ECONOMY

Gov’t promises to get tough with rogue insurance firms

Insurance companies shirking their obligations to clients for more than 30 days will have their licenses revoked, Deputy Development Minister Yiannis Papathanassiou warned yesterday, adding that the ministry’s inspections to date have found deficits in insurance companies exceeding 300 million euros. «These are companies using their reserves for debt servicing or other past obligations, instead of paying compensations as they have to,» said Papathanassiou during an event organized by the Association of Insurance Companies Greece to mark the first «private insurance day.» According to sources, there are five companies causing a wave of complaints, amid a general climate of concern about the sector. The monitoring of those cases has revealed unacceptable delays in compensation payouts to such an extent that the ministry will send certain insurers to the Private Insurance Commission, which could close them down. The license issue is not related to the auditing concerning companies’ solvency margins. Papathanassiou revealed that out of the 300 million euros of deficits only half is about to be paid by companies. «The auditing procedure will end in the next few days and the ministry will then make announcements,» he stated. General Secretary for Consumers Athanassios Skordas said that delays in compensation payments are seen across all insurance sectors, although «most allegations refer to car insurance compensations, followed by complaints about rises in health programs.» The recently passed regulation imposing a 60,000-euro fine on any life insurer not paying within 30 days the amount owed to clients liquidating their contracts is go into immediate effect. «The government is determined to protect consumers from insolvent companies,» Papathanassiou promised, committing himself on the universal and not selective application of the law. He made it clear that the method of auditing insurance companies has changed and ignores what each company declares; auditors carry out independent checks and ask for remedial measures for each company separately, depending on the size and sort of problem it faces. Already, insurers have increased their minimum capital above the levels required by the European Union.