The treaties on which the European Union is built require that EU institutions work as openly and as closely as possible with EU citizens. The EU Charter of Fundamental Rights and the Treaty on the Functioning of the European Union, for instance, recognize the fundamental right of EU citizens to access EU documents. EU Regulation 1049/2001 is supposed to translate the EU’s transparency obligations into reality and the EU Parliament, as the only EU institution directly elected by EU citizens at the EU level, has a special oversight and accountability role within the Union – writes Siebert Droese MEP, Member of the EU Parliament Committee on Economic and Monetary Affairs
However, a gap exists between the theoretical ideal of EU transparency and the reality. That gap is dramatically demonstrated by the Euroins Romania case which Members of the European Parliament (MEPs), have been following for years.
The case also demonstrates the impunity that surrounds EU agencies, the lengths they will go to cover-up failures, their addiction to secrecy, their disrespect for democratic accountability and the harsh reality that, when they fail, the citizens of Europe are left to pick up the tab.
On 28th March 2023, EIOPA, the EU agency established to ensure consistent regulation across the EU’s insurance and occupational pension sectors, produced the report “Assessment of the Gross-to-net Technical Provision of Euroins Romania in MTPL.”
In an astonishing example of the doublespeak that is a hallmark of the EU’s bureaucracy, EIOPA labelled the assessment a “key public milestone” in its 2024 report on its activities in 2023. This “public milestone” was, rather absurdly, not made public. It was not released when it was completed, nor was it made available to Euroins.
With the support of the EU Commission, EIOPA was allowed to keep the report under wraps for three years from Members of the EU Parliament. Questions about the report tabled by MEPs from across the political spectrum were treated with contempt. Answers to questions were dismissive and occasionally dishonest. Responses were given after months of delay.
It emerged that not only was the European Parliament kept in the dark on the report but that the report had not been shared with the EU Commission. This would mean that the Commission had been answering questions for over two years on a report that it had not seen – a position that would not be tolerated in any self-respecting member State Parliament.
The Background.
In 2019 the Romanian Financial Supervisory Authority, ASF, requested that Euroins Romania – part of the Bulgarian-based Euroins Insurance Group (EIG), one of the largest independent insurance providers in Central, Eastern, and Southeastern Europe – take over City Insurance, then Romania’s largest motor insurance provider. Euroins felt that City was essentially bankrupt and declined. City Insurance shut down in 2021.
The refusal to comply with the ASF request did not go down well. It was followed by an unrelenting campaign during which ASF subjected Euroins to multiple sanctions and fines. The campaign culminated in February 2023 when ASF issued a report alleging that Euroins Romania failed to meet solvency and capital requirements. No such concerns had been expressed in previous ASF reviews, one of which had been published only four months earlier.
Euroins approached EIOPA requesting that it appoint an expert team to carry out an independent review – under the supervision of EIOPA – of the allegations made by ASF. That proposal was supported by Bulgaria’s Financial Supervision Commission (FSC) and by the European Bank for Reconstruction and Development (EBRD). EIOPA refused to accept the proposal.
EIOPA’s dismissal of a proposal strongly supported by EBRD is remarkable. EBRD, one of the largest institutional investors in Romania had invested €30 million in EIG in 2021 with the intention of “stabilizing (Romania’s) insurance sector”. Prior to its investment, EBRD appointed leading German auditors and insurance specialists to conduct a due diligence review of Euroins. In its contacts with EIOPA, EBRD pointed out that the due diligence showed no liquidity crisis in Euroins Romania. EBRD stated that if any problem existed or if additional capital was required both issues would be resolved.
Having chosen to conduct an internal review, EIOPA chose to exclude Euroins from the review process. Bizarrely, when the report was completed, Euroins was denied access on the basis that it was confidential and EIOPA was bound by its ‘professional secrecy obligation’.
Questionable Judgement and Double Standards.
While Euroins was excluded, ASF was involved at every level in the preparation of EIOPA’s assessment. ASF provided the material on which the assessment was based. ASF had full access to the report as it was being finalised. It abused that access, leaking parts which supported its position to Romanian media. These leaks were followed by a public briefing in which the ASF director detailed selective findings of the EIOPA report. EIOPA took no public action against this breech.
EIOPA also gave ASF permission to use material from its report in the Bucharest Court that was hearing an appeal from Euroins against the removal of its operating license, a decision that impeded the company’s capacity to defend its position during important court proceedings.
Mired in Scandals
In acting as it did, EIOPA effectively put itself into the hands of ASF, an agency with a very chequered history that has been rocked by operational failures and scandals since its foundation. In 2014, the year after its establishment, the agency was heavily criticised following the collapse of Harinvest brokerage. The following year, it was in the spotlight over the collapse of Astra Asigurări, a major insurance operator. In 2016, Carpatica Asig, another important insurer collapsed. This was followed by the collapse of City Insurance in 2021. Critics argued that ASF had allowed City to operate for years despite visible public weaknesses.
Less than a year after his appointment the first President of ASF was arrested on a series of allegations including charges of influence peddling and favouring a criminal ring. The charges were later dismissed. The appointment of the second ASF President was revoked by the Romanian Parliament.
Attacks about nepotism, political appointments, high salaries, excessive bonus payments to senior staff and inflated expenses have been another feature of the ASF backstory. ASF officials have also been accused of links with auto repair shop ‘cartels’ whose corrupt practices have been responsible for much of the chaos in Romania’s motor insurance industry.
EIOPA’s Secret Report Unveiled
On 20th March 2026, three years after its completion, EIOPA uploaded its assessment of Euroins to its website. No explanation for the three-year delay in releasing the report was given.
A basic read through of the report raises questions on two significant issues: its analysis of Euroins reinsurance arrangements – a major point of contention between ASF and Euroins – and its examination of technical provisions / insurance liability.
As is common practice across the EU, Euroins Romania operated quota share, a type of proportional reinsurance, aimed at mitigating risk. The validity of Euroins’ reinsurance contracts was confirmed by a review carried-out by ASF and EIOPA in 2021.
Days before launching its move against Euroins Romania in February 2023, ASF radically altered its position on reinsurance. It decided that such arrangements were no longer acceptable. ASF made the policy switch without consultation or a transition period. In effect ASF retrospectively rewrote the reinsurance rules – a breach of EU norms which generally prohibit the retroactive or retrospective application of legislation.
Euroins took immediate steps to revise its reinsurance arrangements to comply with ASF’s revised policy; its efforts were ignored.
EIOPA – which has long been hostile to quota share – chose to overlook the fact that ASF’s reinsurance policy switch had been introduced retrospectively without consultation or a transition period. This had a distorting impact on EIOPA’s assessment of Euroins Romania, equivalent to an undervaluation of its assets of the order of EUR 250 and EUR 300 million.
That is not the only distortion in EIOPA’s assessment. Under Romanian regulations, delays in the settlement of claims beyond 30 days attracted a penalty of 0.02% per day – the equivalent of 73% per annum, a very significant charge on insurers not meeting settlement targets. In 2021, Euroins Romania took on average 35 days to settle a claim. By the Spring of 2023 the average claim was being settled in 7 days. The data used by EIOPA does not reflect this striking improvement. As a result, EIOPA’s analysis fails to account for savings of tens of € millions, again significantly distorting its assessment.
Critics of EIOPA’s analysis also make the point that in the three years that have passed since Euroins Romania was forced to shut down, data regarding insurance claims settled strongly suggest that figures in EIOPA’s March 2023 assessment were significantly off the mark and that settlements made to date align more closely with projections by Euroins Romania in 2023 than they do with EIOPA’s analysis.
Little Accountability, Lots of Consequences
The decision to remove the operating license of Euroins Romania came with real-world costs. Millions of policyholders and shareholders were impacted, staff lost their jobs. Romania’s Insurance Guarantee Fund, already stretched by the failure of multiple insurance operators, was stretched even further. The departure of Euroins also meant less competition, triggering a rise in insurance costs. Efforts by Romania to cap and freeze third party motor insurance premiums ran into difficulties.
There is another very significant potential cost in the offing. Eurohold Bulgaria AD and Euroins Insurance Group (EIG) have initiated arbitration against Romania at the International Centre for Settlement of Investment Disputes seeking over €500 million in damages in June 2024. In November last year, ICSID dismissed an appeal from the Romanian Government to terminate the arbitration, and the case is now progressing with settlement likely towards the end of 2027.
The Euroins case demonstrates that when EU institutions fail, the public picks up the tab. While the EU preaches about transparency, the Commission and EU oversight agencies consider themselves beyond reproach and feel emboldened to block the EU Parliament’s attempts at scrutiny.
Fundamental questions about accountability now surround an institution that recently donned a huge “Democracy” banner at its Brussels headquarters. The scandalous lack of respect shown to members of the EU Parliament – the people mandated by the citizens of Europe to represent their interests and launch inquiries on their behalf – begs the question: How does the Commission interpret that word?
Siebert Droese MEP is a Member of the EU Parliament Committee on Economic and Monetary Affairs
