Insurance companies are inadequately controlled according to what the Auditor General of the Republic Odysseas Michaelides noted in the annual report for 2014, adding that estimates about their reserves are based on overvalued real estate.
According to the manual of the insurance supervisory authority, a site control should be conducted at least every three years at insurance companies. In 2014 a site control was conducted only at 5 out of 33 insurance companies.
Moreover, based on data the auditor received by the supervisory authority, a site control has never been conducted at 6 insurance companies while the last check for three insurance companies was in 2009 and for another one in 2008.
In addition, there was a case where, although the site check conducted in 2012 revealed several problems, some of which were considered of high risk, another site check was never conducted in the next two years or was scheduled to be conducted until completion of the audit service’s work.
The auditor's report is a slap in the face for the supervision of the insurance industry, which went through the great financial and banking crisis without major losses.
The supervision of the industry falls under the finance ministry's insurance companies audit department.
Assets also inadequately checked
Apart from the inadequate audit control, the auditor found that a revaluation of buildings and land used for the formation of technical reserves and solvency margin has not been performed.
"In our sample control based on values of the Land Registry (1.1.2013 values), it was found that there were no significant differences. However, we expressed the view that, taking into account official property price indices for 2013 and 2014, maybe in many cases, there should have been reductions in the values of buildings and land of around 10-15% per year, respectively" as noted in the report.
Suitability of directors
The Auditor General notes that an amendment to the legislation to empower the Registrar to remove, even temporarily, until trial, CEOs in cases their reputation is affected, especially after serious accusations and fines from other supervisory authorities, should be immediately considered.
The suitability of directors should also be checked at regular intervals as noted, so that, relevant measures are taken on time, as appropriate.
"The need to monitor the suitability of directors on a regular basis is supported by the fact that, during our audit we identified two cases of directors, who face serious charges, following inquiries carried out by two other supervisors, one of whom is in Cyprus and the other in Greece. The two cases have not come to the court yet, " he emphasized.
According to data provided, total insurance premiums received by insurance companies in 2014 amounted to € 906,9 mn. (2013: € 933,6 mn), which represents 5.69% of GDP (2013: 5.66%).
According to the manual of the insurance supervisory authority, a site control should be conducted at least every three years at insurance companies. In 2014 a site control was conducted only at 5 out of 33 insurance companies.
Moreover, based on data the auditor received by the supervisory authority, a site control has never been conducted at 6 insurance companies while the last check for three insurance companies was in 2009 and for another one in 2008.
In addition, there was a case where, although the site check conducted in 2012 revealed several problems, some of which were considered of high risk, another site check was never conducted in the next two years or was scheduled to be conducted until completion of the audit service’s work.
The auditor's report is a slap in the face for the supervision of the insurance industry, which went through the great financial and banking crisis without major losses.
The supervision of the industry falls under the finance ministry's insurance companies audit department.
Assets also inadequately checked
Apart from the inadequate audit control, the auditor found that a revaluation of buildings and land used for the formation of technical reserves and solvency margin has not been performed.
"In our sample control based on values of the Land Registry (1.1.2013 values), it was found that there were no significant differences. However, we expressed the view that, taking into account official property price indices for 2013 and 2014, maybe in many cases, there should have been reductions in the values of buildings and land of around 10-15% per year, respectively" as noted in the report.
Suitability of directors
The Auditor General notes that an amendment to the legislation to empower the Registrar to remove, even temporarily, until trial, CEOs in cases their reputation is affected, especially after serious accusations and fines from other supervisory authorities, should be immediately considered.
The suitability of directors should also be checked at regular intervals as noted, so that, relevant measures are taken on time, as appropriate.
"The need to monitor the suitability of directors on a regular basis is supported by the fact that, during our audit we identified two cases of directors, who face serious charges, following inquiries carried out by two other supervisors, one of whom is in Cyprus and the other in Greece. The two cases have not come to the court yet, " he emphasized.
According to data provided, total insurance premiums received by insurance companies in 2014 amounted to € 906,9 mn. (2013: € 933,6 mn), which represents 5.69% of GDP (2013: 5.66%).
3287.99
1275.09
