Representatives of PAID (the Disaster Insurance Pool), whichwill manage mandatory home insurance, expect around 35-40% homes inRomania to have home insurance by the end of next. The coming intoforce of the mandatory home insurance law has already been put offseveral times. PAID could start distribution of policies in lateJanuary - early February.
"PAID obtained the authorisation to function from the InsuranceSupervisory Commission (CSA) in mid-October and was registered withthe Romanian Trade Registry on November 5th. We are required tostart operating within 90 days from the date," says Radu Mustatea,vice-president of PAID and president of the managing board of AstraAsigurari. He admits, however, that the risk is there that policydistribution could not start in time, considering that there areseveral unresolved problems, such as a lack of an IT system able tomanage the database of all homes in Romania.
"We may be unable to start operating in time because so far wehave only appointed a general manager, rented headquarters andtalked among us," says the PAID vicepresident.
According to Mustatea, the issuing of mandatory home insurancecould initially focus on social housing and on homes alreadyincluded in the portfolio of insurance companies, which amount to35-40% of overall homes in Romania. Astra Asigurari has a portfolioof over 1.1 million home insurance policies that will be renewedthrough PAID when the system is launched.
The law of mandatory home insurance was approved in Parliamentat the end of last year, with a portion of insurance companieschoosing not to enter PAID, citing the fact that it does notprovide enough protection to insurers, considering the risks theyare exposed to.
Mustatea believes several modifications could be made to thelaw, but says its current form allows for the system to belaunched. "The law is perfectible, but this does not mean it cannotbe enforced," he says.
Currently the price of the policy is 10 or 20 euros, dependingon the material that the home is built of. According toauthorities' estimates, around 60% of homes are included in the Aclass, where the value of the policy is 20 euros. The insured sumis 10,000 or 20,000 euros.
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