Finance Ministry Revokes Licenses of 2 Thai Insurance Companies
The Office of the Insurance Commission (OIC), reports Southeast Insurance and Thai Insurance have both been declared incapable of paying outstanding claims, resulting in the revocation of their business licenses by the Ministry of Finance.
Suttipol Taweechaikarn, secretary-general of the OIC, said that after the closure, the OIC and General Insurance Fund will be responsible for the payment of outstanding claims for the two companies.
He said that both companies were temporarily halted from issuing new policies after the regulator had a discussion with a shareholders’ representative and related groups.
The regulator had been informed that shareholders would not support the two companies financially in any way.
Thailand’s third-richest person, Charoen Sirivadhanabhakdi, owns both companies under Thai Group Holdings (TGH), a diversified business empire controlled by the billionaire. Forbes magazine estimates that Sirivadhanabhakdi has a net worth of US$12.7 billion.
Only Covid insurance policies affected
These companies would not have the capital to pay compensation on time or record claim payments as required by law without supplemental capital injections. According to Mr. Suttipol, this means they are subject to license revocation in order to protect policyholders.
Only Covid insurance policies with lump-sum payments will be affected by a revocation because policyholders of other insurance products have already been transferred to other insurers.
In this regard, the OIC has established advisory centers for receiving complaints and for facilitating debt repayment requests.
As part of its debt repayment program, the OIC will provide support personnel at its headquarters and at its provincial offices, said Mr. Suttipol.
Both companies’ customers can file claims at the commission with documentary evidence. According to the regulator, the OIC will pay for claims by using reserves from the General Insurance Fund after receiving a request.
According to the OIC, the closure of the two insurers will not have a material impact on the overall industry, and the sector is financially stable. Mr. Suttipol said that the OIC has asked the Economic Crime Suppression Division to audit the financial activities of all executives associated with the two companies.
Lump-sum payouts
According to the Bangkok Post, in 2021, Asia Insurance and The One Insurance had to close due to losses resulting from Covid claims, which spiked during the third wave of the pandemic.
As a result of liquidity issues, Southeast Insurance and Thai Insurance filed a request to cancel all of their remaining Covid policies that offered lump-sum payouts.
The OIC rejected the request, stating that arbitrary cancellations of policies are prohibited by law and that the companies must comply with the conditions stated in the policies they offer to the public.
