Representatives of PAID (the Disaster Insurance Pool), which will manage mandatory home insurance, expect around 35-40% homes in Romania to have home insurance by the end of next. The coming into force of the mandatory home insurance law has already been put off several times. PAID could start distribution of policies in late January - early February.

"PAID obtained the authorisation to function from the Insurance Supervisory Commission (CSA) in mid-October and was registered with the Romanian Trade Registry on November 5th. We are required to start operating within 90 days from the date," says Radu Mustatea, vice-president of PAID and president of the managing board of Astra Asigurari. He admits, however, that the risk is there that policy distribution could not start in time, considering that there are several unresolved problems, such as a lack of an IT system able to manage the database of all homes in Romania.

"We may be unable to start operating in time because so far we have only appointed a general manager, rented headquarters and talked among us," says the PAID vicepresident.

According to Mustatea, the issuing of mandatory home insurance could initially focus on social housing and on homes already included in the portfolio of insurance companies, which amount to 35-40% of overall homes in Romania. Astra Asigurari has a portfolio of over 1.1 million home insurance policies that will be renewed through PAID when the system is launched.

The law of mandatory home insurance was approved in Parliament at the end of last year, with a portion of insurance companies choosing not to enter PAID, citing the fact that it does not provide enough protection to insurers, considering the risks they are exposed to.

Mustatea believes several modifications could be made to the law, but says its current form allows for the system to be launched. "Th