Cyprus Mail
Business Cyprus

House to investigate collapse of Olympic Insurance

The insurance superintendent controls around 30 insurance companies based in Cyprus, the chairman of the House ethics committee, Zacharias Zachariou, said on Wednesday as the committee met to discuss the fallout of the collapse of Olympic Insurance last month.

Other companies operating in Cyprus have their headquarters in another European country and are not controlled by the official, MPs were told.

MPs were discussing how possible bankruptcies of insurance companies affect their policyholders, following the liquidation of the Cyprus company which left 200,000 policyholders in Bulgaria with no coverage.

Zachariou said that the turnover of the insurance companies, controlled in Cyprus, is around €930m while these companies’ assets are around €4bn.

Their turnover accounts for three to four per cent of the GDP and is very important, Zachariou said.

The problems of such a company’s clients are the responsibility of the financial ombudsman with the Consumer Protection Service of the commerce ministry and future House discussions will involve officials from these departments he said.

MPs will look into whether policyholders receive adequate information as regards their insurance contracts, how companies operate when they must pay indemnities, but also if there is transparency and clear rules as regards these payments.

As regards Olympic Insurance, Zachariou said that they discussed whether the company’s funds, shareholders and solvency had been audited. The insurance superintendent’s opinion, he said, was that they had taken all the necessary steps provided by the law and eventually had to close down the company in order not to increase the damage. This issue will be discussed by the House watchdog committee, he said.

Akel MP, Aristos Damianou said that one most important issue was how exposed Cypriots are from the bankruptcy of the company.

“The Cypriot public has suffered from this case and some have to be accountable, beyond the company itself,” he said.
Greens’ MP, Giorgos Perdikis said that it must be ensured that no Cypriot policyholder of an insurance company registered in Cyprus will find themselves high and dry.

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