Bulgaria To Claim €500 Million From Romania Over Closure of Representation
Bulgarian insurance company Eurohold has announced its intention to seek €500 million from the Romanian government through arbitration for the "unlawful expropriation" of its Romanian representation.
This statement comes directly from Eurohold.
Bulgarian company Eurohold Bulgaria AD and its parent company Euroins Insurance Group EAD (EIG) have officially informed the Romanian government of their intention to file for international arbitration to protect their investments in Romania.
They seek to challenge the decision made by the Romanian financial regulator ASF in March of this year to revoke the license of Euroins Romania – the Romanian representation of Eurohold Bulgaria AD and the country's largest car insurer.
The Romanian regulator made its decision based on an analysis of EIG's solvency, which reportedly showed a capital deficit of over €400 million and a minimum capital deficit of over €250 million.
The Romanian authorities explained their decision by citing a capital deficit of over €650 million for Euroins Romania, but Eurohold asserts that there are no solvency issues with the company.
"The ASF decision is arbitrary, discriminatory, and constitutes unlawful expropriation, which is a clear violation of international law. As a result of these actions by the Romanian regulator, Euroins Romania initiated bankruptcy proceedings, which had a significant impact on the insurance group's business in Romania," the statement reads.
Eurohold and EIG stated that they were compelled to take legal action following the Romanian financial regulator ASF's decision on March 17 to revoke the license of Euroins Romania, the largest Romanian car insurer. Eurohold described this move as nothing less than a "hostile takeover."
Kiril Boshov, CEO of Euroins Insurance Group, the parent company of Euroins, has stated that the claim will amount to at least €500 million.
Previously, the Prime Minister of Bulgaria, Nikolai Denkov, revealed that he had raised this issue during a meeting with his Romanian counterpart, Marcel Cholak. He insisted that the Bulgarian company should be treated with full respect in accordance with EU legislation.
However, if the Romanian side agrees to meet the insurer's demands, the matter may not proceed to a legal dispute.
As previously reported by The Gaze, export credit agencies of several G7 countries have confirmed their involvement in insuring political risks for their companies operating in Ukraine. They provide guarantees against risks such as political violence, non-convertibility, and expropriation.