The Office of Insurance Commission (OIC) has rejected speculation regarding the alleged closure of a non-life insurance company, saying Asia Insurance 1950 Plc's recent mass layoffs were to cut expenses and reserve its capital for the payment of claims.
The OIC said it was closely monitoring the company and other insurance businesses' operations and will employ all relevant legal measures to protect customers and prevent losses.
The company's announcement of its layoffs sparked rumours of its closure, and speculation on social media that the company may lack the liquidity to continue operating.
After the probe, the OIC's secretary-general Suthiphon Thaveechaiyagarn said the OIC didn't find evidence of transfer of assets or any irregular transactions from the company.
The company has clarified to the OIC that the layoffs were to cut spending and reserve the money for claim payments, and confirmed it is operating as usual. It has also provided staff to accelerate the disbursement, the statement said.
However, to soothe customers' nerves, the OIC has issued three preventive measures to supervise insurance businesses and protect the benefits of policyholders.
The first measure dispatches an inspection team to inspect and follow up on the matter by cooperating with the litigation and benefit protection department.
The OIC said an insurance firm is required to file for approval from the OIC Board under Section 57 of the Insurance Act before terminating its business, and the firm in question has not yet filed any document for the dissolution.
The second measure asks a company's board of directors and executives to clarify their activities and develop appropriate measures to address potential impacts on customers, taking into account the benefits of the insured.
The third measure is establishing legal measures, ranging from light to heavy, to detect and address any potential problems in a systematic and procedural manner. If such problems or irregular activities are detected, the OIC will expedite the implementation of strict legal measures to prevent losses.
The OIC said every insurance firm must ensure they have sufficient liquidity for Covid claim payments as the daily infection rate remains high.
"The OIC office will closely monitor the operations of the insurance company. We will immediately take legal actions if there is a violation of consumer rights," the OIC stated.
"We ask the public not to panic about the situation. The OIC has already issued relief measures to support insurance firms with liquidity problems," Mr Suthiphon said.