r. deficiencies). But with this reinsurance contract and others we have even that covered. I still don't understand their position. Basically, they created a big hole for the Romanian market. A big surprise for me was the preliminary report on Euroins published by CITR, in which it talks about five billion (n.r. lei, total potential debt exposure), but only 600 million are due, and the others may or may not happen. What does this mean? In this way we can go to very strange amounts. More interesting is that there are some municipal policies (n.r. Oradea Municipality), for which they say that the claims are expected to amount to 112.5 million euros. There are 15 RCA policies and all or half expire. Even if there will be certain claims regarding these policies, the municipality will not be the beneficiary. The beneficiaries will be other people, basically those whose cars will be hit by those of the municipality. It's weird - it looks like someone called them and told them to try to pretend something doesn't exist. This is the reason why I believe that certain persons in the ASF, whose names I have mentioned, are trying to hide their criminal activity. They are trying to misinform the company and cover up that they tried to steal our business.

Reporter: How do you see the RCA insurance market in Romania after the exit of Euroins? How do you think the market will look in the next few years?

Assen Christov: In my opinion, even before our exit the market was stable, profitable and the price was not very high - it was normal. ASF has capped the price for six months, so it does not increase. Our market share, expired policies have been distributed among other players, so the market is completely normal. But the requirement (no amount of money) of the Guarantee Fund arising from the exit of City from the market, which is ten times greater than that of Euroins, will not be able to be covered in the next three or four years. The money has to come from somewhere. And if ASF continues to take 10% of the market, which is exactly what happened - 10% of the revenues that companies pay to the Guarantee Fund, it will not be enough for the following years to cover the needs created by the City. The need arising from the exit of Euroins from the market will be at least five times lower.

Reporter: What are the next steps you want to take, regarding the activity in Romania?

Assen Christov: As I said, we already operate with other types of insurance policies. About RCA, I think in the next few days we will have the notification (n.r. from the regulator in Bulgaria) but we are not anxious to start immediately. We will sue the Romanian State and the Government, outside of Romania, for at least 500 million euros. We are already far along in this proceeding, two very famous law firms are working on this and I am sure we will win. Maybe not immediately but in three or four years (...). But, I would be very happy if someone would sit down with us at the table and see how we can solve this problem going forward. I would also add that, I would be very surprised if, after all the information I have provided about Mr. Roşu, the opposition in the Romanian Parliament, which knows and has the evidence, will still allow him to be elected to the ASF. It would be something very bad for Romania.

Reporter: Thank you!