Romanian prosecutors conducted house searches in 12 locations in Bucharest and two in Târgu Mureș on Wednesday, November 26, in a case targeting former employees of bankrupt insurer Euroins. Specifically, the searches targeted 10 individuals who held executive management positions within Euroins, as well as the headquarters of legal entities controlled by the Bulgarian shareholders of the company, according to the press release.
The investigations focus on activity carried out in the period 2017–2023. At that time, Euroins’ Bulgarian owners, together with individuals in the Romanian management and affiliated entities, allegedly “created, conceived, applied, and coordinated various mechanisms to defraud the company’s financial resources.”
The ultimate goal of this endeavor was “the decapitalization of the company by drastically reducing the cash and assets available to it,” according to the investigators. To do so, the perpetrators systematically undervalued and refused payment to policyholders.
The ASF control carried out for the period 2000–2021 revealed that a former director of the Claims Directorate within Euroins unjustifiably rejected over 5,800 claims files, with obligations exceeding RON 60 million, without a thorough analysis, investigators said.
Moreover, the company did not report the actual number of lawsuits to ASF, hiding 36,707 files, of which 20,268 involved enforcement proceedings and 16,439 were compensation claims. This policy generated colossal penalties (0.2% per day of delay) and significantly diminished the company’s assets through enforcement costs.
ASF controls between 2020 and 2023 revealed that Euroins had a capital deficit of RON 2.19 billion, which led to the withdrawal of the operating license and the finding of the company’s insolvency in 2023. ASF also found that at the date of opening the bankruptcy procedure, the company’s reserve (covering declared but unpaid claims) should have been RON 1.7 billion, but was only RON 683 million.
Faced with the imminence of bankruptcy, the company shareholders allegedly implemented a mechanism to outsource financial resources worth RON 1.5 billion, directly harming policyholders and creditors. These operations, carried out with ‘affiliated entities under the direct or indirect control of the same associates,’ allegedly caused serious damage to Euroins in the total amount of over RON 75 million, according to investigators.
In reply to the investigation, Eurohold Bulgaria AD (Eurohold) and Euroins Insurance Group AD (EIG) said that home searches against former Euroins Romania employees coincide with the filing of a second international arbitration action against the Romanian state at the International Center for Settlement of Investment Disputes (ICSID) in Washington. The case, according to the press release, is about the unlawful revocation of Euroins’ license, allegedly organized by a group of senior officials within the ASF.
“All speculative forecasts for huge damages and costs that Euroins Romania would have to pay in insurance claims proved to be manipulative, which further confirms the fact that ЕIRO had been solvent and well capitalized as of the date when its license was revoked,” the company representatives said.
According to the former owners of Euroins, Romanian regulators “have now engaged law enforcement agencies to search the drawers and wardrobes containing personal belongings of regular Romanian citizens who have worked as employees at Euroins Romania.”
(Photo source: Inquam Photos | Octav Ganea)
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