Marius BULUGEA: PAID will underwrite exclusively online!
 The Pool of Insurance Against Natural Disasters (PAID) will issue the policies only electronically, on the MTPL insurance model. "Companies that do not have an online underwritings system in the territory will be able to conclude these policies at the insurers' offices in county capitals", said Marius BULUGEA, President of PAID.
Meanwhile, the reinsurance contract is finalized and it will be signed these days. Payment of the reinsurance premiums will be made by PAID, as, for the moment, the loan guaranteed by the Ministry of Finance has been renounced at, due to budgetary restrictions.
"Given the complexity of this contract, reinsurance negotiation lasted 3 months; it will be signed these days and placed, through brokers WILLIS, AON-Benfield, GUY Carpenter and STELLAR Re, at top global reinsurers", said Marius BULUGEA.
"Own retention of PAID will amount to several hundred thousand EUR, an insignificant amount considering the extent of the reinsurance contract", said the President of PAID.
Recent data shows, however, that for the first year of functioning of PAID, it is estimated a penetration rate of 20% of mandatory household insurance, which means a substantial reduction of the costs for reinsurance.
According to the law, all house owners will have to insure their homes against the risks of floods, earthquakes and landslides. They will pay EUR 10 or EUR 20 for a maximum compensation of EUR 20,000. Not complying to the obligation to insure their households, as provided by law, constitutes a contravention, and will be punished with fine from RON 100 to RON 500.
PAID was created in September 2009 by 13 insurance companies, out of which 4 own each the maximum stake allowed by law, respectively 15%, the other nine founding members participating each with the minimum amount of EUR 250,000, with a share of 5.5% of the total share capital of PAID. The share capital of PAID rises at this moment to RON 19,341,819 (EUR 4.545 million).
Author: Oleg DORONCEANU
on 06.07.2010
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