Romania’s financial system supervisor ASF has put the country's largest insurer Astra under special administration, which should work on its financial recovery, Ziarul Financiar daily informed, quoting an ASF statement. KPMG Advisory was appointed as Astra’s manager.

The legal rights of Astra’s shareholders were suspended for the entire period of the financial recovery by the special administration, the statement reads. Astra is controlled by local investor Dan Adamescu, who announced plans to ask the court to invalidate ASF’s move.

A couple of weeks earlier, news agency Mediafax informed that ASF believes Astra underestimates the potential expenditures resulted from its insurance contracts with the purpose of building lower reserves. Astra’s reserves would reportedly be 40%, which is RON 100mn [EUR 22.5mn] lower than required, the news agency reported at the time.

KPMG will initiate under emergency procedures a capital increase that would allow Astra to meet the statutory capital adequacy requirements. For this, KPMG will first evaluate the possible expenditures generated by Astra’s insurance contracts.

Separately, KPMG will take the necessary steps in order to recover the loans extended by Astra to other companies in the larger group that includes the insurer.

Astra’s owner Adamescu has accused ASF of political bias and underlined the negative impact of the move. There were no prior warnings in regard to Astra’s insufficient reserves or suspected undervaluation of expenditures, Adamescu told an ad-hoc press conference. Furthermore, Astra has reportedly already requested ASF’s permission for a capital increase – but no green light was provided so far.

Adamescu claims that ASF bars Astra’s taking over the local operations of AXA – a move that would help Astra strengthen its position and financial situation [capital adequacy ratio].