New regulation to halve brokers’ car insurance business

The likely decline is caused by a new regulation issued by the Insurance Supervisory Commission (CSA) which, among others, is limiting fees paid by insurance companies to brokers to 15 percent of the premium. According to Andriescu, the new regulation should already be in effect. “We asked CSA to postpone the enforcement date, so both insurance companies and brokers can organize their operations,” he said. Of the total mandatory car insurances market, brokers intermediated some 20 percent of the total premiums subscribed, Andriescu said. With the new regulations, however, brokers’ business “could be reduced significantly, they could even halve,” he added.

However, the 15 percent fee limitation could be avoided by both brokers and insurers through additional services and consultancy contracts. In the first nine months of 2008, insurance companies registered €1.1 billion in subscribed premiums for car insurances.
Data for the insurance brokerage market for the first nine months of 2008 is not available so far. However, at the end of H1, UNSICAR members registered some €50 million in intermediated premiums for auto liability insurances.