The carriers demand the dismissal of the head of the Competition Council

The transport operators request the Prime Minister Marcel Ciolacu to start the procedure for revoking Bogdan Chiriţoiu from the position of president of the Competition Council, following his recent statements regarding the calculation of RCA policy rates, according to a press release issued by the Confederation of Authorized Operators and Transporters from Romania (COTAR), but also regarding the official's statements related to the transportation of students, according to some sources from employers' organizations.

At the press conference on Tuesday, February 13, 2024, the head of the Competition Council said regarding the existence of a reference of the costs for the repair of vehicles damaged in traffic accidents: "We know how much RCA should cost, there is a reference regarding the commission of brokers and other costs, but we do not have a reference on the cost of repairs. A mechanism should be found to establish a regional reference of these costs, because the insurance companies claim that the RCA tariff does not cover the cost of the work performed in the services. And this is demonstrated by what we found in the market, namely that many companies prefer to exit the RCA market, and new companies entering the insurance market offer other types of insurance, less RCA, which shows that the respective activity is not it is profitable, attractive for market players".

Regarding the statements of Bogdan Chiriţoiu, the transport operators show in the cited press release: "Multinational companies sell RCA policies 250% more expensive than 3 years ago. The Prime Minister of Romania should complete the approach started last year, to change the leadership of the Competition Council, for the recovery of this seriously ill institution which, obviously, supports the activity of insurance companies, jeopardizing that of those on the car repair and transport market. (...) The same institution gives clear support to insurance companies that sell RCA: Bogdan Chiritoiu goes public and asks the Parliament to covertly cap the price of repairs - and, in fact, to destroy this category of services. The report of the Competition Council on the RCA market shows that compensations with repair labor from car services in Romania do not exceed 5% of the sums collected from RCA tariffs, and the insurers' internal expenses are more than 50% of these collections. The President of the Competition Council does not see anything wrong. The capping of tariffs at car repair units is not the solution to the decrease in the RCA price - what COTAR explained, even before the adoption of this false solution by the Government. The so-called administrative expenses of the insurance companies are more than 10 times higher than the total value of the labor compensation, settled by the insurance companies. The automotive and transport industry is seriously affected - an industry that brings 20% of Romania's GDP, while the insurance market is more than 10 times smaller, but it is supported by Romanian institutions, to the detriment of the state's interests".

The cited document also presents a brief history of interventions in recent years that were allegedly made by the president of the Competition Council in favor of insurance companies in our country. According to the data presented by COTAR, the Competition Council repeatedly refused to verify the functioning of the RCA insurance market in Romania, until 2015, when carriers organized the first national protest, against the unjustified increase in the value of RCA policies.

The transport operators state: "Following the investigation, it emerged that between October 2012 and November 2016, the insurance companies no longer set their rates independently, but acted in concert on the market, to increase their rates - following discussions held within their association. (...) Under the eyes of the Competition Council, the RCA insurance market became an oligopoly, and companies such as City Insurance and Euroins ended up obtaining a cumulative market share of over 75% - while Mr. Chiriţoiu saw nothing not right. In July 2021, all companies selling RCA notified ASF 60 days in advance of the increase in RCA rates. Two months later, in September 2021, ASF withdrew the operating license of City Insurance, and in the same month, all RCA prices were experiencing an increase of more than 40%. There was no investigation by the Competition Council, on the subject of price agreements between insurance companies that systematically increased the price of RCA by a significant percentage, overnight, while all drivers in Romania understood what had happened fact. We learn from the ASF report that in the first 9 months of last year the RCA price increased by approximately 8%. This RCA tariff increase was achieved while prices were (only theoretically) capped. The Competition Council still chose not to act".

Transport employers are also dissatisfied with the fact that in the same press conference, Bogdan Chiriţoiu declared himself satisfied that some of the county councils have started the public procedures for assigning routes for transport operators, but drew attention that he would prefer that the main criterion of attribution should be the transport price per student and not the creditworthiness of the company that has served the respective route in the past.

Vasile Ştefănescu, the president of COTAR, told the newspaper BURSA: "We are convinced that the president of the Competition Council thought of a price that would be borne by the county budgets, but we believe that this criterion must be weighed equally with the creditworthiness of the company, with how it served that route in the past. Otherwise, we will find companies that no one has heard of, that have not carried out any passenger transport, and that will offer very low prices during the procedure, which they will honor a month, two - maximum three months after the award , after which they will ask the county council to increase the transport price. And thus the companies that have proven in the last 20 years that they operate according to the legislation in force and that they are good contributors to the state budget, including the county budgets, will be removed from the market".

The transport operators claim that, if the prime minister does not initiate the procedure to dismiss Bogdan Chiriţoiu, they will resort to all legal forms of protest. According to the legislation in force, the leadership of the Competition Council is appointed by the Parliament, the only authority that can verify the activity of the respective public institution and that can order the taking of certain measures.

Regarding the mandate of the leadership of the Competition Council, the relevant European legislation in the matter and which must be respected by our country also shows that it must be completed and can only be terminated for serious reasons. According to article 15 paragraph 9 of the amended and republished Competition Law 21/1996, the term of office of a member of the Plenary of the Competition Council (ed. - including the president) terminates by resignation, upon the expiration of the term of office, by death, by definitive impossibility of exercise , consisting of an unavailability longer than 60 consecutive days, upon the occurrence of an incompatibility, by revocation if he no longer meets the conditions required by law for appointment to office or for conviction, by final court decision, for committing a crime.

According to paragraph 10 of the same article, members of the Plenary of the Competition Council are revocable, by the authority that appointed them.