Hungary's financial market watchdog PSzÁF on Thursday told MTI it suspended vehicle insurance company Wabard Biztosítóo's right to sign contracts based on an investigation and data that the company had submitted for PSzÁF's review.
The suspension does not affect Wabard's existing contracts, PSzÁF said. PSzÁF also fined Wabard's CEO HUF 500,000.
PSzÁF ordered Wabard to make improvements to its risk management and regulatory systems by the end of the year. After the system has been revamped, Wabard must hire an independent auditor to assess the changes.
Wabard Biztosító was established by trucking magnate György Wáberer about a year ago after the insurer association that provided his fleet with mandatory vehicle insurance became the subject of an embezzlement investigation and was found to be short billions of forints.
The company's owners recently decided to raise capital by HUF 1 billion to just under HUF 3 billion as it signed more policies than expected, Econews reported earlier.
The company, which started business only last autumn, has signed 130,000 mandatory and comprehensive vehicle insurance policies, more than expected. It sees policy number rising to 150,000 by year-end.
Hungarian drivers may switch mandatory vehicle insurance providers just two months out of the year, in November and December, meaning Wabard will not be able to sign any new contracts of this type until 2010. (MTI-Econews)