Five insurance firms closed down

Five Greek insurance companies had their licenses suspended yesterday by the country’s regulator for private insurance companies, in a decision affecting more than a million policy holders. The board of the Supervisory Commission for Private Insurance revoked the licenses of Aspis Pronia General Insurance Company, Aspis Pronia Life Insurance, General Union, General Trust and Skourtis because they didn’t meet the minimum requirements for liquidity. «The commission exhausted all potential for solving the problem by repeatedly offering the companies the opportunity to meet liquidity requirements,» said a statement from the regulators. «Despite this, the companies appear to be unable to fulfill their obligations toward their customers and staff.» Car owners insured with one of the five firms forced to shut down will be covered for a month by an auxiliary fund, the regulator said, without providing any further details. The companies will continue to hold life insurance contracts, under the management of a government-appointed supervisor, until the product portfolios are sold on to another insurance company. Industry sources estimate that 1.2 million people hold some form of insurance policy with the five firms. The decision has also resulted in the involvement of a prosecutor after the president of Aspis Pronia, Pavlos Psomiadis, tried to solve his company’s liquidity problems by presenting the regulator with a 550-million-euro check – that bounced. In response to news of the closure, Aspis said in a statement yesterday that the regulator had made its decision even though the company had recently completed a share capital increase and had improved its capital base. «The decision was made by the regulator despite that fact that it had been asked for an extension of a few days until the end of September,» it said, adding that it will appeal the decision.