Doru FRUNZULICA, ISC: We must go from having potential to capitalizing on it, while conducting a differentiated supervision based on intermediation volume

21 May 2012 —
doru_frunzulica1"FIAR is a tradition that we should all foster in order to help the market grow. The new ISC Board has brought a new vision that you could see in the meetings with the brokers from Romania that we have had to date. The idea is to upgrade the insurance market from Romania. We need to move from having potential to actually capitalizing on it. We need to balance the market, upgrade the secondary legislation so as to benefit the brokers and the overall market and the ISC has already started to amend certain regulations", stated Doru FRUNZULICA, ISC Board Member, at the opening of the Brokers' Day at FIAR 2012.

"We must shift to proportional supervision and go from "conformity-based" to "prudential" supervision, in line with the interests of the market and of the insured customers. We also need to implement the future European regulation in Romania, especially those related to Solvency II", added the ISC official.

As for proportional supervision, it has to be conducted at two different levels, according to the intermediation volume. It will be a simplified supervision system, so that everyone exceeding a certain level of business, for instance Top 10 brokers, is subject to a different supervision and control system.

According to official data published by ISC, 590 insurance brokers operated on the mediation market in the first quarter of this year, with a total turnover of RON 818.8 million, up 7.0% compared to the premiums intermediated in Q1 2011. RON 792.3 million out of this amount represented non-life insurance intermediation and RON 26.5 million was the value for life insurance mediations. When comparing the mediated premiums volume to the total underwritings volume in the first three months, namely RON 2.167 billion, we see that brokers intermediated 37.8% of the total market.

Higher premiums mediated by insurance brokers resulted in a higher value of the income they obtained from brokerage activity, namely RON 164 million at the end of March, 10.17% more than in Q1 2011. The income from negotiating insurance contracts accounts for 96.5% of this amount, namely RON 158.2 million, 9.8% more than the same period of last year.

Doru FRUNZULICA said that the brokers operating on the Romanian market should consider getting more income from risk inspections and claims settlement, which amounted to only RON 5.8 million in the first quarter, namely 3.5% of the total income.

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