These administrative actions were taken as the Hungarian Financial Supervisory Authority found, based on completed proceedings and on latest available data that the capital adequacy indicator of AIM Általános Biztosító Zrt. (the Insurer) dropped to an extreme low level as of 31 December 2012, severely breaching applicable laws.

In the past two and a half years, the HFSA took several measures against the Insurer in an effort to help to settle the institution’s deteriorated financial position and to enable it to function securely on the insurance market.

However, the Insurer’s steps (elaboration of a financial plan, involvement of external capital) triggered by the HFSA measures were insufficient to prevent the continued deterioration of the institution’s financial position. Having assessed the 31 December 2012 data reports submitted by the Insurer, the HFSA found that despite the capital  raise carried out by the insurer   during 2012 and owing to the negative trend outlined above, the Insurer’s solvency capital dropped to a critical all-time low in the last months of the year while its profitability underwent dramatic deterioration.

With a view to available information on the Insurer and in order to safeguard the interests of existing and future insured clients, the HFSA deemed it appropriate to withdraw  the Insurer’s license so as to resolve the critical situation. Therefore, parallel to initiating winding up  proceedings, the HFSA withdrawn  the Insurer’s foundation and operating licences and assigned Hitelintézeti Felszámoló Nonprofit Kft. (Credit Institution Liquidator Non-profit LLC) as the appointed liquidator.  The starting date of winding up  proceedings is 28 January 2013.

The Insurer has approximately 185,000 clients, mostly foreign persons. Its market share in Hungary’s non-life insurance sector equals 1.5%.

By force of law, the related insurance contracts will cease to exist effective 28 January 2013, i.e. the start date of final settlement proceedings; regarding such terminated insurance contracts, only those insurance premiums can be collected that are due until the termination date. After the start date of final settlement as specified above, new contracts cannot be signed and existing contracts cannot be renewed with the Insurer.

The appointed liquidator  shall inform the Insurer’s known creditors and clients based in Hungary and other European Union member states about the termination date of insurance contracts, about the HFSA’s decision outlined above and the legal effects thereof, in particular about the method and deadline for filing claims against the Insurer.

28 January 2013, Budapest

Hungarian Financial Supervisory Authority