The Office of Insurance Commission (OIC) has ordered two insurance firms, Southeast Insurance and Thai Insurance, to temporarily suspend the sale of their non-life policies.
Secretary-general Suttipol Taweechaikarn said on Thursday the OIC board had set conditions the two firms must comply with.
The firms had repeatedly said they would comply with Section 57 of the Insurance Act before ceasing operations. They had proposed that customers receive refunds for insurance coverage against Covid-19 infections and cancel insurance policies on a voluntarily basis
However, the two firms had only partially carried out what they proposed. Their plans to transfer insurance policies to other firms were not yet completed. This caused many customers to file complaints with Southeast Insurance and Thai Insurance over payment delays, the OIC secretary-general said.
The OIC had closely monitored the financial status of the two firms and had several meetings with representatives of both companies. The commission found their financial positions were unstable with liabilities in excess of assets.
Allocating reserves under Section 23 and allocating of assets under Section 27/4 failed to meet legal requirements. There were insufficient assets to cover claims.
To prevent damage to customers and the public, the registrar had ordered Southeast Insurance and Thai Insurance to take the following steps:
- Temporarily suspend non-life insurance;
- Take action to ensure adequate finance to meet obligations and a sufficient ratio of capital funding as set by law within 30 days from the date of receiving the order;
- Urgently proceed with the authorized sale of assets under conditions set by the registrar. The firms must use money from the sale of assets to repay insured persons or those who are covered under insurance policies. The firms must keep documents about the payments for authorities to examine;
- Open offices people can contact every day, according to the OIC’s announcement, and arrange sufficient staff to handle claims;
- Accelerate the examination of insurance claims and keep records of the claims in the registration book as soon as possible and within the timeframe;
- Prepare a report on the insurance policies as stated in the conditions;
- Make a record of entries in the registration and account books and maintain insurance reserves according to the law;
- Accelerate insurance payments to injured people or those who have the right under the insurance policies, within the timeframe; and
- Report on the progress of their work until further notice is made.
Southeast Insurance and Thai Insurance are controlled by SET-listed Thai Group Holdings (TGH), the insurance arm of Thai Charoen Corporation Group controlled by tycoon Charoen Sirivadhanabhakdi. In January, both insurance companies sought to cease operations of their non-life divisions, saying they could no longer cover mounting costs related to Covid-19 claims by policyholders.
TGH reported a full-year net loss of 3.26 billion baht in 2021 from a 728 million baht profit a year earlier. Its shares have tumbled about 40% in the past year, wiping out more than US$600 million in market value.
Mr Charoen built a 516-billion-baht fortune mostly from retailing and liquor businesses through Berli Jucker Pcl and Thai Beverage Pcl.
