March 26, 2020 / 11:46 AM / 3 days ago

Croatia bans insurance companies from paying dividends

ZAGREB, March 26 (Reuters) - Croatia’s financial services regulator has told insurance companies to stop paying dividends as part of efforts to ensure there is enough liquidity in the country’s financial system during the coronavirus crisis and following an earthquake that hit Zagreb a few days ago.

Croatia’s central bank took a similar decision last week affecting local banks which mainly have parent companies from Italy, Austria and Hungary.

“The decision is taken due to the extraordinary market conditions and its purpose is to ensure the stability of the insurance business and overall financial stability,” the state agency for financial services HANFA said in a statement.

It said the decision covered not only 2019 profits but also in some cases would include companies that planned to pay dividends for previous years retroactively.

“The decision will be in force until April 30, 2021, but it could be extended depending on the market situation,” HANFA also said.

There are 13 insurance companies in Croatia, some of which are run by foreign insurance groups like Germany’s Allianz , Italy’s Generali or Austria’s Uniqa .

Croatia has so far reported 481 cases of the coronavirus infection, while 22 people have recovered and one person died.

Last Sunday, a strong earthquake hit the Croatian capital Zagreb which killed one and injured 27 and caused extensive damage to buildings.

Reporting by Igor Ilic. Editing by Jane Merriman

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