Reinsurance for AOL - the latest stake for the international market
 The Management Board of PAID, the company that will issue mandatory household insurance policies, is still negotiating the structure of the reinsurance program of the future portfolio and a decision in this regard is to be taken soon.
MUNICH Re and SWISS Re, leaders of the international reinsurance market, are among the favorites and the program is to be placed, most likely, by the brokers AON-Benfield, WILLIS and GUY Carpenter, sources close to the transaction said. However, specialists estimate that only renowned multinational companies will participate at the reinsurance placement program.
Reinsurance premiums payment will be made, most likely, by the shareholders of PAID, although, according to the law, it should have been done in the first year of functioning through a loan guaranteed by the Ministry of Finance.
"Given the current budgetary constraints, under the circumstances in which the state would not be willing to support the payment of the reinsurance program, we analyze the possibility that the payment of the premiums be made echeloned by companies members of PAID on their own", said yesterday Stefan DICU, Member of the Management Board of PAID and Deputy General Manager of the insurer GROUPAMA.
Although the value of reinsurance premiums was not revealed by representatives of PAID, last year's negotiations were advancing the sum of EUR 120 million for an 80% penetration rate of mandatory household insurance. However, recent information shows that, for the first year of functioning of PAID, a 20% penetration rate of mandatory household insurance is estimated, which means a substantial reduction of reinsurance ceding costs.
PAID could begin to issue mandatory policies starting this autumn.
"We want to start issuing policies before January 1, 2011", said last week Marius BULUGEA, President and General Manager of the institution.
Author: Mihaela CIRCU, Alexandru CIUNCAN
on 14.05.2010
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