Drivers threaten protests: RCA compensation drops to 20%. The rules are changing in parliament with a political hand guided by the ASF

A bill that would change the rules applicable to RCA (compulsory motor liability insurance) would reduce the amounts paid by insurers from RCA proceeds and promote repairs at the insurance company’s partner services, complains in an open letter, addressed to the government and the European Union, the Confederation of Authorized Operators and Transporters from Romania (COTAR). The organization points out that amendments were introduced to the project by a parliamentary group that it does not name, which abusively limit the amounts owed to insurance consumers, suggesting that it would be an interested action by insurers, with the support of the ASF, led by Alexandru Petrescu , supported by PSD.

The confederation requests, in an open letter, the national and European Union authorities to stop a legislative project in the Chamber of Deputies, threatening protests.

“During the period when public attention was focused on the preparation of the Easter holidays, it seems that the insurance companies increased their efforts and managed to convince a group of deputies to propose certain abusive amendments to a draft law (Plx. no. 216/ 2024), which will amend RCA law no. 132/2017, and which impermissibly limits the rights of the 10 million Romanian drivers and vehicle owners in Romania”says COTAR in the letter.

They continue that through these legislative proposals, the compensation expenses of the insurance companies will decrease from about 35% as they are currently, to about 20%. Under these conditions, if currently, out of 100 lei collected by insurance companies from the sale of RCA, only 35 lei actually represent compensation payments, these compensation costs will decrease to only 20 lei. The difference of 80 lei will be represented by the administrative expenses of the insurance companies plus their profit, the organization says

COTAR refers in the letter to the Financial Supervisory Authority (ASF), now led by Alexandru Petrescu, supported by the PSD, which it finds directly responsible for the resounding bankruptcies of the insurers Astra Asigurări, Carpatica, City Insurance and Euroins, repeated failures that threw the insurance market is collapsing. The organization draws the Government’s attention to the fact that the appointments of some members of the ASF management affect the representation of the public interest and the protection of the 10 million drivers.

The current law protects insurance consumers by establishing compensation principles that are applicable throughout the European Union. However, insurers systematically take advantage of the ASF’s indifference and do not respect their payment obligations in Romania, making payments only after they are obliged by the courts, writes COTAR, which emphasizes that over 90% of the lawsuits pending before the courts judgments are lost by the insurance companies, and they do not want to assume their payment obligations, but want to change the law, so that the injured RCA does not receive his compensation in full and on time and has increased difficulties in litigation.

Carrier representatives point out the main changes submitted by insurance companies to Plx. no. 216/2024, which seem to be assumed by the ASF and supported by an important parliamentary group:

1. Addition of Article 22.1, regarding “market prices/costs”. Through this article, RCA victims, innocent of the occurrence of an accident, will be obliged to bear a copayment out of his own pocket to cover the costs of repairs to the repair units, which is contrary to the principle of full damage repair and RCA insurance;

2. Amendment of Article 14 paragraph (3), so that the amount of compensation is established only by agreement between the insurer and the injured party. This amendment will oblige the injured party to accept any amount of compensation, even if it will not be sufficient to cover the costs of repairing the damaged vehicle to restore it to its pre-accident condition. This will have several unfavorable consequences for the injured party and vehicle owners in Romania:

• The repair will not be able to be carried out with original parts at the cost borne by the insurer, but only with after-market or second-hand parts that will fall within the limitations that will be imposed abusively by the insurers, as is currently the case in offers submitted by insurers for self-directed repair or in the case of carrying out repairs in the repair units with which the insurers have signed collaboration agreements. In this way, insurance companies want to maximize their profits, selling more and more expensive policies and paying even lower compensations than the current ones.
• The injured party will be obliged to go to a repair facility chosen by the insurer for repairs, thus being limited in his right to freely choose a repair facility that he trusts or that is closer to his home.
• The injured party will be obliged to accept non-compliant technical solutions that could be indicated by the insurer (for example, repairing a part and not replacing it, even if the mandatory legal solution to restore the vehicle to its pre-accident condition would be the replacement of that part).
• Since the damaged RCA will be able to repair his car only in the partner repair units of the insurance companies, they, taking advantage of the strengthening of the dominant position, will have the opportunity to introduce in the collaboration agreement of the partner repair units unrealistically low labor costs, low purchase costs of spare parts and reduced costs of purchasing paintwork materials of lower quality. Thus, the damaged RCA will be obliged to repair his car only in these partner repair units of the insurance companies, the customer not knowing about the many clauses unfavorable to him, existing in the collaboration contract between the insurance company and the partner car service.

Specifically, the insured will pay an exorbitant RCA policy and will have low cost repair services (dismantled parts, poor quality paint that does not meet the applicable standards and untrained mechanics who will repair the cars in improper conditions), says the organization.

COTAR publicly requests the following directly from the leaders of the governing Coalition: the reanalysis of the draft law Plx. no. 216/2024, the rejection of all abusive proposals, generated by the lobby of insurance companies, compliance with the national and European legal framework, the reorganization of the ASF and additional control of the insurance sector within the ASF by the Ministry of Finance.

The drivers’ leaders request the authorization of a protest rally in front of the Romanian Government. “As a representative organization for more than 50,000 companies that provide jobs for 1.5 million employees, but also out of respect for the approximately 10 million drivers, COTAR is forced to undertake all legal steps to achieve its mission of general interest , including publicly signaling the economic and social catastrophe that will be borne by Romanian citizens in the event of the adoption of these amendments to the RCA legislation, made exclusively to the detriment of citizens and to the benefit of insurance companies”, close COTAR.

The document is addressed to the President of the European Commission, Ursula Von der Leyen, the President of the European Parliament, Roberta Metsola, the European Commissioner for Transport, Adina Vălean, the Prime Minister of the Kingdom of Belgium (which holds the Presidency of the Council of the European Union), Alexander de Croo, the President of the Romanian Senate, Nicolae Ciucă, the interim president of the Chamber of Deputies, Alfred Simonis, and the prime minister, Marcel Ciolacu.