Covid-19 lump sum policies to cease

Several insurance companies and brokers have stopped selling Covid-19 insurance lump-sum payout policies, while some have adjusted claim benefits to prevent policyholders' moral hazard problem and underwriting risks.

Siam Commercial Bank (SCB), a Covid-19 broker for Deves Insurance, and Bangkok Insurance have ceased sales of lump-sum payment policies, according to the Bangkok Post's survey.

SCB informed customers it had stopped selling the lump-sum policies as its sales volume reached its quota, though another type that covers medical bills is still available.

Anon Vangvasu, executive vice-president of Bangkok Insurance, said his company ceased sales of lump-sum payout policies as sales hit its underwriting capacity. Medical expense coverage remains available as reinsurance companies still accept the risk.

Muang Thai Insurance stopped sales of two types of Covid-19 policies, saying sales value already reached its underwriting capacity for this product.

Suthiphon Thaveechaiyagarn, secretary-general of the Office of the Insurance Commission (OIC), recently said the Thai General Insurance Association (TGIA) had been concerned about policyholders' moral hazard and insurers underestimating risks from the sales of Covid-19 insurance.

The policies could encourage holders with high sums insured to expose themselves to the virus hoping to make claims, but insurers can reject their claims if that is the case, he has warned.

Mr Anon, who is also president of TGIA, said it is the government's policy to let Covid-19 patients with health insurance claim the medical expenses from their insurance policy first, with the state covering the remaining amount.

For those without health insurance but holding a Covid-19 policy, they can claim medical bill payment if infected.

OIC said those who hold multiple policies can make claims from all companies from which they took out lump-sum payment insurance, but they are required to claim based on actual payments from only one company and are eligible to claim the leftover in cases where they bought medical bill coverage from more than one insurer.