The Government decrees measures to guarantee the rights of Assegurances Generals' non-life and risk-life policies

AGA

15/10/2019

The Government decrees measures to help mitigate the effects of the financial hardship on the non-life and life-risk business of Assegurances Generals, SA. The Decree, approved by the Government in an extraordinary session published today in the BOPA, aims to promote a program of aids, once the deficiencies of Assegurances Generals, SA in their obligations have been identified, in order to ensure that non-life and life-risk policy holders of this entity have their rights duly secured until the expiration of their policies. Government aid must also provide the liquidity not available at the institution for these purposes.

As the Minister of Finance and Spokesman, Eric Jover, explained in a press conference, the aid will be granted to Andorran insurance companies participating in the Assegurances Generals, SA’s contingency plan for non-life and life-risk insurance policies.

The Head of Finance and Spokesman, Eric Jover, and the CEO of the Andorran Financial Authority (AFA), as the supervisory and controlling body of the insurance and reinsurance market of the Principality of Andorra, pointed out that this aid programme is being developed with the aim of paying the costs incurred by Andorran insurance companies for participating in the Assegurances Generals SA policies risk absorbing programme, and in order to protect the public interest and to safeguard the stability and reputation of the Andorran insurance and reinsurance system and to promote confidence within the system. The insurance company is itself responsible for the recovery of these amounts when sufficient liquidity is available.

Thus, the amount of the Government subsidy to the Andorran insurance companies participating in this aid programme is of a maximum of 1,550,000 euros. This sum has been provided on aggregated basis by the AFA according to market price data provided by the Andorran insurance companies participating in this aid programme. In addition, the Government guarantees an amount of 1,450,000 euros in order to anticipate possible contingencies in the instalment payments of non-life and life-risk insurance, as well as a compensation fund. This amount also includes the possibility of absorbing the risks arising from other types of policies in the same field not foreseen in the first line of aid.

As explained by the AFA CEO, Ramón López, last 16 August, the Andorran Financial Authority replaced, as a special control measure, the administrative body of Assegurances Generals, SA and appointed a special administrator. This measure was carried out on the basis of indications that the insurance company was in a situation of financial difficulty.

Nowadays, due to its financial situation, Assegurances Generals, SA cannot assume the obligations arising from the non-life and life-risk products which are under contract and in force. For this reason, taking into account the current Andorran legal framework, the Government, in coordination with the AFA, Assegurances Generals, SA, and the insurance sector, has decided to develop a contingency plan with the aim of ensuring that non-life and life-risk policy holders have their rights duly secured until the expiry of their policies.

Check the Decree

Source: Andorran Financial Authority / Government of Andorra