ECONOMY

Papathanassiou says some private insurers will have to mend their sinful ways

Deputy Development Minister Yiannis Papathanassiou says he is determined to set things straight in the private insurance sector and will not hesitate to revoke the licenses of firms that do not meet the legal requirements. The assessment of insurance firms and the renewal of their solvency certificates, in the framework of the ministry’s ongoing annual review, will be done on the basis of irreproachable procedures and will avoid past mistakes, as when his predecessors would invite firms that had just obtained such certificates to pay up additional funds in order to bring their capital up to the required level, he insists. «There is no reason to perpetuate the sins of the past,» he told Kathimerini. Papathanassiou says his work is made easier by the now clear direction for setting the industry on a healthy footing, suggesting a type of inventory that will not be subject to disputes or misinterpretations. He makes it clear that the annual review will be completed as scheduled by the end of October and solvency certificates will be granted with only marginal delay, if at all. However, he insists that the ministry’s initiative will not be exhausted there, as the auditing procedure will continue and concern the analytical cross-checking of balance sheet data of all firms. This will be followed by a sample check in all firms that are thought to diverge from the market norm as regards the adequacy of reserves. The job of the ministry will be aided by external advisers that will be hired by the Development Ministry for that specific purpose. Papathanassiou believes that these initiatives constitute a comprehensive form of intervention for the rationalization of the industry, on the basis of strict measures against those firms that violate the rules. He is categorical that such firms will either be called on to draw up a program of rehabilitation, which will be closely monitored, or face the possibility of having their licenses revoked. A crucial factor for the smooth functioning of the market is the speeding up of the legislative work regarding liquidations and the harmonization to the EU directive concerning insurance intermediaries. The relevant committees are expected to roll up their sleeves in a matter of days. An equally important issue regards the setting up of the new authority to oversee the insurance industry. The initiative here belongs to the Economy and Finance Ministry, which, according to sources, is in search of someone to take the helm.