Ministry rescinds The One's operating licence

Ministry rescinds The One's operating licence

People gathered in front of The One Insurance Plc in September to push for speedier claims reimbursement for Covid-19 insurance. (Photo: Arnun Chonmahatrakool)
People gathered in front of The One Insurance Plc in September to push for speedier claims reimbursement for Covid-19 insurance. (Photo: Arnun Chonmahatrakool)

The Finance Ministry has revoked the business licence of The One Insurance, formerly known as Assets Insurance, after it failed to raise its capital to solve its liquidity issue and settle Covid-19 insurance claims for lump sum payments.

The withdrawal of the licence was effective as of Monday.

The Thai General Insurance Association (TGIA) called an urgent meeting yesterday to evaluate the liquidity issue affecting the insurance industry as a whole, said TGIA president Anon Vangvasu.

According to the Finance Ministry, The One Insurance's liquid assets now stand at 162 million baht, which is drastically lower than the company's outstanding claims that surged to more than 2.44 billion baht.

Suttipol Taweechaikarn, secretary-general of the Office of the Insurance Commission (OIC), said the company's financial position is unstable, making it unfit to continue conducting business.

The ministry decided to revoke the company's licence and assign the "non-life insurance fund" as a liquidator to take over debt repayment to creditors under insurance contracts.

The One Insurance's policyholders can claim their premiums from the fund or choose a new insurance company to continue their existing policies under new conditions. Policyholders choosing a new firm will receive an additional 10% discount on insurance premiums under the new policy, not exceeding 500 baht, Mr Suttipol said.

He said the shareholders of The One Insurance agreed to not increase its capital to improve its liquidity and financial position, as well as to pay compensation. As a result, the company is unable to maintain its capital fund as required by the OIC.

The regulator has taken measures to ensure there will be no transfer of assets or any actions that may cause damage to the insured or members of the public during the policy transition, said Mr Suttipol.

The OIC prepared service points nationwide to facilitate debt settlement applications and debt repayment requests. It also allocated additional support personnel to receive debt repayment applications, he said.

The One Insurance is the second insurance company forced to shut down this year because of a liquidity crunch triggered by a surge in claims for Covid insurance.

After the company's accumulated value of claims from Covid insurance surged, in line with a spike in infections during the second and third quarters, The One's shareholders signalled an intent to solve the liquidity problems. The company then arbitrarily announced its temporary closure without notifying the OIC, causing the public to panic.

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