UPDATE: New findings suggest Olympic Insurance was already bankrupt in 2015

The Cypriot Auditor General Odysseas MICHAELIDES claimed that his office had spotted Olympic's insolvency issues during a 2014 audit. Yet, the situation broke out only four years later, when the company went bankrupt leaving some 200,000 clients uninsured.

He did not comment on whether the red flags were brought to the attention of financial authorities, but he did say Olympic would have trouble complying with EU directive Solvency II, which required a minimum solvency capital of EUR 30.7 million. The directive came into force in 2016, when Olympic's equity was already at EUR 31.5 million. Between 2015 and 2016 the company's liabilities rose from EUR 34.6 million to EUR 47.1 million.

Bulgaria and Cyprus continue to negotiate how to pay the EUR 43.5 million Olympic owes in insurance claims. Cypriot Financial Ombudsman Pavlos Ioannou reported that he received a letter from a Bulgarian official last week, requesting that Cyprus cover the EUR 28.5 million in damages owed to Bulgarian claimants.

A Bulgarian Commissioner said last Friday that former deputy chair of the Financial Supervision Commission (KFN), Ralitsa AGAIN-GURI, who resigned from her post after pressure from the Bulgarian government, was not at fault for the events following the bankruptcy of Olympic, which operated under the supervision of the Cypriot financial supervisory headed by Victoria NATAR.

The owner of Olympic's parent company, Spanish citizen Diego GONZALEZ, was named in a June 2015 statement issued by Spain's financial supervisory Comision Nacional del Mercado de Valores (CNMV), with a warning that GONZALEZ'S New York Securities Bank was not licensed to provide insurance services and additionally, he was prohibited from dealing in foreign currency.

Nevertheless, seven months later in 2016, the financial supervisory in Cyprus neglected to consider this information, and GONZALEZ was allowed to buy all shares of Olympic Insurance, totaling almost EUR 8 million. He then increased the remuneration of directors and management to EUR 203,831 from EUR 94,939 in 2015.

Due to this oversight on the side of Cypriot officials, it is likely they will be the one to foot the bill. The Cypriot Motor Insurance Fund, an emergency fund set up by insurance companies to underwrite claims in the case of insolvency, may be used to pay claims from Bulgarian clients of Olympic. The load will fall on the shoulders of Cypriot car owners, who may be forced to pay a 5% surcharge on insurance premiums from now on.


Follow XPRIMM Publications on LinkedIn, for more data on the insurance and financial industry.

Share |

Related articles

Cypriot biggest life insurer appointed new CEO

At the beginning of June, UNIVERSAL Life - the Cypriot largest life insurer announced that its Board of Directors has decided to appoint Evan GAVAS as the new CEO - Chief Executive Officer of the Company.

2018-06-25

STATISTICS: CYPRIOT insurers' Q1 GWP up by 6.5% y-o-y

Cypriot insurers reported aggregate GWP of EUR 234.4 million in the first three months of 2017, up by 6.5% y-o-y, according to the quarterly market figures published by the Insurance Association of Cyprus - IAC.

2017-06-22

STATISTICS: CYPRUS, 3Q: The GWP growth-rate was supported by both market segments

According to the quarterly report on insurers' performance published by the Insurance Association of Cyprus (IAC), at the end of September 2016 the local insurance industry totaled EUR 565 million in GWP, up by 2.7% y-o-y. Per business segments, the value of life GWP was up by 3.3% y-o-y to EUR 235.7 million, while the non-life insurers generated a volume of EUR 329.4 million (approximately 58.3% of the total premiums), up by 2.4% y-o-y.

2016-12-08

ON THE MOVE

Public insurers appoint Achim Bosch to reinsurer board

The supervisory bodies of Deutsche Ruckversicherung AG and the Association of German Public Insurers decided today, to appoint Achim Bosch (53) to the executive board of the two reinsurers, where he will be responsible for non-life reinsurance.

11.10.2018

TOP EVENT

Five new XPRIMM insurance reports to be launched in Baden Baden

Five new titles will be available this year on the XPRIMM Baden-Baden press stands opened in the Kurhaus Casino and in Baden Baden main locations, presenting the latest statistical data and comprehensive analysis for the CEE, SEE and CIS insurance markets.

11.10.2018

Croatian Insurance Days 2018 - Registration opened online

The 2018 edition of the "Croatian Insurance Days" will be held in Opatija, Croatia, on November 7-9, 2018. Organized by the Croatian Insurance Bureau, with the support of the Croatian Ministry of Finance, the conference will have, as usual, a rich and very informative program, also providing for extended networking opportunities.

11.10.2018

ICAR Forum 2018: Main conclusions

The 15th edition of ICAR - The International Catastrophic Risks Forum, taking place in Bucharest, Romania, on 9 October, touches issues of paramount concern.

09.10.2018

The 10th International Istanbul Insurance Conference started today

In emerging markets like Turkey, there can be a significant difference between insured and total insurable losses.
Focusing on closing the protection gap, the 10th International Istanbul Insurance Conference gathers in Istanbul, between the 4th and the 5th of October 2018, well-known speakers from Turkish and the global insurance & reinsurance markets.

04.10.2018

photodune-3834701-laughing-girl-xs

LIVE: 1st National Reinsurers Summit in Moscow: focus on global cooperation

Today has started in Moscow the 1st National Reinsurers Summit "National Reinsurers: Focus on global cooperation". Organized by the Russian National Reinsurance Company (RNRC) with the support of the Central Bank of the Russian Federation, the conference has the xprimm.com insurance portal as Media Partner.

20.09.2018

See all