Confederation of Authorized Operators and Transporters from Romania (COTAR) requests the Government to “urgently” trigger the modification of the Fiscal Code applicable to the insurance market in Romania and “to study the German model” in this regard.
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“Just as today we see that multinationals in the insurance market pay ridiculously low taxes in Romania, it also happened in Germany 20 years ago. As the multinationals took over the model from Germany, to apply it in Romania, the Romanian Government should do the same, taking over the solutions from the German Government.
Germany represents a model regarding the level of tax collection, a level that the Romanian state can only dream of. Insurance companies in Germany pay special taxes to the German state of 19%, in addition to operating taxes and payroll taxes. Why did the German state introduce these special taxes to insurance companies? Because 20 years ago, the same insurance companies that today sell RCA in Romania and declare themselves forever at a loss or with ridiculously low profits, cheated the German state with the same strategies.
“The solution to covering the huge budget deficit is not solved by increasing the taxes of micro-enterprises, while the multinationals pay derisory taxes and fees in the country where they register, in reality, the biggest profits of the group. The Romanian government can learn from the experience of other states that were cheated by the same insurance multinationals in the same way. In Germany, the 19% tax applied to the RCA insurance product cannot be deducted, as it is not a VAT”, explained Vasile Ștefănescu, president of COTAR.
If the Romanian state wants to collect more money for the budget, we must improve our legislation, and the starting point is the amendment of the Fiscal Code, so that the insurance companies (whose appetite for increasing the RCA price can only be kept in check with successive price cap ordinances of this product) to pay taxes for the billions of euros collected by drivers forced to buy them the luxury but mandatory product called RCA.
The insurance companies were already preparing price increases (as unjustified as those of the last 3 years), when they learned that the Romanian Government would continue to cap the RCA price. They released new disinformation, claiming that it is impossible to pay the compensations that would be increasing. The truth is completely different and we find it in the latest report published by ASF on the insurance market.
In the report we find the evolution of the current frequency of damage in Romania:
Year 2018: 6.4%
Year 2019: 6.5%
Year 2020: 5.3%
Year 2021: 5.8%
Year 2022: 4.7%
This means that the number of accidents in Romania is decreasing, a situation confirmed in the same report, by the decrease in the number of claim files opened on RCA by insurance companies:
Year 2018: 369,976 RCA claim files
Year 2019: 400,358 RCA claim files
Year 2020: 338,038 RCA claim files
Year 2021: 388,935 RCA claim files
Year 2022: 341,470 RCA claim files
The latest report published by ASF shows that the damage rate for the RCA product was, in the first 9 months of 2023, 97.68%, a substantial improvement being observed, compared to previous years, as follows:
2023: 97.68%
2022: 107.29%
2021: 131.94%
This means that the RCA product is a profitable one for insurance companies at the level of the current so-called capped RCA rates.
We present 5 RCA offers from March 2024 for trucks, so that the comparison can be made:
Offer 1. Class B2 vehicle (10% discount): minimum RCA tariff 13,940 lei, maximum tariff 84,913 lei, average tariff 28,507 lei, reference tariff 7,748 lei.
Offer 2. Class B0 vehicle. Maximum RCA tariff 83,002 lei, minimum tariff 11,444 lei, reference tariff 8,609 lei.
Offer 3. Class B2 vehicle (10% discount). Maximum RCA tariff 82,415 lei, minimum tariff 13,478 lei, average tariff 28,545 lei, reference tariff 8,178 lei.
Offer 4. Class B0 vehicle. Maximum rate 81,202 lei, minimum rate 11,652, average rate 23,708 lei, reference rate 8,609 lei.
Offer 5. Class B1 vehicle (5% discount) Maximum RCA tariff 71,751 lei, minimum tariff 12,421 lei, average tariff 27,145 lei, reference tariff 8,178 lei.
It is important to remember that in the calculation of the reference rate published by the ASF, all the expenses of the insurance companies are included plus a percentage of 5% profit for the insurance company. The difference between the reference rate and the actual selling RCA rate is the mirror of the greed of the insurance companies protected by the Financial Supervisory Authority.
It can be easily observed that between the average RCA tariff offered by insurance companies and the RCA reference tariff published by ASF there are differences of almost 20,000 lei. More precisely, the average RCA sales tariff is more than 3 times higher than the reference tariff”.
“We are tired of being lied to by insurance companies, which is why we request the Government to urgently amend the Fiscal Code, so that those who today lie to us that they are in loss pay the tax due in the country where they made the profit . The government should let the SMEs “breathe” and have the courage to properly tax the multinationals that have been defrauding the Romanian state for 20 years, as they have done with the German state”, said Vasile Ștefănescu, president of COTAR.”
